Dáil debates

Tuesday, 17 February 2004

Other Questions.

Departmental Investigations.

4:00 pm

Photo of Ruairi QuinnRuairi Quinn (Dublin South East, Labour)
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Question 102: To ask the Minister for Finance the investigation which has been held into the circumstances in which contracts worth over €800,000 were awarded by the Office of Public Works to a company (details supplied) whose managing director was a business associate of an OPW official; and if he will make a statement on the matter. [4764/04]

Tom Parlon (Laois-Offaly, Progressive Democrats)
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The matter to which the Deputy refers is currently being examined independently on behalf of the Office of Public Works. The purpose of the examination is to establish, in so far as possible, the facts in the matter. I expect the results of the examination to be available shortly.

It is not possible at this stage nor would it be correct for me to comment on the specifics of the situation pending the completion of the examination. However, I wish to clarify one point. The figure of €800,000 refers to the total value of payments to the company in question over a nine year period from 1995 to date. During this period the OPW kept under regular review the prices being charged in the market for the services in question and was satisfied that it was availing of the most cost-effective service.

It is obviously a matter of concern that any suggestion of impropriety should attach to the award of public contracts by the OPW or by any Department or agency. The OPW, through the activities of its various business units, including the Government Supplies Agency, plays a significant role in the procurement of property, construction and other goods and services on behalf of Departments and agencies. Due to the central role it plays in the procurement area, the OPW has consistently strived to ensure that it conforms to the highest possible standards of fairness, transparency, integrity and value in awarding public contracts. I believe it achieves this objective across the broad range of its services.

It is the general policy of the OPW that all procurement activity in the organisation abides by the principles and rules set out in the national public procurement guidelines issued by the Department of Finance and in the EU public procurement directives. In essence, this means that contracts for the supply of goods and services should be awarded by way of competitive tender where practicable. There is also an obligation on all personnel involved in the tendering process to ensure that any potential conflict of interest in that process is disclosed in good time.

When the results of the independent examination become available, I will consider them carefully and take whatever steps I consider appropriate in the circumstances. My sole objective will be to ensure that the integrity of the procurement process in the OPW is maintained to its current high standards and strengthened where necessary.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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Who is carrying out this independent investigation, examination or inquiry? The Minister spoke of an independent examination. What are its terms of reference and will the Minister put them in the public domain? The Minister must be aware that the award of contracts with regard to certain elements of audio visual supplies in the OPW, amounting to more than €800,000, has been the cause of serious public disquiet. Is any member of the staff of the OPW subject to the terms of this inquiry, given that a member of the OPW staff is reported to have or to have had a business relationship with the managing director of a company which received contracts worth more than €800,000 in total between 1997 and 2003?

Tom Parlon (Laois-Offaly, Progressive Democrats)
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The company carrying out the independent investigation is a well-known management consultancy auditor — PricewaterhouseCoopers — and I expect it will bring forward the report within weeks. In this instance we are talking about the provision of audio technical services in Dublin Castle which is one of our foremost high quality conference centres and is used intensively by both Government and outside agencies. In this situation the services of these audio technicians might be required on up to ten occasions per week and therefore the situation would not require the issuing of a formal tender on every occasion. It has been the case that these services are generally provided on an hourly rate. In this case a number of firms are involved and the overall spend is spread over these. The conditions are reviewed on a regular basis and we deem the prices that we pay to this firm and the others to be reasonable and above question.

On the matter of the named individual, that official is not currently involved in the procurement of services from the company concerned. Steps are being taken to ensure that the supply of all goods and services will be subject to a formal, fair and transparent competitive tendering process.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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I am happy to hear that. Will the Minister of State answer my question about the terms of reference of this examination or inquiry? Is he saying that this official has been moved aside while the inquiries are under way? I draw the Minister of State's attention to the fact that there is serious concern, particularly among the businesses to which the Minister of State refers, that a number of contracts are not advertised in the official journal of the EU. Under EU public procurement rules if a contract is in excess of €162,000, it must be advertised in the official journal of the European Commission. However, the value of many contracts start off at approximately €21,000 and climb to way over the tender limit. How does the Minister of State propose to address these matters? Is the Minister aware of the serious disquiet among other tenderers for Government business about how the OPW has done its business in this respect?

Tom Parlon (Laois-Offaly, Progressive Democrats)
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Pending the outcome of the independent investigation, the people involved are entitled to natural justice and due process.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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Will the Minister of State give us the terms of reference?

Tom Parlon (Laois-Offaly, Progressive Democrats)
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I will. They are lengthy and, obviously, all the issues will be investigated. First, on the matter of tenders and limits, I accept there is an issue of whether something is a structure. In this case the issue was the provision of tents and marquees to provide emergency accommodation for the press attending and the definition of a new sprung structure, with which I was not familiar, which would be regarded as a building and what is in effect a marquee. Any of us who have been inside some of these expensive marquees lately would find it hard to tell whether they were a structure.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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I thought only Fianna Fáil Deputies got invited into tents.

Tom Parlon (Laois-Offaly, Progressive Democrats)
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I have been in several which were provided by the Government for the media etc.

Photo of Richard BrutonRichard Bruton (Dublin North Central, Fine Gael)
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They are part of Parlon country.

Séamus Pattison (Carlow-Kilkenny, Labour)
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Order, please.

Tom Parlon (Laois-Offaly, Progressive Democrats)
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If the Deputy is interested in an explanation, I will strive to give one. Perhaps in this case a false assessment was made as to what was a works tender, which would allow a €5 million ceiling, and what was a services tender, which would allow a ceiling of €154,000. Obviously, the report will come forward with some explanation of that issue.

The terms of reference are to assess the procedures applied to the procurement of audio-visual services from this particular company; to assess the procedures applied to the procurement of audio-visual and translation equipment and services for the 2004 EU Presidency; to assess the risks associated with the procurement of other goods and services within Dublin Castle and to evaluate the underlying procedures and controls; to make recommendations on improvements to procedures for the procurement in Dublin Castle to ensure they are conducted in a fully transparent and fair manner and that adequate procedures and controls are in place to safeguard the integrity of the procurement process; to document the outside business interests and relationships, including directorships, of the individual and to consider the extent to which these may have represented a conflict of interest with regard to procurement of audio-visual services having regard to national and EU procurement regulations. The terms are definitive. I await the outcome of the report.