Paul Gogarty (Dublin Mid West, Independent)
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The Minister of State's colleague and my constituency colleague, the Minister of State, Emer Higgins, said a while back that efficient use of public resources contributes to better delivery of services for our citizens. Obviously, the Minister of State present cannot disagree with that. It makes a lot of sense. The Minister of State, Deputy Higgins, mentioned she had launched a public consultation in March to ensure all those with an interest in the future direction of public procurement have an opportunity to inform the strategy. The consultation included an online survey and there was a lot of talk about three regional roadshows. I am not here to just criticise the Government, throw stones and make points. I am looking for some constructive engagement. We have a lot of small businesses, start-ups and public buyers from all sectors, and anything that makes the process easier is a good idea.

A lot of the talk about procurement, and when I talk about public procurement, I am obviously talking about the State but equally about local authorities, and a lot of the stuff that is always in the news is the likes of the children's hospital, which has consistently gone over budget, has been delayed time and again and goes on and on. However, multiply that one hundredfold in terms of all the little, or not so little, projects around the country that have either run up huge costs, not been delivered properly, or not been delivered on time.

When we are looking at the Government's national procurement strategy, and I acknowledge the European Union legislation on tenders comes in to play here as well, and we have an input into that, we need to get a lot tighter on ensuring the dodgy companies do not get the tenders in the first place. If we take the likes of BAM, for example, it was in the news in the UK and Ireland before for failures with the concrete used in school buildings, but I never saw a penalty clause enacted so that companies like this would find it more difficult or would be barred for a period from putting their names forward for contracts. Surely if a company has tarnished its reputation, it should be put on the sideline and given a yellow card or a red card.

In that context, I note the Construction Industry Federation has been charged with moving the procurement thing along. Last November, it produced its strategy document for the improved delivery of public infrastructure, Fair and Balanced Reform of Public Procurement in Ireland. Even though it is an organisation that is getting involved in doing something that benefits its constituent members, there is a lot of very good recommendations within its document. There is nothing that puts it more in focus and says what the ordinary person might think than, if there is someone not doing something well, there need to be consequences.

I know some work has been done in the area from a legislative point of view, including from Senator Alice-Mary Higgins and a number of colleagues, which was the Quality in Public Procurement (Contract Preparation and Award Criteria) Bill 2021. I note the Bill is only up for Second Stage in the Dáil in 2025, so it has been a long time coming. One of the Minister of State's predecessors had issues with putting conditions on projects where more than 50% would be criteria other than price. For too long, we have been looking at either the lowest price or the quickest job without looking at the overall economic benefit, because this comes into play, and I will talk about his after I hear the Minister of State's reply, years later when we work out if a particular tender was a good one and whether it provided a good service to the State in terms of the money we put in.

Marian Harkin (Sligo-Leitrim, Independent)
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I thank Deputy Gogarty for raising this matter and I am responding on behalf of the Minister. Public procurement is governed by EU and national rules. The aim of these rules is to promote an open, competitive and non-discriminatory public procurement regime which delivers transparency and value for money outcomes, which the Deputy referred to. With respect to public works, the capital works management framework, CWMF is the structure that has been developed to deliver the Government’s objectives regarding public sector construction procurement reform.

The CWMF suite of contracts contain clear requirements with respect to performance and delivery, whereas the project-specific aspects such as scope, design and technical specifications are matters for the contracting authority to determine. The CWMF also provides a suite of guidance material covering all aspects of project delivery. Other contracts, such as the NEC, might be used on larger infrastructure projects.

An applicant's eligibility to participate in public procurement competitions must be determined in a manner that meets the principles of transparency, non-discrimination and mutual recognition. Criteria for qualitative selection are defined in the EU procurement directive.

When carrying out procurement procedures, contracting authorities already have discretion to exclude tenderers from competing in a public procurement competition for reasons set out in Regulation 57 of SI 284 of 2016 - European Union (Award of Public Authority Contracts) Regulations 2016. This includes poor past performance where the tenderer has shown significant or persistent deficiencies in a prior public contract which led to termination, damages or other comparable sanctions. However, suppliers must not be excluded if they have provided sufficient evidence of reform, for example, payment of compensation, co-operation with investigating authorities and changes in organisation or personnel. The management of the tendering process for a public contract including the application of certain exclusion grounds and selection criteria is a matter for each contracting authority. It is the responsibility of each contracting authority to ensure that tenderers comply with all the requirements of the process.

There are a number of elements already present in CWMF contracts that provide contracting authorities with the ability to manage poor performance. A consistent contract management regime is critical and clearly defined milestones should be set down for evaluation purposes. The public works contracts require payment to be made on a monthly basis for work completed to the standard specified in the contract. Where the works completed do not meet the required standard, the value of the defective work may be deducted from the payment due until the matter is rectified.

Many of the larger projects also carry performance bonds which may be called upon in the event of a breach of contract. Persistent failure to comply with an instruction under the contract is a breach and may result in the bond being called upon to pay for the work necessary to make good a defect.

Deputy Gogarty mentioned one or two companies but he will understand that I cannot comment on particular companies. The rules apply to all companies.

Paul Gogarty (Dublin Mid West, Independent)
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I also wish to raise the paltry bonds payable by developers for estates to ensure they are finished so that they can be taken in charge. It is such a small amount that in some areas of my constituency, 15 years later some estates have still not been taken in charge. Similarly, the bonds payable by companies for large-scale contracts are often not worth the paper they are written on. There is no incentive at all.

In my county of South Dublin, several tenders have collapsed because the local authority had discretion but it possibly did not go as heavy as it could with the rules that were in place. I also contend that there are a lot of loopholes in the rules. I was inspired to raise this issue tonight because of the Lucan swimming pool project. It was approved by councillors in 2018 and got delayed a little bit through Covid, but the council took its eye off the ball and it got to the stage whereby if it tried to end the contract, as there was a clause allowing for that, it would probably take longer to retender and it would cost more. The project has already gone up by between €4 million and €5 million from the original estimate.

The Minister of State referred to discretion. Companies have a lot of outs, for example, where, as she mentioned, they can provide evidence of reform such as the payment of compensation, co-operation with investigating authorities and changes in organisation or personnel. I have not seen too many situations where companies have been refused point-blank on the basis that they have not sufficiently reformed or that the new group of directors is not evidence of sufficient change. Local authorities have too much discretion. First, they need to be given less discretion. At national level we need to tighten up the rules so we do not have as many outs or little clauses that they can get out of because the general population have seen the costs and time span increase and they are not happy with that. We need to get a little tougher.

Marian Harkin (Sligo-Leitrim, Independent)
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Deputy Gogarty raised a number of issues in response, some of which I do not have any information on here. I know he appreciates that. One of the points he raises is the discretion of local authorities. For clarity, I will reiterate the discretionary exclusionary grounds that contracting authorities may choose to apply in cases of procurement. I am aware that I used the word "may", which chimes with the point the Deputy raises. The local authorities have the authority to do so if they wish. The grounds are: poor past performance where the candidate has shown significant or persistent deficiencies in a prior public contract which led to termination, damages or other comparable sanctions. Suppliers must not be excluded if they have provided sufficient evidence of reform, that is, the payment of compensation, co-operation with investigating authorities and changes in organisation and personnel. The maximum period of exclusion allowed is three years for discretionary exclusion grounds.

I understand what the Deputy says. If there are specific questions he wishes to ask, I will ensure they are passed on to the Minister's office. Some of the issues he raises are of importance. I can see why he feels that even if the discretionary exclusion grounds are used, they might not always be as effective as we hope they could be, and that perhaps they should be used more frequently. I will not comment beyond that because these are individual cases about which I have no information.