Bernard Durkan (Kildare North, Fine Gael)
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192. To ask the Minister for Public Expenditure and Reform the extent to which he has examined public procurement procedures with a view to identifying potential snags in the process and putting place measures to address this; and if he will make a statement on the matter. [2858/22]

Michael McGrath (Cork South Central, Fianna Fail)
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Public Procurement in Ireland is governed by EU and National Rules. The National Public Procurement Policy Framework (NPPPF) sets out the overarching policy which consists of five strands:

1. Legislation (Directives, Regulations)

2. Government Policy (Circulars etc.)

3. Capital Works Management Framework for Public Works and Construction related Services

4. General Procurement Guidelines for Goods and Services

5. More detailed technical guidelines, template documentation and information notes as issued periodically by the Policy Unit of the Office of Government Procurement (OGP)

To create a level playing field for all businesses across Europe, EU law sets out minimum harmonised public procurement rules. These rules govern the way public authorities and certain utility operators purchase goods, works and services. The rules are set out in three principal EU Directives which are transposed into national legislation and apply to tenders for public contracts whose monetary value exceeds certain thresholds. For tenders of lower value, national rules apply, which must also respect the general principles of EU law.

All public works projects that are delivered under the Exchequer-funded element of the Government's capital plan must be procured in accordance with the provisions laid down in the Capital Works Management Framework (CWMF).  The CWMF is a structure that has been developed to deliver the Government’s objectives in relation to public sector construction procurement reform. It consists of a suite of best practice guidance, standard contracts, generic template documents and procedures that cover all aspects of the delivery process of a public works project from inception to final project delivery and review to assist contracting authorities in meeting their procurement requirements.

A review of the CWMF commenced in March 2019 and is ongoing. The focus of the review is on improving the delivery of construction projects in terms of quality, timely delivery and cost outcomes. The Review process involves extensive engagement both with industry and public bodies charged with the delivery of public works projects on a broad range of issues including the deployment of digital technologies, enhanced risk management and information management for public bodies, contractors and consultants.

To mitigate the impact of the necessary public health measures on the delivery of projects under the NDP, a series of COVID-19 notes were published during the period March 2020 to July 2021.  These included guidance notes, supplemental agreements for site closures and ex-gratia scheme, and a COVID-19 Mandatory Closure clause in Public Works Contracts.

Engagement with the insurance sector and construction industry stakeholders has also taken place on issues relating to cost increases on Professional Indemnity Insurance premiums and the reduction in cover available.  Amendments to CWMF documents and additional guidance will be published shortly.

Significant increases in construction material costs is impacting live tenders and contracts. Interim measures to address the impact of the cost increases on Public Works Projects have been introduced. Procurement guidance for ‘live’ tenders was published in November 2021. Interim amendments to the provisions in the public works contracts were published in January 2022. 

Together these reform processes will lead to meaningful policy change and will assist in delivering better value for money for the taxpayer in the implementation of Project Ireland 2040.

The NPPPF also supports contracting authorities when awarding contracts for goods and services, including the Office of Government Procurement, four key sectors (Health, Education, Local Government and Defence), individual Departments, Offices, commercial and non-commercial State bodies, and private entities which are subsidised 50% or more by a public body,  and facilitates compliance with EU and National Procurement Rules.  

My officials are currently finalising a review of the Procurement Guidelines for Goods and Service which were last updated in 2019 to take account of new developments in the area of procurement and clarification of some aspects of the Guidelines. In addition, an updated Brexit Information Note was published in July 2021 and an updated COVID Information Note was published in September 2021.

Work has been undertaken by the OGP to ensure that the opportunity to compete in public procurement is accessible by all businesses, including SMEs. Specifically, the OGP has developed a suite of policy measures aimed at assisting SMEs to access public procurement opportunities (implemented through Circular 10/2014: Initiatives to assist SMEs in public procurement). These include:

- Proportionate financial capacity criterion (turnover requirements limited to twice the contract value);

- Contracting authorities are encouraged to divide public contracts into lots;

- Provision for “consortia bidding” to assist SMEs to participate in procurement procedures where they would not have the relevant capability or scale;

- Proportionate insurance levels; and

- Public bodies are required to advertise contracts for goods and services valued above €25,000 on the national eTenders portal.

The SME Advisory Group meets quarterly and ensures that the voice of Irish SMEs (through the industry representative bodies ISME, IBEC, SFA, Chambers Ireland, and CIF) is heard by Government. Furthermore, the OGP operates the Tender Advisory Service, an informal service provided free of charge, to facilitate suppliers to raise concerns in relation to live tender processes. 

My Department will continue to proactively review the National Public Procurement Policy Framework periodically, update as appropriate and communicate changes to relevant stakeholders.