Martin Ferris (Kerry North-West Limerick, Sinn Fein)
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To ask the Minister for Public Expenditure and Reform the percentage of construction related public procurement projects of €100,000 and over that were awarded to Irish companies, including those in the six counties, in 2011 and 2012 respectively. [3074/13]

Sandra McLellan (Cork East, Sinn Fein)
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To ask the Minister for Public Expenditure and Reform if he will provide in tabular form a breakdown of construction related public procurement projects awarded in 2012; the value of each project, and if the project was awarded to an Irish company including the six counties. [3073/13]

Brian Hayes (Dublin South West, Fine Gael)
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I propose to take Questions Nos. 7 and 41 together.

The National Procurement Service, NPS, is responsible for the collection of the annual procurement statistics for all supplies, services and works contract notices that are advertised on e-tenders, which are above the EU threshold levels within any given year. It should be noted that below threshold statistics are not collected.

While the NPS collects data on services contracts above the EU threshold levels, it does not specifically collect information relating to construction service contracts as it would be difficult to differentiate construction service specific contracts from general service contracts based on the criteria used in the data collection process. Accordingly, only works contracts are available on construction-related public procurement projects. The statistics for 2012 are not available for review at this point as the NPS has only just started the process of gathering the data and it will take several months to complete.

The breakdown for the 2011 statistics for above EU threshold works contracts is set out in the following table. Each year, the NPS issues a notice to all contracting authorities that publish a notice on e-tenders, requesting them to complete an appropriate form outlining their procurement figures via an online database. It should be noted that the following figures are based on a 75% return rate from all contracting authorities which were issued this notice requesting their figures for 2011. The contracts that are quoted as being “unawarded at time of collection” relate to contracts that were advertised during 2011 but by the end of the year had not been awarded. In those instances, a maximum estimated contract value was requested from the relevant contracting authority for inclusion in the statistics.

Central Government

Local and Regional Authorities/Others

*One Northern Irish supplier included in this total. The value of this contract was €5,677,000.

**One contract with a value of €296,000 was awarded to a supplier listed as being from the UK.

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In terms of central government, the total number of contracts was nine above the EU threshold level of more than €138 million. Two were awarded to Irish suppliers, the other seven were unawarded at the end of the data collection period. In terms of local and regional authorities, of the 71 contracts, 39 were awarded to Irish suppliers and 31 were unawarded because the contract was not placed, and only one non-Irish supplier won a contract. One of the 71 is the brief, succinct answer to the question.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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Sometimes one is better off to see the replies when they are in tabular form but I got the gist of what the Minister of State had to say.

Brian Hayes (Dublin South West, Fine Gael)
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I apologise for the verbose reply.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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Yes, indeed. The purpose of the question is to explore the issue. I appreciate the necessity on the one hand for the kinds of cost savings the Minister of State envisages through procurement. That is reasonable and fair. We cannot allow a situation to continue, whereby, as the Minister of State put it, people were “screwing the State”.

An additional concern was raised by Deputy Pringle in his earlier question about a situation whereby the State is contracting for services and spending substantial amounts of money, and it is in our interests that Irish firms can compete and win those tenders. With that in mind, is the Minister of State considering any modifications or innovations to how procurement processes operate that would build on the potential for Irish firms? I presume that is something that is under constant review. I am interested in hearing what specifically the Minister of State is thinking.

It is a pity that it was not possible to disaggregate or give specific data for the construction sector, not least because we know that much of the catastrophe in terms of job losses, in particular for men, were in the sector. Any monitoring or additional data that would help to give a boost on a sustainable and competitive basis to the sector would be welcome.

In a later question which I do not expect the Minister of State will reach, I asked about a social clause for public contracts - in other words, that provision would be made within the procurement process to address youth unemployment and long-term unemployment. As the Minister of State is aware, the EU procurement regime and legislation is tight and prescriptive but there is scope within it for contracts to specify terms and conditions relating to such social issues. It is time we took such steps. The Minister of State might be aware that my ministerial colleague in the North, Conor Murphy, pursued that and it proved successful.

Brian Hayes (Dublin South West, Fine Gael)
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Deputy McDonald made a number of valuable points. On the latter issue of social contracts, I can confirm to the House that I will bring proposals to Government shortly effectively to demand that a percentage of people who will work on public construction contracts will be ones who have suffered unemployment as a result of the downturn in the construction industry. We have done much work in that regard in recent months. Much of it has been helped by what has happened in other EU countries, in particular where there has been a significant increase in unemployment and states have examined how, through the expenditure of public money or through PPPs, they could ensure that social contracts are part and parcel of the system. It is not part of tendering, as such; it is more to do with the State requiring that a certain percentage of people on construction contracts would come from the live register. I can confirm to the Deputy that we are doing that and we will make an announcement on the issue in due course. It was a perceptive question on the Deputy’s part.

The biggest thing that will help us to change is data. To put it bluntly, we do not know who is buying what, and there is little accountability on spending in this country. The new e-tenders website that we have put in place gives us the technological opportunity to capture the data and discover what bodies are spending what amounts. It is important to analyse the data to ensure there is proper value.

The good news is that 95% of the value of what we spend, even if some contracts are won outside the State, remains in the country. We want to see Irish businesses not just win contracts in this country, but in other countries. I understand that across the EU the market is valued at €2.5 trillion and we want to see our companies getting a larger percentage of that. It is not just about what contracts Irish companies can win at home, but what they can win abroad.

We are actively encouraging SMEs to pitch together for business. We are improving data collection through e-tenders. By the end of the first quarter of this year we will bring a new policy on procurement to the Cabinet with the imprimatur of the new chief procurement officer. It is about getting a much more exacting standard at a technological and management level as to who is spending what to make sure that what we are spending, which is €9 billion on goods and services – approximately €4 billion on construction – is spent by and large at home.

The situation is governed by EU tendering law. Currently, there is what I might call a legal cottage industry challenging every single decision the Government takes. We must professionalise the standard of procurement and get the standard the NPS has applying across the country. Otherwise, such is the level of litigation in the area, people will be taken to court.

Patrick O'Donovan (Limerick, Fine Gael)
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I agree with much of what the previous speaker said about the construction element of procurement contracts. There is a problem with the tendering process in terms of the construction sector.

All public representatives are aware that tenders of excessively low levels are being submitted to the county council, the Department of Education and Skills or to the Department of the Environment, Community and Local Government, perhaps for a water main or the like. This is a huge problem for subcontractors. The tenders are excessively low, without any regard to quantity surveyors or what is realistically deliverable in the market. Lo and behold, half way through the contract the contractor goes belly up, leaving the local subcontractors in the lurch. Then another contract might be awarded by another local authority to the same building outfit. That local authority cannot carry out a proper background check and use the contractor's experience, be it in Limerick, Carlow or with the Department of Education and Skills, to decide that he is a cowboy, having burned subcontractors previously, and exclude him from the process.

This is happening everywhere. It happened with a school in my constituency before Christmas. It transpires that the situation is not unique to Limerick. In fact, in the case of a school in Dublin, at the same time the person was walking away from their responsibilities he got a contract to refurbish houses in a local authority in Munster. This must stop. We must give some type of comfort to subcontractors who are taking on this risk at present. I realise the Construction Contracts Bill is due to come back to the Dáil, but it does not go far enough in terms of establishing a certification process whereby if Patrick O'Donovan or Brian Hayes are subcontractors to whoever, they must be paid in full before the next contract is awarded or before the last tranche of funding is drawn down. It is a huge a problem. These are small businesses and, to borrow a phrase from the previous speaker, they are being screwed wholesale by contractors who have no regard for them, their families or their employees, who must also put bread on the table.

Brian Hayes (Dublin South West, Fine Gael)
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I thank the Deputy for his intervention. The House has been very patient about the Construction Contracts Bill and Opposition Deputies, in particular, have been very patient with me with regard to not bringing the Bill to Committee Stage. It is my intention to do so in a matter of weeks. I apologise for not being more speedy on this. However, even if that Bill had been passed by this House and the Seanad, it would not have dealt with the case to which the Deputy refers. I am aware of the school in Limerick because it was the subject of an Adjournment debate in the Seanad.

We will look at this closely. The pricing of construction contracts is very competitive at present. It is down by over a third from prices at the height of the boom. At one level, that is a great opportunity for the State. We are getting a great deal of value in our construction and a bang for our buck in our spending. However, there is a great deal of cutting back on the ground in order to win those contracts. In addition, the construction industry has changed dramatically in recent years. Much of the work is done by subcontractors and, as the Deputy said, people can be stung in that process. I hope the Bill, which will go to Committee Stage shortly, will deal with some of those issues. Certainly, I believe we have managed in the amendments to deal with the issues raised by the opposition spokespeople. Those issues were the subject of representations that many subcontractors made to the Deputies concerned.

There would be much legal doubt and uncertainty as to whether the State can be involved in effectively blacklisting groups or individuals. There would be huge difficulties constitutionally. Nevertheless, we might look at it again on Committee Stage and seek the Deputy's intervention then.