Thursday, 23 September 2021
Ceisteanna - Questions - Ceisteanna ar Sonraíodh Uain Dóibh - Priority Questions
Public Procurement Contracts
3. To ask the Minister for Public Expenditure and Reform the remit of the new interim procurement reform board; the terms of reference of the board; if a list of board members will be provided; the stakeholders that will be consulted; the proposed date for the board to publish its findings; and if he will make a statement on the matter. [45429/21]
There has been concern, much of which has been reported in the media, in relation to public money that was spent on faulty equipment, for example, PPE, arising clearly from failures in due diligence. The Minister of State has announced the formation of a new interim public procurement reform board. Will he outline the terms of reference of the board, provide a list of its members and the stakeholders that will be consulted and indicate the proposed date for the board to publish its findings?
I will address the Deputy's written question. I am happy to come back to the questions about ventilators in the HSE in my second response.
The interim procurement reform board was appointed by the Minister for Public Expenditure and Reform in May 2017 to oversee delivery of the procurement reform programme, advise the Government on a national public procurement strategy and advise on the Office of Government Procurement's objectives and business plans. The board meets quarterly and publishes an annual report to the Minister. The most recent report for 2020, published in August, is available on the Office of Government Procurement, OGP, website. Its terms of reference include overseeing the implementation of the public procurement reform programme; advising the Government on a national public procurement strategy; advising on the OGP objectives and business plan and overseeing its delivery and performance; advising on the sector sourcing partner organisations' objectives and activities; providing leadership to the procurement executive in relation to its roles and functions and agreeing methods of working and reporting by the executive to the board; representing customer departments and offices and providing leadership and sponsorship for the procurement reform programme across the public service; advising on the development and implementation of strategies to communicate the work of the OGP across the public sector, including any policy and training implications for the wider public sector; and overseeing the development and monitoring of service level agreements between the OGP and Departments as well as bodies under their aegis, including bodies responsible for leading centralised or sectoral procurement programmes.
The membership of the board consists of 11 members. Three are independent members recruited from outside the public sector and eight are senior public servants. The members are the independent chair, Mr. Maurice Quinn; Ms Katherine Licken, Secretary General at the Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media; Mr. Paul Quinn, chief procurement officer and CEO of the OGP; Mr. Greg Dempsey, assistant Secretary General at the Department of Health; Mr. John Swords, national director health business systems in the HSE; Mr. Eamonn Hunt, assistant CEO of the Local Government Management Agency; Mr. Declan Hughes, assistant secretary general at the Department of Enterprise, Trade and Employment; Mr. Ronnie Downes, assistant secretary general at the Department of Public Expenditure and Reform; Mr. Dónall Curtin, independent member; Ms Brid O'Donovan, independent member; and Ms Deirdre McDonnell, assistant secretary general at the Department of Education.
According to the Comptroller and Auditor General, more than one third of our spend on PPE had to be written off. That spend amounted to over €900 million. Much of that PPE was thrown in the bin. For example, hand sanitisers had to be recalled after millions of euro was spent on them.
After spending millions on hand sanitiser, the HSE purchased now infamous ViraPro hand sanitiser in March 2020. It received a shipment in July 2020. A month later, the HSE learned that hand sanitiser had to be registered with the Department of Agriculture, Food and the Marine to ensure its safety, but it was not safe so it was recalled. Then there was a massive failure involving the ventilators. In total, 2,200 ventilators were ordered, at a cost of €81 million, from different suppliers not previously used. Fewer than a quarter were delivered and none was put to clinical use. That is extremely concerning when we see everything going on in this State. Can the Minister of State confirm for the record that there were no other such purchases of faulty goods or equipment?
These stories of the delivery of substandard medical equipment to the HSE underline the importance of having central procurement. The aims of public procurement are to make sure that we achieve a good price for the State, obtain a quality product with basic standards and have transparency, whereby we know deals are fair and non-discriminatory. In an atmosphere of emergency procurement, when facing a crisis as great as the global pandemic, of course the three pillars of procurement are skipped and the State runs the risks of obtaining a low-quality product and overpaying for goods. It also runs the risk of a failure in transparency whereby we must ask whether we are sure funds have been correctly allocated. What the Deputy has described just underlines the reasons we have public procurement in place and the importance of having it.
It is possible to obtain goods in an emergency by short-circuiting or bypassing the normal public procurement procedures. While some of the PPE that was delivered to Ireland was unusable and substandard, 80% of it, I believe, was acceptable. If we cast our minds back to the time when health business services representatives of the HSE were on a runway in China trying to negotiate against other countries to obtain vital PPE to protect front-line healthcare workers and elderly people in nursing homes, we must recall that they had to get PPE virtually at any cost. They had to get it back to Ireland. They succeeded with the help of Aer Lingus and the heroic help of many people across the public and private sectors, who joined together and brought back as much PPE as they could. I understand that the HSE currently has a great surplus of PPE and has a supply that is expected to last for many more years than first believed. It is true, however, that some of the PPE was substandard, and that underlines the importance of having public procurement guidelines in place.
I do not believe anyone would argue that we do not need public procurement guidelines. The Minister of State did not really answer my question on whether there were purchases that we are not aware of. He said 80% of the equipment was to standard but that still implies a significant risk. I am aware that we went outside the normal competitive process and used negotiated procedure but there were clearly huge risks and issues over substandard or totally faulty equipment. A recent study by the World Bank ranked countries' approaches to procurement across a range of factors, including regulation. We did not score well in that regard; in fact, we scored quite poorly. I am interested in having an answer to my first question. Second, what does the reform board plan to do in respect of regulation?
The Deputy's first question was on the extent of the procurement and whether more substandard equipment was delivered to the HSE. As she can imagine, I would expect there was more. I do not have the full report from the HSE. It has sent us initial reports at this stage stating how much of its procurement was done in an emergency fashion. The Comptroller and Auditor General will also be investigating the matter. In this regard, the Minister for Public Expenditure and Reform, Deputy Michael McGrath, wrote to the Minister for Health, Deputy Stephen Donnelly, to advise him that the emergency phase had now passed and that we now needed to return to normal procurement rules and monitor everything. We must ask what we learn from this and what the outcome or consequence is. It is for the interim procurement reform board and the Government as a whole to assess what happened in the Department of Health, the circumstances, the extent and the changes that need to be made to address the issue.