Olwyn Enright (Laois-Offaly, Fine Gael)
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Question 234: To ask the Minister for Finance his views on whether the new public procurement contract gives appropriate recognition of and transfer and fair payment conditions; and if he will make a statement on the matter. [27363/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The Government in mid 2004 decided to reform construction procurement to help achieve greater cost certainty, better value for money and more cost effective delivery of public works projects. My Department, with the assistance of the Government Contracts Committee for Construction (GCCC), specialist legal drafters and external technical expertise, has now developed a suite of Standard Forms of Construction Contract.

The fundamental change in the new construction contracts is the re-balancing of risk to change from existing practice where the State bears a disproportionate level of risk to the situation where capital projects are tendered for by contractors on a fixed price lump sum basis to include identified and appropriate risks. The new draft contracts also require contractors to ensure that pay and conditions of employment comply with the law and are no less favourable than the terms of the Registered Employment Agreements for those employees to whom the agreements apply. The new draft contracts also include provisions which give some support to strengthening enforcement arrangements in the construction sector. More generally, the public procurement guidelines issued by my Department, require that all contracting authorities ensure that tenderers have regard to minimum pay and other legally binding industrial or sectoral agreements when preparing bids and that tender documents should have an appropriate reference to this.

My officials have had extensive and constructive consultations with the construction industry over the last year on the content of the contracts. During this process, there has been very significant movement on the part of the State to help meet the industry's concerns without compromising core policy in this area. Following a very useful exchange of views with representatives of the construction industry in early June, I am aware that there are a small number of outstanding concerns for the industry. It would not be appropriate for me to comment further on the details at this time. However, let me say that I have listened carefully to the industry's comments and views and I am currently reflecting on the points made with a view to finalising the contracts in the coming weeks.