Mary Lou McDonald (Dublin Central, Sinn Fein)
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25. To ask the Minister for Public Expenditure and Reform his plans to introduce stronger measures to prevent conflicts of interest, favouritism and corruption in public procurement contracts, in view of the impending requirements under the new EU rules agreed in January 2014. [42058/14]

Brendan Howlin (Wexford, Labour)
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The main purpose of the EU public procurement regime is to open up the market and to ensure the free movement of supplies, services and works within the EU having regard to Treaty of Rome principles including transparency, proportionality and equal treatment. This is the rationale that shapes the detailed rules (Directives) governing the regime.

Under existing public procurement rules, contracting authorities are required to ensure that staff involved in purchasing or placing contracts are familiar with the EU and national rules that apply in relation to public procurement.  In particular Article 45 of EU Directive 2004/18/EC requires contracting authorities to exclude from tendering any tenderers who have been convicted of various types or categories of offence, including corruption, fraud, money laundering, and participation in a criminal organisation. The Directive also includes various permissible grounds for exclusion at the contracting authority's discretion, including bankruptcy, criminal conviction (where not attracting mandatory exclusion), grave professional misconduct, serious misrepresentation, and non-payment of tax or social security by the economic operator.  These provisions been incorporated into Irish law under Regulation 53 of SI 329 and are reflected in the Model Tender and Contract Document which issued in 2011 and which cover the procurement of goods and general services. 

For works, goods and services contracts, these provisions are contained in the Instructions to Tenderers and conditions of contract, where the standard forms of contract are used.  These latter documents also require that any conflict of interest, or potential conflict of interest, on the part of a tenderer, individual employees, or agents or subcontractors of a tenderer to be fully disclosed to the Contracting Authority as soon as it becomes apparent.  This may result in elimination from a competition or termination of a contract. The provisions also prohibit gifts, consideration or commission of any kind as an inducement or reward in relation to the award or performance of any public sector contract.

In relation to buyers, employees in the public sector are required to adhere to ethical standards under the relevant legislation including the Ethics in Public Office Act 1995, the Standards in Public Office Act 2001 and the Prevention of Corruption Acts 1889 - 2005.  Public procurers involved in procurement are required, under these legislative instruments, to operate to the highest ethical standards in public office.  These requirements comply fully with the existing rules governing public procurement.

The new public Directives are generally similar to the existing rules with respect to exclusion, although with some additions.  For example the grounds for mandatory exclusion have been updated and expanded to include human trafficking, etc. Breach of tax or social security obligations by the economic operator, established by "final and binding judicial or administrative finding" is now to be a mandatory exclusion ground, rather than discretionary. The permissible / discretionary grounds for exclusion are also extended compared with the current rules, to cover cases where: an economic operator has entered agreements aimed at distorting competition. 

The Office of Government Procurement is currently exploring policy choices as part of the transposition process.  In this context, on Friday last, 31st October, I launched a public consultation on the new Directives.  The document is available on the OGP website and written submissions are invited from stakeholders and interested parties on the issues raised in the consultation document by 12th December, 2014.  Consideration will be given to the responses received when drafting the Statutory Instruments to implement the EU rules into national law.

On foot of responses received from the public consultation and ongoing discussions with the Attorney General's Office, consideration will be given to any further appropriate measures for contracting authorities to take to prevent, identify and remedy conflicts of interest arising in the conduct of the procurement process. Issues around prior involvement of candidate or tenderers within the meaning of article 41 of the new Directive will also be considered.

If the Deputy has any concerns or information regarding potential ethical breaches, I would encourage you to raise the matter with the relevant contracting authority or enforcement body.