Eoghan Murphy (Dublin Bay South, Fine Gael) | Oireachtas source

Public procurement is governed by the EU treaty, EU directives, regulations and national guidelines. These set down rules whereby contracting authorities must award contracts under procedures designed to achieve value for public money in an open, transparent and non-discriminatory competitive process. The rules recognise that public procurement can be used to promote wider economic, social and environmental issues and further legal clarity in respect of the use of social clauses has been provided in the new EU directives on public procurement, which were transposed into Irish law last May. The general position is that social criteria can be included at various stages of the procurement process from business case, through to specification, selection and award stages through to the contract performance stage provided that they are linked to the subject matter of the contract and are contract specific. In respect to the latter, it is important that contracting authorities have in place procedures to effectively monitor compliance with the conditions of the social clause.

For example, social clauses have been successfully piloted in the devolved schools building programme where a clause was included in the public works contracts which required that 10% of the aggregate time worked on site to have been undertaken by individuals who have been registered on a national unemployment register within the EU for a continuous period of at least 12 months immediately prior to their employment on the project, and 2.5% of the aggregate time worked on site to have been undertaken by individuals who are employed under a registered scheme of apprenticeship or other similar national, accredited training or educational work placement arrangement. The Department of Social Protection, through its Intreo offices, has provided support to the contracting authority in monitoring compliance with the conditions of these social clauses and also to contractors in meeting their obligations under the contract by providing suitable candidates to match the skills requirements from long-term unemployed construction workers. Approximately 48 long-term unemployed persons have been hired across the 15 sites in question out of a total workforce of approximately 440. The appropriateness of social clauses In procurement projects will vary from contract to contract.

Experience in other jurisdictions suggest that they are most successfully employed in large scale works contracts as opposed to contracts for goods and services. There are also other important considerations. Account needs to be taken to ensure that value for money is not adversely affected, additional costs are not placed on domestic suppliers relative to other potential suppliers, contracts are of a minimum scale to absorb the increased administrative requirements, and the targeted benefit is capable of being measured and monitored during the execution of the contract. Where recruitment and training clauses are used the contracting authority needs to have a good understanding of supply side issues such as for example in the area of training supports. It is important that contracting authorities are not compelled to use social clauses on every contract, particularly where their deployment may disproportionately impact on SMEs bidding for public contracts. Notwithstanding these concerns, the Government sees merit in developing a social clauses framework.The OGP is currently developing practical guidance aimed at providing assistance to contracting authorities in the use of social clauses across the public sector. These will reflect the new EU procurement directives. In the interim period, there is no impediment preventing contracting authorities in the local authority area from inserting social clauses in their contracts. There is sufficient information available from their use in the pilot projects already referred to and other PPP projects to allow local authorities to devise suitable clauses for inclusion in works and capital projects if they so wish.

Overall, it is important that social clauses should be implemented in a targeted manner as opposed to any blanket or across-the-board approach, which may cause more difficulties than it solves.