Denis Naughten (Roscommon-South Leitrim, Independent)
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120. To ask the Minister for Public Expenditure and Reform if a local authority can include as part of its agreement with a contractor a formal requirement for the company or developer to recruit a percentage of its staff within the local authority area; and if he will make a statement on the matter. [7280/14]

Denis Naughten (Roscommon-South Leitrim, Independent)
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127. To ask the Minister for Public Expenditure and Reform if a public body can as part of its procurement process include a formal requirement for the company or developer to commit to try and recruit and procure services within a local area; and if he will make a statement on the matter. [7281/14]

Brendan Howlin (Wexford, Labour)
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I propose to take Questions Nos. 120 and 127 together.

Under EU rules on public procurement public works, supplies and service contracts above certain thresholds must be advertised on the Official Journal of the EU and awarded on the basis of objective and non-restrictive criteria. The aim of these rules is to promote an open, competitive and non-discriminatory public procurement regime which delivers best value for money. It would be a breach of these rules for a public body to favour or discriminate against particular candidates and there are legal remedies which may be used against any public body infringing these rules. Requiring a company either foreign or domestic to employ a person or purchase goods or services from a specific geographical location would be against European Procurement rules and EU Treaty principles in relation to trade and the free movement of labour.

The European Commission has issued guidance on this issue which stressed that when incorporating social considerations into the procurement process one of the key challenges is ensuring compliance with the EU Treaty Principles and the Procurement Directives. EU rules primarily envisage that social considerations may be included as contract performance conditions, provided they are not discriminatory and are included in the tender notice or contract documentation and relate to the performance of the contract. For example, EU rules state that contract performance conditions may, in certain circumstances, be intended to favour on-site vocational training; the employment of people experiencing particular difficulty in achieving integration; or, the protection of the environment. In such cases this type of clause would have a relatively narrow application.

In terms of impact, challenges arise from the need to ensure that:

- value for money is not adversely affected;

- additional costs are not placed on domestic suppliers relative to other potential suppliers (making indigenous suppliers less competitive and therefore be damaging in the long run);

- displacement is avoided (such a policy could adversely impact those currently employed); and,

- the targeted benefit is capable of being measured and monitored during execution of the contract.