Mark Daly (Fianna Fail)
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I welcome the Minister of State to the House.

I welcome, from County Meath, Enfield national school, led by Michelle. You are all most welcome to Seanad Éireann. Michelle, just so you know, the rule in the Seanad is that there is no homework for the rest of the week for all students who attend. The ones who have not shown up have to do the homework, but if you are on the school trip to Leinster House and to the Seanad, there is no homework for the rest of the week.

Emer Higgins (Dublin Mid West, Fine Gael)
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I did not know it was for an entire week. Thank God it is Thursday.

I welcome the opportunity to address Seanad Éireann and to share with Senators my vision and my ambition for public procurement. Public procurement is a key priority of our Department and is vital to ensuring we deliver better public services for all of those living here in Ireland. I thank Senator Kyne for the invitation to address the House and to have this discussion, and I thank all the Senators here for giving their time to share with me their views on public procurement.

As Minister of State with responsibility for public procurement, digitalisation and egovernment, I wish to set out some of the key initiatives my Department officials and I are working on in these areas. As everyone in this room knows, public procurement is a fundamental, crucial component of democratic governance, economic well-being and sustainable development. From building roads and power stations to purchasing pharmaceuticals and securing waste collection services, efficient use of public resources contributes to better delivery of services for our citizens.Public procurement also serves as a significant policy instrument, which governments can use to propel changes in public service delivery, create jobs and stimulate private sector growth. A well-performing public procurement system increases citizens' confidence in government and private sector competitiveness, especially when it comes to levelling the playing field for small- and medium-sized businesses, including micro-enterprises, startups and social enterprises. That is why I intend to bring to Government for approval Ireland's first ever overarching national public procurement strategy. This will set out the future direction of public procurement for the next five years. This strategy will require a whole-of-government approach both to its development and its implementation. Consultation and collaboration are central to ensuring we are developing a strategy that works for everyone involved.

With that in mind, I 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 this new strategy. The consultation included an online survey and three regional roadshows. The Minister, Deputy Chambers, opened the Dublin roadshow held on 12 May. I opened the Cork roadshow last Friday, 16 May. We plan to hold one in Athlone on 9 June. These roadshows provide an important opportunity for small businesses, startups, social enterprises, utilities and public buyers from across sectors to engage with one another to discuss the barriers and the opportunities in public procurement. I thank Senator Alice Mary Higgins for supporting this work and for hosting a webinar and inviting my officials to present at it. I welcome her interest and work in this space over the years, in particular the Senator's Private Members' Bill, Quality in Public Procurement (Contract Preparation and Award Criteria) Bill 2021. In parallel with the public consultation and our roadshows, my officials are holding bilateral meetings with all Departments and key agencies to explore opportunities to align public procurement policy with wider Government policy. This will be the first time that has happened. We will agree desired outcomes and actions and do that together.

Public procurement accounts for a large share of state spending. The EU calculates it as 15% to 19% of GDP. It can assist a state to deliver better public services and enable public money to be spent in an efficient and transparent, sustainable and strategic way. For many sectors such as energy, transport, waste management, social protection and the provision of health or education services, public authorities are the principal buyers. Given its scale, public procurement represents a significant opportunity for businesses of all sizes but particularly startups, emerging micro-enterprises and SMEs. I will come back to that shortly. Public procurement can also help to achieve wider societal, environmental and economic benefits. For example, a public body can use its procurement to stimulate employment, including among those disadvantaged groups who are underemployed. It can also promote innovation. It can support the growth of SMEs, including social enterprises, and progress government objectives in the areas of climate change and social inclusion in particular. That is why my Department will shortly publish an updated circular on green public procurement. That will set out the key actions in Buying Greener: Green Public Procurement Strategy and Action Plan 2024 to 2027. That is also why my officials continue to work so closely with the Environmental Protection Agency, EPA, and with the Department of the Environment, Climate and Communications on enhancing the green criteria search to keep up to date with EU and national policies.

The programme for Government identified developing Ireland's enterprise base as a key focus for this Government for the next five years. From backing small businesses and startups to scaling indigenous firms, it is important we support them. The role public procurement can play is emphasised by the Government's commitment to reviewing the public procurement process and working to ensure greater participation from SMEs, including micro-enterprises. Public procurement has significant potential to support SMEs and, with it, to support regional development and the wider economy. The award of a public contract can act as a springboard for emerging micro-enterprises and SMEs to expand and even to export.

I previously served as Minister of State with responsibility for business, employment and retail, so I am keenly aware of the challenges faced by Irish businesses, especially in these uncertain times. I am also aware of the growing network of social enterprises. They have the capacity to deliver a vast and an expanding range of goods and services. Awarding a contract to a social enterprise can maximise the societal impact of procurement spend. I am delighted that one of the foundational policy positions of the strategy is to make participation in public procurement easier for suppliers, particularly family businesses, SMEs and social enterprises.

Each year, billions of euro are spent by the State on goods, services and works. This brings obligations but it also brings opportunities. My Department will continue to work to ensure value for money is at the heart of all decision making. I am keen to use the strategy to explore new ways to promote efficient and effective public procurement that achieves the best possible value for money for the people, our citizens. By this I mean ensuring optimal use of resources, both human and financial. I mean on-time delivery, quality, value for money but also using public procurement to deliver wider societal economic and environmental impact. Each euro we spend on goods, services and works has the possibility to bring far-reaching societal and economic benefit.

Through the public services transformation strategy, my Department encourages public servants to embrace a culture of innovation and to ensure the best possible outcomes are achieved for Ireland. Through the new procurement strategy, I am keen to explore ways in which we can promote the use of innovation procurement as a strategic tool. Innovation procurement has the potential to support the delivery of transformational change by revolutionising the way we purchase goods and services while simultaneously shaping new markets, supporting startups and innovative SMEs, and supporting public bodies to overcome societal and environmental challenges.

It is a really exciting time for public procurement. Alongside work to develop Ireland's first national public procurement strategy, my Department is also developing a first digital strategy for public procurement. The digital strategy will provide direction for the digital transformation of public procurement in Ireland. It will set out a vision, enablers, strategic goals and desired outcomes for digital transformation. In parallel with the development of a national public procurement strategy and a digital strategy for public procurement, there is also a great deal going on in the EU space. The EU Commission is reviewing the existing legal framework governing public procurement. My Department is consulting at a national level to inform our engagement with the Commission as part of the evaluation of the procurement directives and negotiations on future legislation.

In framing our new national strategy, I am conscious of the need to reflect the developments at EU level with the requirements for a dynamic and effective public market system nationally. In harmony with public procurement policy, my Department is also responsible for fully leveraging the benefits of the State’s expenditure through the establishment of central procurement solutions. Central procurement solutions, and they are primarily framework agreements, are national level arrangements established by my Department. They are available for use by other Departments and State agencies. Central procurement is Government policy. It is designed to deliver better quality procurement solutions that meet the needs of the public service and better society. These procurement solutions established in my Department aggregate the State’s expenditure, deliver value for money and provide process efficiencies for both public buyers and suppliers as well as managing risk. In 2024, central solutions, with an estimated contract value of €4.2 billion, were established. Some €1.9 billion flowed through these central solutions, which is the highest ever annual usage recorded, with an estimated €65 million to €70 million in cost avoidance and savings.

Public sector bodies continue to see the advantages of using our Office of Government Procurement, OGP, central solutions. Central procurement solutions also provide support for the Government’s horizontal policy considerations, including such areas as green public procurement, the circular economy, SME access to public contracts and the inclusion of social considerations. My Department is responsible for 11 master categories of expenditure for commonly required goods and services that all Departments and agencies require in the course of their work, such as things we all use in our offices day to day. Across these categories the Department has established 95 central procurement arrangements. I will come back with some illustrations of these in my closing statement. I am conscious of time, so for now I will hand the floor over to Senators for their views, comments, suggestions and ideas.

Mark Daly (Fianna Fail)
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I thank the Minister for her opening remarks. Before I call the first Senator, I welcome to the Distinguished Visitors Gallery our Minister of State from Donegal, Deputy Charlie McConalogue, with his guests from the Irish Coast Guard.They are most welcome to Seanad Éireann. He is very involved in the campaign to keep open the marine rescue co-ordination centres in Malin and Valentia. We have some skin in the game in Kerry as well. Due to the combined efforts of Donegal and Kerry, they are both still operating, thankfully, with the new equipment that was needed which the Minister of State fought hard to secure along with his colleagues up there. I thank him for his work keeping us all safe.

Cathal Byrne (Fine Gael)
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I welcome the Minister of State. I thank her for facilitating us with her presence. I welcome our guests. I hope they have a wonderful and enjoyable trip to Leinster House. I am the Fine Gael spokesperson on public expenditure and infrastructure. I look forward to working with the Minister of State and the ongoing engagement we have had on some of these key issues. The whole idea of public procurement has to be based on securing value for money for the taxpayer. At the moment, 99.8% of businesses in the country are small- and medium-sized enterprises. It is important in our focus on public procurement that those businesses are in a position to apply and secure these tenders, making sure it is possible for them to compete with larger companies when it comes to securing a public contract. I commend the Minister of State on the work on the national strategic dialogue workshops. It is important the Minister of State and senior officials hear directly from the businesses applying for these contracts about challenges and issues they may have. In the programme for Government, there is a commitment to review the public procurement process. As part of that, I urge the Minister of State and her officials to make sure the process by which the State tenders for these contracts is simple, accessible to small and medium-sized enterprises and done in plain English. We know how hard small business owners work and how caught they are for time. It is important that if they decide to take the initiative and apply for a contract that could generate more employment for them and transform their business, particularly if they won a substantial contract from the State, the process does not put them off applying because of how long, technical and complicated it is. There should never be a situation that somebody needs to outsource the tendering process application stage to a separate provider. Every small business should be able to apply for these contracts. It should not be the case that you have to stop what you are doing in your business, pause everything and spend a week or two gathering up information and then submitting your application. As part of this review, I encourage the Minister of State to make training available through local enterprise offices, ensuring businesses are able and upskilled and that it is possible for them to apply for these tenders.

I know the Minister of State has experience in the Department. There a massive opportunity to support our small and medium enterprises through the local enterprise offices. In my experience in Wexford and from speaking to businesses in advance of today's debate, they are not fully aware of how to apply for a Government contract, where to start, who decides, if it is a website, etc. Through local enterprise offices, there needs to be a promotional campaign to say the review is under way and to explain how to apply for contracts available today, next week, next month and the rest of the year. There is an opportunity in that regard for the Minister of State to lead on.

I highlight the enormous number of contracts provided through local authorities. It is important, within the confines of EU procurement law, that it is possible for local authorities to create a hierarchy where local suppliers and small businesses have a genuine opportunity to compete for contracts with the local authority. I am aware there are challenges and issues with European Union legislation in this area but we should support local businesses to apply for local authority contracts. If we can get to that stage while ensuring value for taxpayers' money, it would be significant.

I wish to highlight a business in Wexford called Kent Stainless. It was set up in 1982 by Pat Kent and now employs more than 200 people. Everyone will have seen the great work it has done. When you go to a Luas stop anywhere in Dublin, the passenger shelters, timetable stands, bollards and waste bins were all produced in its plant in Ardcavan in Wexford. That came from a public procurement process that gave the business the opportunity to compete with international companies for the provision of those stainless steel products. It is now a thriving business in Wexford that exports stainless steel products across the world. They will tell you a key ingredient in their success over the years was securing that contract for the works on the Luas. The joke in Wexford is that it built everything at the Luas stop apart from the Luas itself. I also wish to discuss the opportunities we have as a country in the EU review of the framework for public procurement taking place at the moment. There is a genuine opportunity for us during our Presidency of the EU to have a real input into the procurement processes being reviewed at EU level. It should always be the case that there is value for taxpayers' money and ensuring competitiveness. A big challenge which we all know across the EU is how competitive the EU is versus other large economies like China and America. There is an opportunity for us during the Presidency of the EU and for the Minister of State to take the lead on this. I encourage her to ensure the same thread of plain English and basic, inviting, simplified and easy to understand tender documents transfers to the European Union level.

I commend the work by, I believe, 127 employees in the Office of Government Procurement. Billions of euro are delivered in contracts through that office each year. It is important to put on the record of the House my appreciation for the work in that area and to encourage them to continue the pursuit of value for money on behalf of all taxpayers.

Gerard Craughwell (Independent)
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I welcome the Minister of State to the House. This is my first time to address her as the Minister of State. I congratulate her on her elevation. I wish her the best of luck. The Minister of State said at the outset that she was responsible for the purchase of everything from major projects down to toilet rolls for national schools. That is a massive undertaking for any Department to have oversight of. Central procurement is all fine and dandy but, when it comes to schools, I am not sure how it operates now but principals came to me saying some of the stuff they were forced to purchase through centralised purchasing could be purchased far cheaper on the open market. They wondered why they were tied to centralised purchasing. Perhaps the Minister could investigate that in her spare time, if she ever gets any. The idea that we centralise everything seems like a great idea but some things are not suitable for centralisation.

I wish to talk about accountability with respect to public procurement. I and others envisaged serious problems in Ireland's search and rescue contract. The Oireachtas joint committee tried on five occasions to have the Secretary General of the Department come before the committee to answer questions. He refused. He gave a number of different reasons. He refused an in camera meeting in private session. He said anything he did say had to be in public session. He refused to come to a public session because he was advised, he said, by the Attorney General not to. He refused a second attempt at a public hearing.On the third attempt, he quoted EU paragraph 17 or something. I read the full document and paragraph 85 said they were responsible and answerable to the Oireachtas. We were not a tendering agency; we were an oversight body. Finally, he accused the Oireachtas joint committee of having a biased member on the committee. His last words were that Secretaries General were not answerable to committees and that that was what Ministers were for, but I had a letter from the joint Ministers saying they had no oversight of the contract. We wonder how we finish up with a children's hospital fiasco. This is how. People on the ground are making decisions. Ministers cannot be everywhere. The portfolios of Ministers in this Government are mind-boggling. I do not know how they get time to do anything. At the end of the day, somebody has to be answerable to Oireachtas joint committees. Somebody has to be prepared to appear before Oireachtas joint committees.

Looking at the paperwork in the search and rescue contract, it was all about people covering themselves. We had an aviation expert, but was that person an aviation expert? We find that person was not a pilot and that he employed one person, namely, himself. We find that the company had one contract, that being, with Ireland. That is €800 million of a contract. Everything we said about that contract going sour has come to pass. It was supposed to be taken over by July of this year and will not now be taken over until 2026. Everything about it has been a disaster.

For the protection of the Minister of State and those dedicated public servants she has in her Department, we need a far more transparent approach to public procurement. As Members of the Oireachtas, we need to be able to raise issues directly with the Department involved and with the principal officer, assistant secretary or Secretary General who is making the decisions. We need the decision-maker to appear before Oireachtas joint committees.

Everything my colleague from Wexford said, I fully support. He is 100% correct. Small to medium-sized businesses and micro-industries must have a simplified method of entering into public contracts. It is not the small contracts that bother me, but the ginormous ones that run to millions of euro. What do we do when something goes wrong? We fire the Minister. When the Minister writes to me saying he had no oversight of this contract and the letter is signed by the two Ministers responsible, who is responsible? Where do we turn? Public procurement is the largest single expenditure this country has. Recently, we bought four helicopters for the Air Corps. I understand they were bought without going to tender. Someone simply went to the supplier and told it to provide four helicopters. How is that good value for money? Why was there not a competition? EU rules allow for direct purchase without competition in the defence area but it is a question of oversight. It will be interesting to see what we are paying for each of those helicopters and what other countries are paying for them when there is no competition.

On the search and rescue issue, there was a company used to oversee the paperwork. I am not going to name the company because I am sure it does a good job, but it does a good job of checking to make sure the i's are dotted and the t's are crossed. It has no expertise in what is required for the job. Its personnel are not aviators. They are just people who look at contracts and say they are good and meet all the necessary requirements. We have an aviation expert who is a one-man operation and we have an outside oversight agency that says all the right things have been done. The Oireachtas joint committee really needs to be able to interrogate the aviation expert and ask who he is, what his qualifications are and how he can do this. The same would apply to any engineering job that is undertaken in the State or to any major development. We need to be able to talk to the people who are advising our Departments.

I think colleagues will agree that, if we look across Europe, we will see we have become risk averse in public service. I spoke about this in January. Ardnacrusha cost 20% of our GDP. Imagine the Minister and civil servants who signed off on that. They were the most imaginative people we ever had. Everybody was against what they were doing, including the Department of Finance, but they ploughed ahead and we had electricity all over Ireland at the end of the Ardnacrusha project. We need that sort of risk taking to come back into the public service. We need public servants who are not afraid of losing their pensions if they make a mistake. We all make mistakes and if it happens, it happens. This morning, the Tánaiste had to announce that the national children's hospital would not now open for a further three months. It is going to miss its opening date again. I am sure that frustrates the hell out of the good people in the Minister of State's Department who are trying to move things along, and in the Department of Health, the HSE and every other organisation that is involved.

I appreciate the Minister of State's speech. It was a vision of a future in public service and public procurement. I would like to see that vision come to pass. I would like to see all the other Departments buying into it and accepting that her vision is the vision they should employ. Let us get some serious work done.

I fully agree with my colleague from Wexford that we must get the little guys in this country making money out of procurement. Let us not give it all to major multinationals.

I thank the Minister of State for her time and wish her the very best of luck.

Aidan Davitt (Fianna Fail)
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I am delighted to have the Minister of State here today. I concur with the reference made by Senator Cathal Byrne to Kent's in Wexford. I could not let it pass without mentioning Derek Kent, with whom I served on the Leinster council and several committees in the GAA. There was lots of oversight, and no better man for that than Derek Kent.

I will focus most on an issue that has been hit on by both contributors so far. We had a long discussion about the green public procurement strategy and the action plan in April when the document was released. It was certainly a step forward. The lack of awareness among SMEs of how to tender for public procurement is a massive issue. The way forward is probably through the local enterprise offices and county councils. There should be a grant-type system to enable small businesses to be aware of what they can tender for. I would say 90% of small businesses have no idea about the process, what is required or the paperwork. I find with a lot of that type of stuff that, once you get it in order the first time, it is there for a lifetime. Training is vital to make small businesses aware. I would support some type of grant to enable them to have the bit of time to resource it and get it in order. That would be a help to small businesses, which is part of this.

Oversight is most important. Practicality has to be front and centre as well. In public procurement, practicality still has to be one of the greatest factors, not just price and transparency. The practicalities of the decision-making process are most important. Just because it ticks boxes X, Y and Z, somebody should still be able to take a look at it and say that, although the boxes are all being ticked, it might not be the best man, lady or company for the job.

A lot of this has been thrashed out so far. I appreciate the Minister of State's time. She is a hard-working Minister of State and indeed has been very helpful any time we have been on to her office with the few queries. Keep up the good work.

Conor Murphy (Sinn Fein)
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I welcome the Minister of State. It is an area I had some opportunity to deal with in a previous role that I had, when I was responsible for procurement in the Department of Finance in the North. Of course, one of the first considerations is value for money, as the Minister of State mentioned. We need to make sure that the system is not delivering inefficiencies. In that regard, an important aspect that does not seem to be emphasised in the Minister of State's statement is the need for timely production of information and data so people can see where contracts have strayed over and why and learn the lessons of some of the people who have secured contracts that are underperforming.It seems there is a long period until that information is available. We need to ensure opportunities to learn lessons from the way things are procured, but also regarding the performances of people who procure Government contracts. Timely publication, particularly of bad procurement experiences, is vital to learning lessons.

As the Minister of State said, there is enormous potential for doing public good in respect of procurement. By her own analysis, 20% of GDP is a significant amount of funds the Government is expending on buying services and goods which can be used to support Government policy in a range of areas. While the Government is trying to encourage people to do things, this a policy lever that is available.

The Minister of State mentioned making sure SMEs and social enterprises have improved access and better information, and that is very important. In respect of the supply chain, the ability to encourage people to become involved in the production of goods is valuable. The Covid experience taught us one thing, which is that critical goods not being available to us at the time because they were cheapest in the Far East became a real issue for these islands. There was an opportunity then, which was availed of across the island, and I remember my own experience dealing with it, to get companies to repurpose and supply critical goods for our medical and health services to deal with Covid. Who knows when the next pandemic may come along? If lessons have been learned, we need to ensure public procurement supports. I realise raw materials and other resources are not so readily available on this island, but through procurement we can look at the issue of security of supply chains. That was one of the main lessons that arose from the Covid experience.

The Minister of State mentioned social considerations. I would like to see if the review delves more deeply into that as it seems a vague concept. What are the social considerations? It seems to be it is about making sure social enterprises have more information on how to engage in procurement contracts and secure more contracts, and that is important and necessary, but much more can be done in this area. I chaired the procurement board north of the Border as then Minister of Finance. The board involved people from the private sector who tendered for contracts, social enterprises and the voluntary and community sector, as well as civil servants from procurement functions within a number of Departments, and we came together and established an agreement whereby anyone who secured a Government contract had to at a minimum pay a living wage as set by the Living Wage Foundation. Government contracts could not be secured by anyone unless they paid that. There was also a requirement for people to reach 10% of the value of the contract to be dedicated to social clauses. The intention, and I understand the Department of Finance is working through this, is to move that to 20% of the value of all contracts being dedicated towards social clauses. That was the requirement if the contract was to be won. Procuring services from social enterprises could be part of it, as well as providing apprenticeships and work opportunities for long-term unemployed people, along with social and environmental benefits. There was no prescriptive order to it, but we ensured the social enterprise sector created a directory of services to allow contractors to readily engage with those they needed to acquire services from to meet that 10% requirement, which, as I said, it is hoped will move to 20%.

That is not a legal requirement. Senator Craughwell made the point that these things appear to be guidance. What they need is the Cabinet's approval in order that they become a requirement for each Department. Guidance can be taken and ignored or played around with in terms of flexibilities in it. We took the procurement guidance notes to the Executive to get its imprimatur. That meant it was a requirement across all government departments and public bodies and not just guidance. There was also an opportunity for the awarding of preferred contracts to social enterprises to provide services, so that they alone were tendering for that particular service and to give them a preferred status.

There are opportunities for this review to go much further and to use some of the powers available to the Minister of State to make sure that, rather than just giving information to people to secure contracts, which is very important because you want to have a level playing field in that regard, to actually go much further and make it a requirement for others to secure contracts that they have social clauses attached.

There is also an opportunity, which is not discussed in the statement so much, relating to ethical procurement. The Government is a big buyer of goods and services, not only within the State, but from other parts of the world. I noted the statements yesterday of the Tánaiste and the Taoiseach and some statements this morning in this House regarding issues in the Middle East and some of the challenges they are presenting. However, there are issues across the world regarding exploitation of workers and resources. There is a responsibility on the Government, as one with ethical standards, to ensure those standards are translated into its buying power, to make sure ethical considerations become a part of public procurement, and that that, in turn, becomes a direction for all public bodies to make sure what the Government does filters down to everyone spending public funds and to make sure those ethical considerations are brought into play.

I look forward to seeing the paper - I know work on it was published in March - and to have an opportunity to engage further on it. I am sure that will be the case in both Houses. There are some very good ideas and a determination to get a centralised direction on all of this. There is much that can be done in terms of ethical procurement that can produce so much social good, not just for the people who live in this jurisdiction but for those across the world.

Alison Comyn (Fianna Fail)
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Senator Noonan is sharing time with Senator O'Reilly. Is that agreed? Agreed.

Malcolm Noonan (Green Party)
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I welcome the Minister of State. This probably is the first time we have had her with us formally so I wish her the best in her work ahead.

The OPW gave a tour of the biodiversity of Leinster House this afternoon, which is why I was late to this debate, so I apologise for that. It is the International Day for Biological Diversity. I will make points on that.

Before that, regarding points that have been well made by other Senators about the purchasing power of the State and how important it is that small local companies can have access, I note with interest reports from RTÉ on the purchase of make-up - it is probably an annual story for RTÉ - and Elizabeth Arden being bought from Amazon and big multinational companies. Small Irish companies should have an opportunity to bid for those contracts. It is hugely important, because that is revenue that is generated within the State, in that the State puts it forward, and it stays in the State within small and medium-sized enterprises in Ireland.

On the issue of green procurement, I did not hear the Minister of State’s opening statement, but this issue is critically important. I recall back in 2006 or 2007 trying to get low-carbon cement brought into local authorities as a default for public projects, and it was so onerous and difficult. I welcome the fact the Government is moving on green public procurement, ensuring embodied carbon is looked at, and ensuring FSC-certified timber and ethically produced and sourced timber are going to be a central part of this policy Government is bringing forward. What are also critically important are supply chains coming from countries where there are ethical and exploitation issues and where environmental degradation is a side result of exploitation materials. One thing we know for certain is that one of the greatest drivers of biodiversity loss is resource use, along with exploitation of forests and other materials. It is critically important the Irish Government and State has in place a robust procurement policy that pays heed to this and ensures everything we do and our purchasing power is used to good effect and that the money the State spends or local authorities or other public bodies spend is used to good effect and in a positive way.When you look at issues such as biodiversity net gain from public projects, these are really fantastic opportunities we can have where a very ethically led procurement policy could bring us in the right direction. We have obligations with respect to the UN Convention on Biological Diversity and international agreements we have made regarding biodiversity loss.

I look forward to the paper being brought forward and I hope we get an opportunity to discuss it at the climate and environment committee. That is an appropriate place to have it discussed, and I would welcome an opportunity to do that. I wish the Minister of State well with this important work ahead but this has to be a central tenet of the whole procurement policy the State develops.

Sarah O'Reilly (Aontú)
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I thank the Minister of State for coming here today. I was not really prepared to talk about this but I felt I had to because it is a very important subject. The public procurement process excludes local shops and small businesses and indigenous local businesses. I have sat on five or six school board meetings where this has always been an issue. The school cannot go locally to purchase things that are needed. The school may wish to go locally, so it has been a huge bone of contention on many of the school boards.

Going through the public procurement process is not always going to give good value to the taxpayer. For example, I was in a school where a lift broke down. It was serviced and needed a wearing part every year that cost about €30. The national organising body for the school put out a public procurement process to get tenders for maintenance of the lift, and a new provider won the contract. The new provider could not fix the lift that was easily fixable at €30 but the school could not buy this part itself or get somebody in to fit it because insurance would not stand over it and the new providers would not stand over it either. A new lift had to be put in for the sake of a €30 part. That is unfortunate and it should not really be happening.

I have another ridiculous example on the three quotes issue. If you have a theatre or Government organisation that is putting on a show or hiring a band or comedian, you have to get three quotes. Let us say you are getting Tommy Tiernan. You have to get three quotes for Tommy Tiernan, even though Tommy Tiernan is the only person who can quote for Tommy Tiernan, if the Minister of State knows what I mean. It is a little bit ridiculous in places.

People in local government, especially those working on the ground like municipal district managers, are in the process every day of trying to find solutions to problems and their hands are tied by the very strict guidelines they have to work around. We should come up with some ideas on how to help people on the ground resolve situations and get solutions in a fast and timely manner.

It is well known that to win contracts, people or organisations put forward keen prices, but it is the add-ons you have to watch out for. Lessons need to be learned from the national children's hospital and the ventilator and PPE scandals.

Alison Comyn (Fianna Fail)
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Before we take our next speaker, I welcome our group here. I am afraid I have not had time to find out who they are but they are always very welcome to come and join us for Seanad business. We are discussing statements on public procurement. I hope the group enjoys the next few minutes they are here with us.

Alice-Mary Higgins (Independent)
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I welcome the Minister of State, Deputy Higgins to the Seanad. Public procurement is a topic I have been very passionate about for a long time, and I thank the Minister of State for the kind comments in her own speech with regard to some of the work I have been doing, and some of the very positive engagement I have had with the Office of Government Procurement, including on my quality in public procurement legislation. I thank the Minister of State for her comments on that.

With regard to this very important new strategy, it is trying to encourage engagement and create excitement around the development of a new national public procurement strategy. Public procurement is one of the most powerful tools we have as a State. On the money spent, my figures were €12 billion in 2019 and it is obviously more than that now. We are looking at more than €100 billion. It was €120 billion, I believe, in the context of the national development plan. This is an extremely powerful lever within any economy, and within the Irish economy the Government is one of the main actors. It can have an extraordinarily significant impact, not just on one those who are awarded contracts or who will use and benefit from the goods the State is purchasing, but also by creating, setting and raising standards in the culture more widely.

There has been and tends to be a lot of focus in the media on examples of bad public procurement. We know that, when it goes wrong, there are very significant financial and personal costs. I will come to some of those which I specifically sought to address in my own legislation. The CervicalCheck scandal is one that jumps to mind because that was one where the Scally report identified the issue of contracts being awarded on a lowest cost only basis, and lowest cost being the priority factor in the awarding of contracts in that example.

When done well, public procurement has extraordinary impact in terms of social, environmental, economic and sustainable benefits for society. For too long, we have not really leveraged it. It is simply seen as how we buy the things, how we pay for the things and how the contracts go out rather than recognising it as the policy lever and the tool that it is. Sometimes we talk about how the EU rules will not let us do this or that. In fact, those EU directives are quite wide and offer quite a huge scope for action.

There are times when we should be doing less bundling, and sometimes operating smaller grant mechanisms at community levels is more appropriate. Sometimes debundled and local purchasing, when it comes to small and specific purchases, is actually more effective. When we look within the EU rules, recital 91 of the public procurement directive in 2014 states, "This Directive clarifies how the contracting authorities can contribute to the protection of the environment and the promotion of sustainable development, whilst ensuring that they can obtain the best value for money for their contracts." This is part of the original vision, even from the European Union, of how we are meant to be using it, and that is as a tool, in this case specifically with regard to the environment and sustainable development. That is why I really welcome that when the Minister of State talked about value for money, she did so in that wider frame. Value for money is not simply what is cheapest. It is not even what is cheapest and quickest. It is about sometimes asking what is the optimal use of our resources, human and financial, in terms of delivering on time, quality, value for money and the wider societal, economic and environmental benefits that can come from an act of procurement. That is what value for money is in a really meaningful sense.

The Minister of State will be aware of my Quality in Public Procurement (Contract Preparation and Award Criteria) Bill, which looked to that question of the options we were given by the European Union. There is a new debate on enhancing that social component in the next round of discussions on the new directives from Europe. On value for money, or "most economically advantageous tender" as it is worded there, there are options within it. There is lowest cost; price-quality ratio, where you look to what is the best balance and where a proposal is tested on both price and quality; and the life-cycle costing, which is very important in an environmental context, where we look at what the life-cycle cost is over a wider frame with respect to supply of materials, etc. My legislation, as the Minister of State will be aware, seeks to make price-quality ratio the default rather than lowest cost, which is still used for approximately one third of contracts in Ireland, so that the norm would be that we would always apply quality criteriaWe would also bring a more thoughtful approach. If we were not to do so, we would have to explain why we have not chosen to apply a price quality approach. One of the previous speakers referenced social clauses and other clauses attached to legislation. They are very important. It was a notable point that it is not enough to suggest it; we need to require it for it to really happen in terms of a culture shift. Similarly, we need a legislative push to ensure that culture shift relating to the quality and price quality approach. In the excellent green public procurement policy, which was developed under the previous Government, there is a recommendation for legislative measures relating to green public procurement. Individually when we look to those who are making the choices, it can often seem that the simplest quickest thing is the cheapest bid. There needs to be that culture shift whereby we still have the discretion whereby we are not attaching a social clause or environmental clause in terms of the points that Senator Murphy was making, or in terms of my Bill if we are not applying quality, we would explain why. We should think about quality or think about why we are not thinking about quality. That thought early on can develop huge benefits.

Some of the questions that should be thought about at the contract design point are: how we deliver social benefits and social values through procurement? How do we promote sustainability? How will it support or potentially damage the delivering of our climate targets? How will it work in terms of our objectives on the circular economy? These are all real policies that we have that we should further each time. How will it support the participation of SMEs? How will it support innovation? How will it support inclusion? There are simple things in the design of contracts. One example that has been given often is, rather than just looking at procuring playgrounds, if we procure playgrounds that are inclusive and support biodiversity, we get better playgrounds that work for everybody. This is one component of my legislation; the other legislation comes to big purchases or the once in a generation purchases. It provides for a minimum of 50% quality when it comes to purchases that are over the large thresholds. Sadly, an example of this is the children's hospital where only a 70% weighting was given to price and a 30% weighting given to quality, which meant the lowest bid automatically had the advantage, although we have seen, which is often the case, when lowest bids are successful, there are supplementary claims again and again in a drip-feed and the price escalates.

The Netherlands has been using a quality approach since 2016. It requires a social return relating to contracts. Officials there have found a 0.3% increase in costs at the design point when it comes to contracts. Most contracts are still at the lowest price but it just means that those who submit the lowest price also have proven themselves on quality and the returns in terms of benefits are multifold. They get far more for their expenditure.

It is important that SMEs and social enterprise are supported. We should maybe look to community wealth building initiatives. We have seen a strong initiative from Dublin City Council in terms of community wealth building as a core economic strategy. We also see the role of co-operatives.

There is an obligation on every public body to reflect human rights and equality in their public procurement. My legislation would look for the reporting relating to that. Before I came to the Chamber, I met with Colombian human rights river defenders, who have done extraordinary work in tackling illegal mining. That is why I was a little late for which I apologise. They secured constitutional measures in the Colombian courts that talked to the rights of the river and talked to the rights of communities in respect of illegal mining. It is important is that in our supply chains, those of us who are purchasing the gold from illegal mining for example is something we address. It is a reminder of how crucial the human rights component in public procurement is, especially at a time, worryingly, the EU has paused the implementation of the due diligence directive on supply chains. In our public procurement, we can raise the highest standards and we should.

Emer Higgins (Dublin Mid West, Fine Gael)
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I thank all the Senators who contributed to the debate. It is great to see such interest in this area. It is great to see so many ideas being put to the floor. I will address the comments. I off huge thanks to Senators Byrne, Davitt, Craughwell, Noonan, Murphy, O'Reilly and Higgins for their interest in this and their welcome comments. I have categorised the feedback I received on three key themes: SME access; suppliers, supply chains and engagement with suppliers; and the social, ethical and green impact. I might speak directly to some of Senator Higgins's contributions afterwards.

I am so keen to address the SME impact. I came from the Department of Enterprise, Trade and Employment to this Department and my own background is in business. I am keen to make sure that we give Irish SMEs the opportunity to win a slice of the business that government is doing. Billions of euros worth of business is done by government every year and it is important that SMEs get the opportunity to do that. We are building on that message through direct outreach to them. We have had a number of engagement events throughout the country. We had a Dublin regional event and a regional event in Cork, and we have a regional event in the Midlands happening with exactly that in mind.

It is great that Senator Cathal Byrne mentioned Kent Stainless steel. It is important that we showcase successful suppliers and people who are success stories. We have done this in the Office of Government Procurement with Green IT, for example, which a business based in County Kildare that won a substantial government contract and which as a result of that have been able to upscale and upskill its workforce. That is important. The vast majority of all local authorities have procurement officers. I recently met with the Dublin local authority procurement network, which consists of procurement officers for each of our four local authorities in Dublin. It would be fantastic to see that kind of collaboration happening on a regional basis with procurement officers because they are the link between the local authority, local enterprise office and often the local chamber of commerce when it comes to making sure businesses are sourcing locally. My own South Dublin Chamber of Commerce prides itself on the fact that every time we go to an event, they say that everything we see there and everything they have purchased has been sourced locally. That is important that we do that to support our local SMEs.

My Department is running its first ever event on 11 November to directly engage with both suppliers and buyers to make sure that we are hearing their feedback. Ultimately, what is most important is that SMEs now contribute to our consultation, which is still open, to make sure that we are getting their feedback. We can use that feedback to help shape Ireland's first ever national public procurement strategy. It is probably more important than ever from a supplier’s perspective. Senator Murphy mentioned Covid-19 and what happened in the post-pandemic era with the disruption of supply chains. In a world that we are talking about tariffs, it is even more important that we have secure supply chains and a lot of that comes down to local supply chains so that we are sourcing within in Ireland where we can and that ties in with the SME access perspective.

Senator Craughwell raised an example, as did Senator Murphy, relating to where they felt centralised sourcing did not work. We have a use it or explain why model if it does not work because a better, cheaper, higher quality fix can be found locally. People should tell us that because it is important. We have fantastic account managers in our OGP who are the relationship builders between Government and suppliers. If there is information that they should know that they might not be aware of and that should be in the mix, please do come and tell us; it is really important. Our sourcing teams do incredible work and are saving the State an awful lot of money by doing it. The social, ethical and green impact is an important issue. As Senator Noonan has rightly said, today is International Day for Biodiversity. I am pleased we will publish an updated policy on green public procurement shortly. That is a huge area of emphasis for us in government, and in the OGP. Ethical procurement is something we are really focused on. Not only are we focused on it but we are trained on it. All of our OGP staff have undergone training in ethical procurement. We are on the Chartered Institute of Procurement and Supply, CIPS, corporate ethical register and we have received that Kitemark to show that our people out there doing an awful lot of purchasing on behalf of the State are doing it in a way that they always have a mind to ethical procurement. That is something we can be proud of as a State.

From a social impact perspective, the EU directives do allow a bit of flexibility on this, which is important. When I spoke to public procurement officers on local authorities, they said they use that section of the directive regularly. Our Office of Government Procurement does it. We have had a number of events where we have not just sourced locally, but we have sourced ethically in terms of social impact and the companies we have chosen to cater our events by making sure that we are giving back to underemployed, disadvantaged areas and people with intellectual disabilities. We are always making sure that we are giving fair access to other companies and social enterprises.

Senator Conor Murphy spoke about the board that he chaired in the North. I assure him we have something similar here, namely the Public Procurement Advisory Council where we bring together specialists in this area from the private and public sector. We are really using their expertise to help shape the direction of public procurement in Ireland.

Senator Cathal Byrne mentioned the opportunity presented by the upcoming EU Presidency. Our sourcing teams are doing tremendous work in sourcing a lot of what Members will see regarding accommodation, the buses and the events that will be happening as part of the Presidency when Ireland holds it. It is quite likely that Ireland will be holding the pen during our Presidency when it comes to the EU review on procurement strategies. That will be a huge opportunity for us to have influence on that, which is going to be really positive.

I commended the support of Senator Higgins on the work of the OGP. The Senator recently hosted a webinar as well, which was really good. As she said, I am familiar with her Bill. She stated that when procurement goes wrong, we hear about it.. I absolutely agree with that. It is very much the case. When we hear these news stories that none of us is happy about, it is often because procurement is not done correctly or because tenders are not written correctly. That is where the OGP can provide some fantastic support, be that through our frameworks where we can support agencies or departments to purchase what they need, our policies, the likes of our eTenders platforms or guidance around how to write effective tenders because changing the tenders means moving the goalposts and that means changing the amount of money used. That is not what we want. We want a very transparent, very open, and very fair public procurement process in Ireland.

I would like to say a huge "Thank you" to the staff in the OGP, who have absolutely dedicated their careers to making sure that happens, and to improving things in this space. I am accompanied by two assistant secretaries from the OGP who effectively run our two divisions on policy and implementation. I also have Edwina Steele, one of our senior officials, with me as well. I offer huge thanks to Anne Stewart, David O’Sullivan, Edwina Steele and all of the staff in the OGP who are, day in and day out, working to save our State money and to deliver better value for money for our taxpayers.

Alison Comyn (Fianna Fail)
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I thank the Minister of State for her time in the Seanad today.

I welcome our special guests to the Visitors Gallery. They are guests of Deputy Hildegarde Naughton from Clarin College. Athenry. I welcome the students. I believe the group leader is Paul Casserly, so I probably have to address this to him. It is tradition in the Seanad that when we have a school group here, they have no homework for the rest of the week. Seeing as it is Thursday, that might extend into next week. I will leave that to his discretion. Thank you for visiting. We will hopefully see you again soon.

When is it proposed to sit again?

Cathal Byrne (Fine Gael)
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At 2.30 p.m. next Tuesday.

Alison Comyn (Fianna Fail)
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Is that agreed? Agreed.