Dáil debates

Tuesday, 26 September 2017

Other Questions

Public Procurement Contracts

5:55 pm

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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41. To ask the Minister for Public Expenditure and Reform his plans for new legislation to ensure proper wages and conditions for workers and full tax compliance, with particular emphasis on bogus self-employment, in all public contracts; and if he will make a statement on the matter. [40479/17]

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I ask the Minister to answer the question both in respect of individual instances and the general principle. Should companies that get public contracts, that are then found to be in breach of the law and of fire safety standards and that fail to comply with the tax code be banned for ever from being awarded public contracts? I will go into a little more detail. Before the summer recess, I raised the issue of the refurbishment of Dolphin House and the failure in that instance to comply with the tax code. I have just left the meeting of the Joint Committee on Education and Skills at which Western Building Systems-----

Photo of Eugene MurphyEugene Murphy (Roscommon-Galway, Fianna Fail)
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The Deputy had 30 seconds to put his question.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Okay. I will return to the issue of Western Building Systems.

Photo of Patrick O'DonovanPatrick O'Donovan (Limerick County, Fine Gael)
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Deputy Boyd Barrett's question is whether the Minister has plans for new legislation in this area. There are no plans for legislation covering procurement, but I can give a more comprehensive answer when the Deputy asks his more comprehensive question.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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On 5 July last, I pointed out in the House that workers had been working on a public contract for Purcell Construction, which is the developer, and Rapid Developments, the subcontractor. The workers were employed since April or May and still had not received payslips. Even after I raised the matter with the Minister, which was followed by a raid by the joint investigation unit, JIU - although that raid was a joke - the workers still have not received payslips. In August, they finally got a notification that they were PAYE workers as of 23 August, but there was no reference to the fact that there was no tax, registration or anything else since their employment began in April or May. This is a flagrant breach of the law, and this is a public contract.

I have just returned from the meeting of the Joint Committee on Education and Skills at which Western Building Systems, which built six schools in flagrant breach of fire safety standards, was discussed. Another one that has not come into the public domain is Whitehall College of Further Education, also built during that period, in respect of which, I understand, legal action is being taken by the Office of Public Works over the company's failure to comply with proper standards. Are these companies seriously going to continue to be awarded public contracts? It is outrageous. In the case of the schools, children are being put at risk. The company signed off, fraudulently in my opinion, on fire safety in those buildings, which were then discovered to be defective on multiple occasions. Will those companies be get further public contracts? I do not believe they should.

Photo of Patrick O'DonovanPatrick O'Donovan (Limerick County, Fine Gael)
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I will try to answer the question - as it relates to the Department - which is in respect of procurement. I should explain that public procurement already includes provisions for the protection of labour rights.  Public procurement is the acquisition, whether under formal contract or not, of works, supplies and services by public bodies.  National rules governing public procurement must comply with the relevant EU and national legal requirements and obligations.  Under EU law, public contracts above a certain value must be advertised EU-wide and awarded to the most competitive tender in an open and objective process. The aim of European and national rules is to promote an open, competitive and non-discriminatory public procurement regime which delivers best value for money.

Public procurement procedures require applicants to meet certain standards when applying for public contracts.  In this regard, applicants are required to make declarations relating to their financial standing, legal standing and the payment of taxes and social contributions.  They must also be compliant with relevant labour law.

Prior to the award of a public works contract, the successful applicant is required to produce a current tax clearance certificate from the Revenue Commissioners.

The management of the tendering process for a public contract is a matter for each contracting authority.  It is the responsibility of each authority to ensure that tenderers comply with all the requirements of the process.

Once awarded, the conditions of the public works contracts require the contractor to certify compliance with employment law, to maintain records of all those employed on the site, regardless of whether they are employees of the contractor or subcontractors, and the hours worked by them.  Where requested, the contractor must also provide details of the payments made to those employed on the site.

Where the contractor fails to comply with their obligations under the contract or employment law, deductions may be made.

Enforcement of tax, social welfare and employment law are matters for the relevant State authorities, including the Workplace Relations Commission, the Department of Employment Affairs and Social Protection and the Revenue Commissioners.

With regard to the construction area specifically, I understand the matter Deputy Boyd Barrett raises, or it might be a related matter, is under consideration by our colleague, the Minister of State, Deputy Breen. I will bring the Deputy's question to his attention.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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That was a scripted answer telling us what we already know. I have given two examples of companies that received significant public contracts worth a great deal of money. There is proof in the case of Western Building Systems and strong evidence in the case of Purcell Construction and Rapid Developments, in the Dolphin's Barn development, that they are breaking the law. In the refurbishment at Dolphin's Barn they are breaking the law in terms of the tax code and conditions of employment for workers. It is still happening, even after a raid took place. The workers still have not received payslips and the employer is now trying to tell them that they were only employed on 23 August even though the workers can show pictures of cheques they received from this company back in May. This is breaking the law. When companies are found guilty of that will they continue to get public contracts or will the contracts be taken from them? Western Building Systems built schools and is building rapid-build houses in Poppintree - God knows what they are like in terms of fire safety. It was involved in construction at Temple Street hospital, as well as building extensions to Beaumont Hospital. The company has built all of these things and we have known for at least two years that it was in flagrant breach of fire safety standards. Will it get more public contracts?

Photo of Patrick O'DonovanPatrick O'Donovan (Limerick County, Fine Gael)
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The question Deputy Boyd Barrett is asking now is completely different-----

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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It is not.

Photo of Eugene MurphyEugene Murphy (Roscommon-Galway, Fianna Fail)
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The Minister without interruption.

Photo of Patrick O'DonovanPatrick O'Donovan (Limerick County, Fine Gael)
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The question asks the Minister for Public Expenditure and Reform his plans for new legislation. Deputy Boyd Barrett has raised a serious-----

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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The Minister of State did not quote all of the question.

Photo of Patrick O'DonovanPatrick O'Donovan (Limerick County, Fine Gael)
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It continues, "proper wages and conditions for workers and full tax compliance, with particular emphasis on bogus self-employment, in all public contracts; and if he will make a statement on the matter". No details were supplied and there were no details relating to the contracts the Deputy mentioned. The Deputy has raised specific issues on the record of the House. The Department of Employment Affairs and Social Protection can be notified of the situations the Deputy has identified. The Deputy asked me the question on the Order Paper today and I have answered it. I also answered it on the basis of legislation-----

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I am asking if there will be sanctions against companies that are not in compliance.

Photo of Patrick O'DonovanPatrick O'Donovan (Limerick County, Fine Gael)
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Perhaps the Deputy will let me finish. The Deputy is also asking the question, I presume, in the context of legislation that he and his colleagues have proposed. The Department has serious concerns about the legality of that legislation and that has also been communicated by the Attorney General. I do not disregard the severity of what the Deputy suggested. I have no proof of it. This is not a court of law and it is not a place where we can pass judgment on people or their reputations. The specific cases to which the Deputy refers should be brought to the attention of the relevant State authority, in this case the Department of Employment Affairs and Social Protection.