David Cullinane (Waterford, Sinn Fein)
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144. To ask the Minister for Public Expenditure and Reform the number of breaches in public procurement rules as published by the Comptroller and Auditor General in public bodies from 2011 to date in 2017, by year, by public body, by public contract and by amount, in tabular form; and if he will make a statement on the matter. [10893/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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The data referred to by the Deputy is reported on by the Comptroller and Auditor General (C&AG) in a number of annual reports relating to the period in question.  Any such reports compiled by the C&AG are available in either published form or through their website.

Under Circular 40/02 - Public Procurement Guidelines, all procurement contracts which a Department proposes to award without a competitive process, which exceed €25,000 in value (exclusive of VAT), should be reviewed within the Department, preferably by the Internal Audit Unit or alternatively by an appropriate senior officer who is not part of the procurement process. Circular 40/02 was developed in consultation with the Comptroller and Auditor General, to obligate each Department to complete an Annual Report (signed off by the Accounting Officer) in respect of such contracts.

The State procures in the order of €12 billion in goods, works and service annually. Given the volume of expenditure, the procurement rules do allow for circumstances where it is not possible to carry out a full procurement procedure. These circumstances are provided for in the European Union and in most countries that have a developed procurement system. Currently, direct procurement without use of a competitive process is provided for under Article 32 of EU Directive 2014/24/EU.  This Article lists specific cases and circumstances where it is justifiable to award public contracts by a negotiated procedure without prior publication.  The cases listed in the Directive are not exhaustive and include the following:

- Where no tenders or suitable tenders have been submitted in response to an open procedure or a restricted procedure. (i.e. following a procedure)

- Where only a proprietary product will meet requirements. Examples might include parts for specialist equipment such as airplanes, ships, security equipment, or certain types of software licencing arrangements;

- Where an agent, licensee or franchise holder has sole rights to supply a service or product. In general, the OGP would recommend that the purchase of such products or services be avoided but it can be unavoidable.

- Where due to extreme emergency arising from events that are unforeseeable by the Contracting Authority a competitive process cannot be undertaken in the normal timeframe. Such circumstances should be relatively rare.  An example in this area would be where an immediate purchase must be made in order to avoid risk to persons, property or significant financial loss.

- where a change of supplier would oblige the contracting authority to acquire supplies having different technical characteristics which would result in incompatibility or disproportionate technical difficulties in operation and maintenance;

- For bargain purchases or purchases under advantageous conditions, e.g. liquidation sale, creditors' agreement, winding-up

- For supplies quoted and purchased on commodity exchanges

Such procurements do not constitute breaches of the public procurement rules.  The EU Directives recognises that there are situations and circumstances where direct procurement without a competitive process is both necessary and legitimate. 

Finally, I would point out that overall responsibility for ensuring compliance with all national and EU procurement rules and procedures rests with contracting or purchasing Departments and public agencies.

David Cullinane (Waterford, Sinn Fein)
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145. To ask the Minister for Public Expenditure and Reform the public procurement rules that are in place here; and if he will make a statement on the matter. [10894/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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Public Procurement is governed by EU and National rules and guidelines. The aim of these rules is to promote an open, competitive and non-discriminatory public procurement regime which delivers best value for money.  

The main EU Directives governing public procurement are Directive 2014/24/EU on public procurement in relation to goods, services and works and Directive 2014/25/EU which deals with procurement by entities operating in the water, energy, transport and  postal services sectors.  These Directives were transposed into Irish law by way of Statutory Instrument Nos. 284 and 286 of 2016 respectively.   

The EU Directives on public procurement require that 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. For works contracts the threshold is €5,225,000; for supplies and service contracts awarded by Government Departments the threshold is €135,000 and for the remainder of public bodies the threshold is €209,000. The threshold for supplies and service contracts of entities operating in utility sectors (water, energy, transport and postal) is €418,000.  For contracts below these thresholds, the general requirement is that they be advertised on the national public procurement website www.etenders.gov.ie or, depending on value, awarded on the basis of a competitive process of direct invitation to an adequate number of suitable suppliers.  In line with this, the following national rules apply to below EU threshold procurements:

- supplies or services costing less than €5,000 in value may be purchased on the basis of verbal quotes from one or more competing suppliers.

- contracts for supplies or services between €5,000 and €25,000 in value should be awarded on the basis of responses to specifications sent by fax or email to at least three suppliers or service providers.

- goods and general services with an expected value of €25,000 or more should be advertised on the eTenders website

It is the responsibility of each contracting authority to ensure that they comply with EU and national rules in relation to public procurement.  Template Request for Tender (RFT) and contract documents have been developed in conjunction with the Chief State Solicitor's Office and the Office of the Attorney General to assist contracting authorities involved in carrying out routine, non-bespoke and low to medium risk procurements.  These are available on the national public procurement website www.etenders.gov.ie.

David Cullinane (Waterford, Sinn Fein)
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146. To ask the Minister for Public Expenditure and Reform the sanctions and penalties that are in place for breaches of public procurement rules by Government bodies; and if he will make a statement on the matter. [10895/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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Public Procurement is governed by EU and National rules. The aim of these rules is to promote an open, competitive and non-discriminatory public procurement regime which delivers best value for money.

It is a matter for individual contracting authorities to ensure that their public procurement function is discharged in line with the standard accounting and procurement rules and procedures. Under Section 19 of the Comptroller and Auditor General (Amendment) Act, 1993, each Accounting Officer is personally responsible for the safeguarding of public funds and property under his or her control; for the regularity and propriety of all the transactions in each Appropriation Account bearing his or her signature; and for the efficiency and economy of administration in his or her Department.

It is the responsibility of the Government Departments and State Bodies to satisfy themselves that they adhere to the requirements for public procurement and to make the necessary arrangements to ensure that tender processes are carried out in an appropriate manner.  Accounting Officers in their 40/02 returns in this regard certify that appropriate national and EU procedures were followed and that the contract prices were fair and reasonable and represented best value for money.  The EU Directives recognises that there are situations and circumstances where direct procurement without a competitive process is both necessary and legitimate.  Such procurements while exceptional do not constitute breaches of the public procurement rules.

Compliance with financial management rules, including public procurement, is subject to scrutiny by the internal audit function of public bodies and to external audit by the Comptroller and Auditor General and further examination by the Public Accounts Committee.

The role of the Office of Government Procurement (OGP) is to ensure that public bodies are aware of their legal obligations from a national and EU perspective, so that they are in a position to understand the rules and procedures around public procurement.  The OGP provides guidance notes, documentation and a customer service function to support public bodies undertaking procurement directly themselves.  It is one of the aims of the OGP to promote standardisation of procedures and practices as a way of ensuring best practice in public procurement.  For example, standard template tender and contract documents have been developed by the OGP in conjunction with the Chief State Solicitor's Office and the Office of the Attorney General to assist contracting authorities involved in carrying out routine, non-bespoke and low to medium risk procurements.  These are available on the national public procurement website www.etenders.gov.ie.