Alice-Mary Higgins (Independent) | Oireachtas source

I will speak to section 3. Of course, we can discuss it on Report Stage but I would have concerns on this. Section 3(4) is a crucial part of the Bill, but I will be open to see what the proposals are.To be clear, section 4 deals with the contract award criteria. These are the criteria on which decisions as to how public contracts are awarded are made. Under the EU procurement directives, contracts must be awarded on the basis of the most economically advantageous tender. There is provision within these directives for three approaches to assessing what is the most economically advantageous tender. One approach is based on a price-quality ratio, another is based on price or cost only and another is based on the life cycle costing. In my Bill, I seek to ensure that the price-quality ratio, either on its own or in combination with the life cycle costing, becomes the default main measure. However, I do not preclude the use of lowest price or lowest cost criteria only in my legislation. The Bill is quite clear that there is no prohibition on the use of a lowest price or lowest cost approach only but simply requires that where that approach is taken, a declaration is made that explains why that approach was chosen. I believe this is absolutely consistent with the requirements of the EU directives.

This is the core part of the Bill because, while we have those three options available and while they are equally encouraged, the lowest price and lowest cost approach has effectively become the default mechanism. It is the one used most easily. It is seen as the shortest route to take the lowest price approach even though there is incredibly strong evidence that, when that approach is taken, it often results in further costs down the line arising from supplementary claims. We could list examples, from CervicalCheck to Carillion and others, where taking the lowest price approach has ended up costing the State more in the long run.

My Bill does not remove the existing discretion. That was an option when the directive was originally being transposed. The 2014 directive encouraged states to use procurement as an effective tool to deliver on environmental and other goals. The State chose not to exclude the lowest price only approach, which was an option under the directive. My legislation respects that decision. Under the Bill, contracting authorities will still have discretion but they will be required either to think about quality in the sense of putting together a request for tenders based on price and quality or to think about why they are not considering quality and to provide a declaration setting out the reason they have chosen the lowest price approach.

I am happy with and appreciate the constructive engagement we have had with the Minister of State and his office but, while we can look at the detail within section 3(4), my Bill does not preclude the use of the lowest price approach, although it does require an explanation. Unless that is included in the Bill, it is not clear what the legislation adds because it is about changing the culture. It is already possible under the legislation to use approaches based on the price-quality ratio or the lowest price. The Bill just asks us to stop and think about the use of the lowest price approach. When the lowest price approach is used, the reason must be explained.

I will come to the question. I do not know if this relates directly to section 3(4)(b). Again, I am happy to engage further on Report Stage but it would be useful if the Minister of State were to indicate which paragraphs of section 3(4) are likely to be the subject of discussion at that point because, again, they do slightly different things. I will be really clear for the record. The Bill does not remove discretion. It creates accountability. That requirement for an explanation is an attempt to shift the culture because, while some public bodies already use the price-quality ratio approach a lot, others do not. The Bill endeavours to empower procurement officers who want to go for the price-quality approach and to make that approach the easier and more automatic option. It aims to make using the lowest price approach an exception rather than the rule.