John Brady (Wicklow, Sinn Fein)
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361. To ask the Minister for Social Protection the amount the JobPath programme has cost to date, including the entire tendering process, the use of economic research specialists and legal costs; the amount the programme will cost the tax payer by the end of the four-five year cycle; if there are any breaks or penalty clauses if the Government decides on the early termination of the contract; and if he will make a statement on the matter. [17704/17]

Leo Varadkar (Dublin West, Fine Gael)
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JobPath is a payment by results model which means that companies will not be able to fully recover their cost until they place sufficient numbers of jobseekers into sustainable jobs. Therefore the overall cost of JobPath will be determined by the number of people who participate in the programme and the number who get sustainable jobs.

The payments made are in respect of registration fees, paid for clients who have engaged with the service, and fees paid for sustained employment outcomes of 13, 26, 39 and 52 weeks duration. The total amount paid in fees from the outset of the service in July 2015 up to the end of February 2017 is €37.6m.

The procurement process and the attendant costs and legal costs form part of my department’s normal business and as such would be included in the overall procurement budget.

In advance of developing the service the Department retained the services of the non-profit Centre for Economic and Social Inclusion (London) to advise on the JobPath model and the procurement process.

The Minister may terminate a JobPath contract by serving six months written notice on the contractor. In the event that the Agreement is terminated a payment will be made to the Contractor, the amount to be determined by the Contracting Authority, in respect of unavoidable losses which have been actually and reasonably incurred by the Contractor as a direct result of the early termination of the contract.

The Department also has the right to initiate reviews of the terms of the contract (including fees) in the event that contractor performance (including profitability of the contractor) provide reasonable cause for consideration of such a review.

I trust this clarifies the matters for the Deputy.

John Brady (Wicklow, Sinn Fein)
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362. To ask the Minister for Social Protection the rationale for the basic requirement to be considered eligible to bid for JobPath that a company had a minimum turnover of €20 million per year, which excluded many local companies and voluntary organisations from the scheme; and if he will make a statement on the matter. [17705/17]

Leo Varadkar (Dublin West, Fine Gael)
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The Pathways to Work initiative launched in 2012 signalled the potential of contracting with third party providers to complement the existing capacity of the Department of Social Protection and that already provided on behalf of the department by Local Employment Service providers, to deliver employment services. The additional capacity was and is essential, to facilitate meaningful engagement with all those who are unemployed – in particular the long-term unemployed (who need more intensive levels of engagement).

Given the nature of the resourcing requirement, that contracted service provision is common practice in EU/OECD countries and given that the use of contracted service provision was suggested by the NESC and OECD, among others, and given the constraints on Exchequer finances, it was concluded that a contracted, payment by results model, was the most appropriate approach.

In November 2012, following a public procurement competition, the Centre for Economic and Social Inclusion (‘CESI’ a UK based leading not-for-profit company dedicated to tackling disadvantage and promoting social inclusion in the labour market) was appointed to provide the Department with expert advice and assistance relating to the design and delivery of an employment service model (“JobPath”)

Based on its knowledge of the operation of contracted employment services in other States, CESI provided advice with regard to the design of the JobPath model including detailed financial modelling of a payment by results approach in Ireland.

The JobPath contract model was designed over an extended period taking account of advice from Irish and international experts on contracting of employment services and inputs received following a number of public stakeholder consultations/briefings.

On 12 December 2013, the Department published a contract notice inviting tenders for the provision of JobPath services. The Tender documentation was published on www.etenders.gov.ie while information on JobPath was published and continues to be available on www.welfare.ie.

The Request for Tenders (RFT) details all aspects of the JobPath Service, including the fact that it is intended to function as a payment by results model. This means that all initial outlay expenditure, such as costs of premises, staff recruitment and training, etc. are borne by the provider companies.

The RFT advised that the successful tenderers must have the ability to satisfy the Service Contract requirements in terms of scale and duration, and were therefore required to demonstrate a cash generation sufficient to undertake the provision of the JobPath Service, and be in a sufficiently robust position to service debt obligations and contingencies or other liabilities which may arise over the term of the Agreement. Potential tenderers were advised that they may rely on the financial resources of other entities for the purposes of demonstrating their economic and financial standing, but they must demonstrate that they had the capacity to raise the finance required to deliver the service.

In line with Government policy, participation by Small and Medium Enterprises (SMEs) in the procurement exercise was specifically referenced in the introduction to the RFT. Per paragraph 1.5 on page 5 of the RFT it is stated that SMEs who believed that the scope of the procurement was beyond their technical or business capacity were encouraged to explore the possibilities of forming relationships with other SMEs or with larger enterprises. Through such relationships they would be enabled to participate in and contribute to the successful implementation of any contracts, agreements or arrangements arising from the competition. In addition, larger enterprises were also encouraged to consider the practical ways that SMEs could be involved in their proposals to maximise the social and economic benefits of the contracts resulting from this particular public procurement competition.

The RFT did not, therefore, preclude the submission of tenders by any company, or amalgamation of companies, and it is not the case that the intention was to award contracts exclusively to large private companies.

Contracts were awarded on the basis of the most economically advantageous tender based on the following criteria (i) cost, (ii) implementation of services, (iii) delivery of services and (iv) contract management and governance. Full details of the JobPath procurement requirements and evaluation criteria used during the tender process are set out in the “Request for Tenders for the Provision of Employment Services (JobPath)”, which is available on the Department’s website at www.welfare.ie/en/Pages/JobPath.aspx.

It should be noted that the two companies can and do engaged with a range of other companies for the provision of various services and they employ some 600 people either themselves or through sub-contracted relationships.

Finally as in previous years, for 2017 the department has contracts in place with in excess of 60 companies for the provision of the Local Employment Service (LES) and Job Clubs. In addition, the Department also contracts with other companies for the delivery of community employment schemes and community service programmes. The Department therefore has and continues to have contracts for the provision of services with a wide variety of organisations.

I hope this clarifies the matter for the Deputy.