Catherine Murphy (Kildare North, Social Democrats)
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340. To ask the Minister for Finance if his attention has been drawn to a disclosure by NAMA of non-competitive procurement in 2016 to the value of €3.5 million; if his attention has been further drawn to other similar disclosures by NAMA or the NTMA; and if he will make a statement on the matter. [28947/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy will be aware, under the revised Code of Practice for Governance of State Bodies ("the Code"), each State Body is required to report non competitive procurements in the Chairperson’s comprehensive report to the Minister. The NAMA Chairman submitted his comprehensive report in conjunction with the NAMA Annual Report for 2016, as required by the Code.

I would point out that the information cited in the Deputy’s Questions is publicly available in NAMA’s Statement of Internal Control, which is contained in NAMA's 2016 Annual Report (pgs.68-69).  NAMA's 2016 Annual Report was published on 1 June 2017 and is available via: .

NAMA submits the NAMA Annual Report to the Minister for Finance who in turn provides the Annual Report to Government for information prior to its publication.  This allows the Minister for Finance, his officials and members of Government to familiarise themselves with the detail of the report as it enters the public domain.  NAMA's 2016 Annual Report was submitted and published in line with this established practice. Though NAMA's 2016 Annual Report was published prior to me taking office, NAMA made this disclosure in the ordinary course through the NAMA 2016 Annual Report, which was brought to the attention of the Minister for Finance as required.

The NAMA Chief Executive Officer approved derogations from NAMA's procurement policy to a total contract value of €3.5m in 2016 (2015: €3.4m).  Of this total, €2.3m relates to derogations where existing procurement framework panels, previously established by tender with established hourly rates, were already in place.  In such cases a service provider was directly appointed from the existing framework panel without a mini-tender process (2015: €1.9m).  The remaining derogations totaling €1.2m (2015: €1.5m) relate to the direct appointment of service providers where no such panels were in place and are each permitted exceptions under the NAMA Procurement Policy.

I welcome the significant detail regarding these derogations provided in NAMA's Statement of Internal Control.  NAMA advise that the rationale for any derogation is considered and approved by the Chief Executive Officer and reported to the Finance and Operating Committee.  Derogations over a certain value are also approved by the Board.  A breakdown of procurement policy derogations is provided within the Statement of Internal Control on page 69 of NAMA’s 2016 Annual Report.

More generally, NAMA has an established and Board approved Procurement Policy and Procurement Guidance and Procedures based on relevant procurement legislation and best practice.  NAMA adheres to these aforementioned policies and procedures in undertaking all procurement activity.  

It is important to note that the use of derogations does not amount to non-compliance with NAMA’s procurement policy as derogations are permitted in certain circumstances.  Given that NAMA operates in a commercial environment and must maintain its commercial competitiveness, NAMA allow for alternative processes which seek to provide optimum value for money from its procurements while taking account of a number of other factors including, inter alia, efficiencies gained from the use of panels, confidentiality, conflicts of interest and timelines for delivery of services. In certain instances, as provided for in NAMA’s Procurement Policy, it is deemed appropriate to obtain duly authorised derogations from NAMA’s procurement policy  for highly sensitive, confidential matters, where there are conflicts of interest issues, for expediency or where the service providers have prior existing knowledge of the debtor/asset (the latter of which can result in cost saving benefits).

Separately, I expect the NTMA to publish the NTMA 2016 Annual Report in the coming weeks.