Peadar Tóibín (Meath West, Sinn Fein)
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35. To ask the Minister for Public Expenditure and Reform if he will provide the provisions in public procurement contracts that preclude contractors from engaging in exploitative work practices. [42061/14]

Brendan Howlin (Wexford, Labour)
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Public procurement procedures require all applicants to meet certain standards when applying for public contracts.  There are requirements placed upon contractors at each stage of the procurement process.

In this regard, at tender stage, applicants must sign a declaration in relation to their financial standing, their legal standing, their payment of taxes and social contributions; and a statement that none of the circumstances for exclusion apply.  The criteria upon which contracting authorities may exclude applicants from the award procedure of public contracts are set out in public procurement regulations and directives.  Before an applicant, in relation to certain breaches is excluded, the applicant may make a case and provide supporting evidence as to why it should not be excluded.  The contracting authority must consider this evidence before deciding whether to exclude or include an applicant.

In order to be considered for the award of contracts, whether works contracts for construction or service contracts for design team members, applicants must pre-qualify by meeting criteria which are designed to assess their competence.  Those who do not meet minimum criteria are excluded from further participation in a tender competition. 

At award stage, it is a condition of award of public contracts (above €10,000) that the successful applicant provides to a contracting authority either a current Tax Clearance Certificate or demonstrate a satisfactory level of subcontractor tax compliance in the case of the construction, forestry or meat processing sectors, who are subject to Relevant Contracts Tax (RCT).  The same tax clearance requirement applies to any non-resident contractor being awarded a public contract.

At implementation stage, the obligations under the contract take effect.  Clause 2 of the standard form of the public works contracts requires the contractor, his personnel and sub-contractors to comply with all legal requirements.  There is a substantial body of legislation that directly or indirectly governs construction activities, however two key pieces of industry specific legislation; the Safety, Health and Welfare at Work (Construction) Regulations 2013 and the Building Control Regulations 1997-2014 both place considerable responsibility not only on contractors but on all those involved in construction projects including designers, supervisors and individual workers. 

The ultimate sanction for serious breach of health and safety regulations is a criminal conviction and imprisonment. Compliance with health and safety regulations is separately assessed in a pre-qualification of a works contractor with supporting evidence required to demonstrate the applicant possesses sufficient resources and is competent to carry out the proposed works.  The Works Requirements which are a key part of the contract documents also set out detailed specifications on how regulatory standards are to be met.

Contractors are required to submit on-going certification under Clause 5.3 (Pay and Conditions of Employment) of the contract that they have complied in full with the requirements of that clause which covers aspects such as compliance with employment law, and deductions for social welfare.  Contractors are also required under this Clause to maintain records and timesheets in respect of all those engaged on the works. 

The management of the tendering process for a public contract is a matter for each contracting authority.  It is the responsibility of each contracting authority to ensure that tenderers comply with all the requirements of the process.  The contracting authority has the right to: audit specified documents; to withhold payment or part thereof if certification is not provided; deduct from payment if certification is proven to be incorrect; and has the right to terminate the agreement where the contractor fails to remedy the situation.

Enforcement of employment law is a matter for my colleague the Minister for Jobs, Enterprise and Innovation. The National Employment Rights Authority (NERA) have the necessary powers to compel employers to provide the documentary evidence to establish whether they may have breached employment law.  Contracting authorities should report any concerns they may have on compliance with employment law, tax and social welfare payments during the course of a project to the appropriate statutory bodies, such as NERA, the Revenue Commissioners, Social Protection, etc.