Seanad debates

Friday, 28 May 2021

Search and Rescue System: Motion

 

9:30 am

Photo of Hildegarde NaughtonHildegarde Naughton (Galway West, Fine Gael) | Oireachtas source

I thank the Senators for their contributions. This debate presents an opportunity to underline the importance of the Irish Coast Guard’s aviation service to Ireland as a maritime nation and I welcome the opportunity to set out the current state of play in terms of the ongoing procurement process which is being managed by my Department. The motion tabled by Senators Craughwell and Boyhan relates to the coastguard contract. As Senators are aware, the Government has tabled a countermotion which we contend clarifies some of the issues raised in the motion and sets out the process being followed to ensure we procure a fit-for-purpose coastguard aviation service once the current contract ends.

The provision of an effective maritime search and rescue service is critical to Ireland as an island nation with a strong maritime sector. Throughout Covid, we have seen just how dependent we are on the maritime and shipping sector for the supply chain of essential goods and medicines. It is to the credit of the sector that it has shown such resilience in the face of the dual challenges of Covid and Brexit. Our fishing sector is also a vital lifeblood of coastal communities, allied with a buoyant and growing maritime leisure sector. All three sectors depend on the reliability and professionalism of the Irish Coast Guard and all its component parts, including the Coast Guard helicopter service, to offer them a service which can deploy at a moment’s notice to rescue them when needed and bring them to a place of safety. For that reason, decisions on a significant component of that service require careful consideration. We need to ensure we procure a service that is fit for purpose, meets our domestic and international obligations and delivers value for the significant level of investment involved.

The Coast Guard has a distinguished record in delivering search and rescue services for many decades, including the management of aviation services delivered by the Air Corps and civil operators. It is leading on this process within my Department. The current contract with CHC Ireland DAC has been in place for ten years, since July 2012, with an option to extend for a period of up to three years to 2025. The contract has been extended initially for one year, to July 2023, to facilitate a seamless transition from one service to another.

Given the significant lead-in time for a procurement of this scale and importance and to ensure we are in compliance with the public spending code, the process for scoping the new service commenced in November 2019. A steering group chaired by the director of the Irish Coast Guard was established. The group comprises all key State stakeholders, including the Department of Defence and, formerly, the Air Corps. It has aviation, legal, procurement and economic appraisal advice available to it.

The Department conducted an extensive consultation process with all key State and other SAR stakeholders to consider the scope and demand for the service over the lifetime of a new contract. A strategic assessment and preliminary appraisal was undertaken which took account of all the various inputs. This was agreed by the steering group and brought to Government in July 2020. The report set out the context for the Coast Guard’s aviation programme and considered the wider whole-of-government needs, including a survey of existing policies and strategies relevant to the programme. It took on board key lessons from the existing service and contractual arrangements. It identified the spending objectives of the programme, including existing arrangements and relevant business needs. It also included an appraisal of various service delivery options, including the State assuming full responsibility for the service, either through the Air Corps or a dedicated Irish Coast Guard aviation branch. Both those options were ruled out for a variety of reasons, including the level of risk that would be assumed by the State.

We are now in the next phase of the public spending code, which is the preparation of a detailed business case for Government. This is being carried out by KPMG with input from the Department’s project team and external aviation expertise.It was acknowledged that the Air Corps was not in a position to take full responsibility for this service on the basis of that initial assessment, which was agreed by the Department of Defence. However, at the request of the Department of Defence in November, my Department agreed to explore the viability of the Air Corps providing some element of the SAR aviation service as part of this business case process. An Air Corps submission received in March this year is being reviewed as part of the preparation of that detailed business case. We expect this process to be completed in the coming months and a memorandum brought to Government which will recommend a preferred option and a procurement strategy to achieve that, based on that business case.

The motion calls into question the expertise available to the Coast Guard. To be clear, the Coast Guard has decades of experience in managing aviation services, whether through the Air Corps or a civil operator since 2004. To assist in certain aspects of this work, it retains the services of an aviation consultant. The current consultant was procured by open competitive tender in 2017 based on the requirements set out at that time. It has provided an excellent level of service across a wide range of technical issues, including the current procurement process. Its technical expertise and experience embraces all relevant matters, including coastguard and SAR-related issues internationally. KPMG has also been contracted to put the detailed business case together and, in addition to its own economic and technical expertise, it has aviation expertise available to it to support this work.

In terms of compliance issues, a process auditor has been appointed from the outset to ensure compliance with procurement and public spending code procedures. The process auditor is answerable to and reports to the Secretary General of my Department regarding any concerns he may have with the process and is independent of any other reporting arrangements related to the procurement.

As the Government countermotion makes clear, there is no doubt with regard to the capability and expertise of the Air Corps in aviation matters. It is precisely for that reason that it was involved as a strategic stakeholder in the development of this project until it was requested by the Department of Defence to prepare a proposal to provide an element of the SAR service. In order to avoid any suggestion of a conflict of interest, its participation on the steering group ceased. This is about protecting the integrity of the overall process. I am satisfied that the process under way in respect of the development of the new service is robust, rigorous and fit for purpose.

The motion refers to issues relating to the existing contract with CHCI and the manner in which the tender process was conducted. The Government countermotion seeks to correct some of the claims made and set the record straight. The existing contract with CHCI was procured by way of an open competitive tender following extensive consultation with all stakeholders. That process was subject to independent external audit and no issues of concern were identified. As regards the value for money aspects of the existing contract, these were addressed as part of the original evaluation by relevant experts, including the Department of Public Expenditure and Reform and the National Treasury Management Agency.

The CHCI service is kept under constant review in terms of contractual performance. It was subject to a mid-term assessment in 2018 to identify,inter alia, any lessons for a new service. The contract continues to deliver against the key performance measures set for it. This is not a fixed-cost contract. There are agreed monthly standing charges and there are variable elements on top of that. There are costs associated with modifications which are agreed with the Irish Coast Guard. There can be other additional costs, all of which are provided for in the contract terms. The contract costs, on average, approximately €57 million per year, which is broadly in line with expectations at the outset.

For clarity, the requirements set out for the current tender were also the subject of extensive consultation. The assumptions and recommendations as regards these requirements, whether for surge capacity or increased range, were all agreed and validated by the helicopter study group which comprised all key State stakeholders, including the Department of Defence and the Air Corps.

It would be imprudent for any emergency service to base its requirements on historical data alone. Emergency services by their nature must provide for scenarios that may happen, even where the likelihood of such scenarios is low.A core requirement of the current service is a mass rescue scenario, which thankfully has not occurred but would require significant surge capacity which no other aviation service in the State could provide.

As for Air Corps participation, the Department of Defence noted at the time that the Air Corps no longer had the operational or management experience required to run the SAR service required and that substantial investment in equipment and training over many years would be required before an Air Corps maritime SAR capacity could be made operational again.

The level of capacity available to the State through this contract is significant and has been utilised to supplement a wide range of aviation needs beyond purely maritime search and rescue, including assisting the HSE, the National Ambulance Service, the island communities, An Garda Síochána for land SAR incidents and the Department of Housing, Local Government and Heritage and the fire services in context of major emergency needs.

The existing service was procured using a sound rationale and validated assumptions for potential demand. The tender process was considered robust and compliant and the terms of the resulting contract were competitive and based on a thorough evaluation of the respective bids. The contract represented the best value available from the market at the time.

The current procurement process is adhering closely to all the required steps of the public spending code for current expenditure appropriate to a service such as this. It has involved all key State and non-statutory stakeholders.

The project team leading this has all expertise it needs for this stage of the process including aviation expertise with varied and relevant helicopter, SAR and regulatory experience as well as KPMG with a strong record in similar business case development.

My Department has been keen to ensure that all interested parties in the eventual tender process are dealt with fairly and transparently. In the interests of transparency, the Department held a public webinar in September which provided analysis to date to all interested parties. A dedicated web page was created on which all relevant information and updates on the process are provided to everyone at the same time. This is in addition to broadcasts submitted via eTenders to the market. This is the place to find reliable information on the process.

I endorse the approach being taken my Department to this process which will provide the required input for the Government to make the right decision on this important matter. Therefore, I ask Senators to support the Government’s amendment.

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