Enda Kenny (Mayo, Fine Gael)
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Question 1: To ask the Taoiseach if there is a corporate procurement plan in place in his Department; and if he will make a statement on the matter. [3563/08]

Eamon Gilmore (Dún Laoghaire, Labour)
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Question 2: To ask the Taoiseach the corporate procurement procedures operating within his Department; and if he will make a statement on the matter. [4660/08]

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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Question 3: To ask the Taoiseach the procedures for corporate procurement in his Department; and if he will make a statement on the matter. [15226/08]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I propose to take Questions Nos. 1 to 3, inclusive, together.

There is a corporate procurement plan in place in my Department. This plan was put in place to implement the requirements of the national procurement policy framework and it reflects my Department's commitment to effective and efficient resource allocation and service provision as prescribed by the Public Service Management Act 1997 and the Comptroller and Auditor General (Amendment) Act 1993.

Procurement of goods and services by my Department is carried out under procedures set out in Department of Finance public procurement guidelines and EU procurement rules. These procedures are designed to ensure that competitive processes are in place to select the providers of goods and services which represent best value to the Department, taking account of a number of important criteria including cost and suitability for purpose.

Procedures in place, which may vary according to the nature and amount of the procurement involved, include the appropriate use of processes to specify requirements; select an appropriate competitive process whether by seeking quotations, advertising, use of central purchasing facilities and centrally negotiated framework agreements or more formal tender processes; evaluation of alternatives according to pre-set criteria; agreement of contracts; and monitoring of service delivery.

Enda Kenny (Mayo, Fine Gael)
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Am I wrong in assuming that most Departments and State agencies seem to have been entirely independent operations in the way they purchase goods and materials to service the Departments? The Taoiseach has been in the Department of Finance for a number of years and he knows the bills that crossed his table. Would it be a good idea to have a single public buying office, under the Department of Finance, which would attract larger tenders and, therefore attract economies of scale across a vast range of materials, goods and services to be provided? For example, IT services could then be contracted out to other Departments and State agencies rather than the State entering into the famous PPARS business with the health boards where entirely separate operations took place. Surely collaborative purchasing arrangements in the interests of the taxpayer would attract very large tenders, economies of scale and greater accountability and transparency in the purchase of materials and goods and give a better return all round. Is there merit in having a single State purchasing body, operated under the Department of Finance, for all Departments — which, as the Taoiseach said, would cut out the series of independent republics which do their own thing, buy their own wares, make their own tenders, advertise their wares and so on — which should be in the interests of the taxpayer?

Brian Cowen (Laois-Offaly, Fianna Fail)
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This is an area I will have a look at in the context of the reform of public services. It is important that procurement plans or procurement policy are not structured in such a way as to cause delay by requiring people away from the organisation to do the procuring when those in front line management positions are in a position to identify prospective suppliers. They would have built up a relationship with them because of the work they do and the type of engagement in which they are involved and would be quoted tenders far quicker than going through a centralised system. Deputy Kenny made the point that related activities, whether at local government level or elsewhere, could be grouped to allow greater streamlining of the requirements of various individual councils for certain materials, in terms of road making and so on and that be tendered for in group manner. In an effort to get better value for money it seems to me that has merit and it should be part of the agenda of reform that we are talking about undertaking as soon as the task force reports in the summer.

Enda Kenny (Mayo, Fine Gael)
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I thank the Taoiseach for that reply. I know from his previous experience that he sees the proposal has merit. It can be complex enough to put it into operation. Collaborative purchase agreements, known as electronic reverse auctions, are available through a central database and a network of procurement officers having specialist training for procurement officers. For example, many Departments buy in legal services and tender for these. A network of panels of legal firms which have an expertise in particular areas of legal requirements would be helpful. I thank the Taoiseach for his reply in that regard. I hope he will follow it through and push this to become a reality. Hundreds of millions of euro could be saved over a period by a single public purchasing office, operated through the Department of Finance, and answerable to the Minister of State at the Department of the Taoiseach. It would streamline the process, provide greater efficiency, cost effectiveness, transparency and accountability and, as a result, would be in the public interest.

Brian Cowen (Laois-Offaly, Fianna Fail)
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As I indicated, effective and efficient procurement policy procedures and practices can have a significant impact on the accountability and value for money aspects of the purchase of goods and services by the State. The potential for real savings from more effective procurement policies is significant. Achieving savings is important as it frees up resources which can be redirected to the provision of services within organisations. Developments internationally suggest better outcomes may be possible by moving beyond pure compliance with existing rules towards improved procurement policies and practices. While some efforts have been made in this direction, scope for further development exists.

The main aim is to achieve value for money, while having regard to probity and accountability. While price is very important in determining value for money outcomes in procurement and for certain categories of purchases, in particular, it is not the only variable that needs to be considered. Value for money also encompasses non-cost factors. When making purchases of goods or services, consideration must be given to whether they are fit for the purpose for which they are intended, the goods or services are of sufficient quality and the level of service or support provided meets requirements. I accept this is an area for further consideration.

Eamon Gilmore (Dún Laoghaire, Labour)
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I have one question on procurement by way of public private partnership. Is the use of such partnerships being reconsidered, particularly given the comments of the Comptroller and Auditor General in drawing attention to the fact that the rates of interest being applied for PPPs are in excess of what the Government would normally pay? In circumstances in which interest rates are increasing, will the use of public private partnerships and their value for money be reconsidered?

Brian Cowen (Laois-Offaly, Fianna Fail)
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No. The use of public private partnerships is appropriate in certain but not all circumstances. PPPs are also a good vehicle by which we can encourage private sector investment to work with public sector investment to provide much needed infrastructure. Within the system of evaluation of public private partnerships, the use of a public sector benchmark ensures an assessment of the options is made on a value for money basis. In some cases, a PPP is not appropriate and in some cases it is appropriate.

With the increase in directly funded capital programmes, one cannot assume, in the overall budgetary context, that further publicly provided moneys will be available to the same extent as they are currently available through the PPP process. Private sector input provides a greater capacity to move a number of projects forward. PPPs are working exceptionally well in the roads area, for example, in terms of hard infrastructure. As is clear from the budget figures, in overall terms the vast majority of investment is made exclusively through public Exchequer funding. Various evaluations have been made and lessons can be learned but public private partnerships are a necessary part of the overall approach. To return to Leaders' Questions, there is no single exclusive way of doing things. A number of approaches need to be applied to try to deliver the outcomes we seek.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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Given the downturn in the economy, particularly its impact on manufacturing jobs, is there scope in Departments for procurement to take place with a particular focus on Irish manufactured goods and Irish provided services? Have European Union regulations closed off the potential to adopt or employ imaginative approaches to procurement by Departments and local authorities or is a protocol in place in Departments which gears consideration in the first instance to the Irish manufacturing sector? I do not have to emphasise the importance of this sector at this time with so many jobs being lost at various locations throughout the State. Is there a policy framework in place or under consideration which can help in that regard, given that the State is a significant spender on behalf of the citizenry, controls the Exchequer purse and can make a significant impact on the sale of indigenous goods and services provided by Irish workers or workers employed here?

In that respect, have measures been considered in the area of tendering which would take on board Irish best practice in terms of labour laws and health and safety considerations? In terms of specific procurement projects, is the Taoiseach aware, from his former portfolio as Minister for Finance, of whether Departments have considered applying to the provision of goods and services the very highest standards of labour law and health and safety considerations?

It has been a matter of considerable concern to me that large sectors — I am not sure if I said something humorous——

Brian Cowen (Laois-Offaly, Fianna Fail)
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We are allowed to smile in the House.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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It is good to see we can elicit the odd smile. It has been suggested time and again in the health sector that meat products procured for use in hospital and other health settings are not of Irish or EU origin or meet the necessary stringent traceability requirements. This practice is reflected in other sectors, not least in catering. The Taoiseach must also be aware of such concerns and while I cannot evidence the practice to him, there is great concern. This is the reason I raise, in particular, the whole issue of labour law and health and safety standards and wonder what approach the Government can adopt on the back of these to help the further development of accessing goods and services here.

Brian Cowen (Laois-Offaly, Fianna Fail)
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I do not believe it is possible to restrict access to the competitive tendering systems in place based on the location of a business. At a certain level of procurement expenditure, one is required to place a notice in the Official Journal of the European Communities and bring the tender to the attention of all competitors within the European wide system. This is good because it ensures our suppliers are competitive and recognise in which areas they have to compete with companies from other parts of Europe. The bottom line is that the Government must secure best value from taxpayers' money.

It would be great if every tender issued was taken up on a competitive basis by an Irish firm. I have received representations from people who have examined the procurement of a service provided to the health sector by a non-Irish entity and found it was not as good as the service provided by previous suppliers for many years in terms of having people on site and providing after-sales services and maintenance contracts. A wider perspective was taken when the contract came up again.

As I indicated, it is not simply a matter of accepting the cheapest tender as wider issues must be taken into account. Sometimes people learn the hard way, through experience, that the lowest tender does not necessarily deliver the best outcome. I have seen this in the provision of sanitary services in my home area where the lowest tender secured the contract but the delivery of the contract was full of problems and caused great inconvenience for a long time. It may well have cost the local authority more than if it had gone elsewhere, which can happen.

The main thrust of the Deputy's question was whether there was any way one could limit tenders to Irish manufacturers. It depends on the size of the contract and whether one would have to notify people outside the country. That is the criterion. The size of the contract determines what clicks into the EU Journal advertisement requirement under EU competition law.

As I said, it requires people who study these tenders and make decisions on them to recognise that there are sometimes after-sales issues and after-tender maintenance requirements that need to be factored in. I am always of the view that if there is very little in the difference, one should give it to an Irish firm, although that must be legal and appropriate. I am sure such judgments are made by people at various times.

I am not aware that any problem exists in the food and catering area in terms of the meat being used, whether in the health sector or elsewhere. I have not come across people who have indicated that there is a problem there. Beef from outside the EU is eaten in this country. Local farmers and organisations have a view about that but it is part of the ebb and flow of trade and trade agreements. As happened in the past, basic standards were not met and a temporary ban was brought to bear. These issues are monitored all the time.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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I thank the Taoiseach for his reply and for indicating a willingness to look at what can be done to secure best outcomes from an Irish perspective. Will he look at Irish labour law issues in regard to the procurement of materials and services and at health and safety issues? To be more specific, there are instances of substantial concern in regard to the procurement of produce by a number of State agencies, including the HSE and our hospitals network. There is a question mark over poultry. In many cases, restaurants can tell one the farm on which poultry is produced but I warrant that is not the case with our health service and this creates great concern. There are also real concerns in the catering sector.

I do not expect we will get the answers to everything here but will the Taoiseach indicate a willingness to explore these matters because it is about more than securing greater opportunity for Irish suppliers? There is a concern in terms of labour law and health and safety among people of disparate opinion with whom I have discussed these matters.

Brian Cowen (Laois-Offaly, Fianna Fail)
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In fairness to public service procurers, people want to deal with reputable organisations and firms based on the quality of their product and the fact that they can provide it at short notice and the way those seeking the product want it. I do not believe one can place conditions in terms of what trade union is represented and so on. One is dealing with the procurement of a product which must be safe, competitively priced and meet requirements. If people meet those conditions, they are entitled to tender.

People in other capacities have responsibilities to ensure matters are properly handled in terms of our employment law and so on. If one brought that into the procurement process, one would complicate it which could cause delay and additional cost by the time one sorted it out. There is a need to avoid bringing in responsibilities other than those about which we are talking, that is, getting value for money for products which are safe for people to use or for whatever purpose they are sought. There is the wider supervisory role of the Department of Enterprise, Trade and Employment in regard to labour law matters. The labour inspectorate deals with that issue and it should not be brought into the tendering process.