Bernard Durkan (Kildare North, Fine Gael)
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196. To ask the Minister for Public Expenditure and Reform the extent to which his Department continues to monitor the progress of Government contracts, with particular reference to the need to ensure any progress of a positive nature continues; and if he will make a statement on the matter. [21594/22]

Bernard Durkan (Kildare North, Fine Gael)
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197. To ask the Minister for Public Expenditure and Reform the extent to which delays in public procurement are currently contributing to rising costs; and if he will make a statement on the matter. [21595/22]

Michael McGrath (Cork South Central, Fianna Fail)
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I propose to take Questions Nos. 196 and 197 together.

Under EU law, public contracts above a certain value must be advertised EU-wide and awarded to the most competitive tender in an open and objective process to promote an open, competitive and non-discriminatory public procurement regime which delivers best value for money.   All Irish public bodies are obliged to spend public funds with care, and to ensure that optimal value for money is obtained in accordance with the Public Spending Code which sets out the rules and procedures to ensure that these standards are upheld across the Irish public service. 

Each Accounting Officer is responsible for the monitoring of performance of public contracts under his or her remit and for ensuring that the public procurement function is discharged in line with standard accounting and procurement rules and procedures efficiently and effectively to deliver maximum value for money for the taxpayer.  Contracting authorities are responsible for establishing arrangements for ensuring the proper conduct of their affairs, including conformance to standards of good governance and accountability with regard to procurement.   

The Office of Government Procurement (OGP), an office within my Department, has responsibility for the National Public Procurement Policy Framework which sets the overarching policy framework for public procurement in Ireland. This framework enables a more consistent approach to public procurement across the public sector.  The OGP has published the Public Procurement Guidelines for Goods and Services on its website www.gov.ie/en/publication/c23f5-public-procurement-guidelines-for-goods-and-services/ to provide a comprehensive interpretation of the public procurement regulations. The guidelines are designed to improve consistency and promote best practice in the application of the public procurement rules to deliver best value for money.  There is a section specifically dedicated to managing contracts contained within the guidelines which outlines the importance of active management by contracting authorities of contracts to maximise value for money. 

With regard to the time required to administer the procurement process, for contracts above the EU thresholds, minimum time-limits are set down for the different stages of the particular contract award procedure chosen in the 2016 Regulations. Under the 2016 Regulations, the statutory minimum time limits by which suppliers have to respond to advertised procurements and submit tender documents have been reduced by approximately one third when compared with the previous rules. This flexibility speeds up simpler or off-the-shelf procurements, but still permits longer timescales for requirements where tenderers need more time to provide detailed responses. The time limits in the 2016 Regulations are minimum time limits and contracting authorities should take  into account the complexity of the tender and the volume or complexity of information that the tenderers are required to submit when setting any time limits.  The timelines for the different procurement procedures can be found in Appendix V of the above mentioned Procurement Guidelines. 

Currently inflation is being driven by external global factors which is impacting all sectors of the economy.  As the rate of inflation remains elevated, prices are likely to rise.  This is particularly significant in a contract which operates for a number of years. The impact of inflation over the duration of the contract must be taken into account if the contract is to be successfully delivered.  Whether that risk is borne by the supplier or the contracting authority or shared between them is determined by the conditions of contract. 

In recognition of the volatility in the price of construction materials and being mindful of the impact that may have on the delivery of the NDP, in particular the capacity of contractors to bear the risk of inflation, I introduced amendments to the Public Works Contracts in January 2022 that are aimed at sharing the risk of materials price inflation. These measures include:

- Limited indexation of the tender price to cover price increases to materials in the period between the submission of the tender and the award of the contract;

- A reduction in the fixed price period once the contract has been awarded to 24 months;

- Provision for the contractor to seek an adjustment to their price once the contract has been awarded should the price of a particular material when purchased increase by more than 15% on its price at the time the contract was awarded; and 

- Provision for the public body to seek a reduction in the price where the price of a particular material reduces by more than 15% from the date the contract has been awarded has also been introduced.   

Finally, to assist contracting authorities in their procurement of common goods and services and to get value for money promptly, efficiently and without delay, contracting authorities are encouraged to check the Office of Government Procurement website for existing or planned procurement arrangements which may meet their needs.