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Dáil Éireann debate -
Thursday, 25 Mar 1954

Vol. 145 No. 2

Adjournment Debate—Government Advertising Contract.

On the motion for the adjournment Deputy Briscoe gave notice that he would raise the subject matter of Question No. 7 on the Order Paper to-day. This is the usual adjournment.

I take it that I can go on for 20 minutes?

Can I go longer than that to-night?

The Deputy has only the same time as for the ordinary adjournment debate.

I thought I could go on until half-past ten to-night.

The question, No. 7 on to-day's Order Paper which I had better read, was:—

"To ask the Minister for Finance if he is aware that the Stationery Office advertising contract has been transferred from the contractor who has held it for over 30 years to a new advertising agency; and, if so, if he will state by whom the contract was placed and, if the transfer was made on the basis of a lower tender, whether the difference was such as to justify a change from the former contractor who has handled the business for 30 years and built up and maintained a highly specialised organisation specially to service this account and if he will further state whether the new contractor has given an assurance that he will hand back to the Stationery Office the whole or any part of the commission which would normally be paid to him by the papers carrying Government advertisements and, in this event, what assurance he has had that the new contractor will be in a position to fulfil this undertaking."

The Minister in his reply said:—

"I am aware that on the recent termination of the contract for an agency for Government advertising in newspapers and periodicals the new contract was placed with a firm other than the firm which had previously held it. The contract was placed by the Controller of the Stationery Office with the prior approval of the Government Contracts Committee. In the light of assurances sought from and given by the successful tenderer, it appeared to the Stationery Office and the Government Contracts Committee that this tender would be substantially more advantageous to the State than that of any other effective tenderer."

At the outset, I want to say that there is a certain amount of criticism of the manner in which this particular transaction has been carried out. I have stated that this firm held this particular business for 30 years—for 30 years and eight months to be precise —and during the whole period of the carrying out of their operations on behalf of the Departments of State concerned, they never received one penny by way of fee. I want to say, first of all, that since raising this question, I have been able to get certain information. I should like the Minister to consider how this contract was first of all terminated. At the end of the 12 months' period the firm was asked to carry on operations for another month and the firm did so. There was a letter written to them on the 5th February from the Controller of the Stationery Office, in the following terms:—

"I beg to refer to my telephone conversation with the principal of the firm"—

I am not mentioning the name—

"—on the 1st January, 1954, regarding the contract for Government advertising in newspapers and periodicals and to inform you that it has been decided to extend the existing contract for a further period of one month."

Then on the 1st March—it is dated 1st March but the envelope shows that it was posted on March 2nd—the following further communication was received by the firm:—

"I beg to refer to your tender of 4th December, 1953, for the agency for Government advertising in newspapers and periodicals and to inform you that it has not been found possible to place the contract with you and accordingly the existing contract with your company will terminate on 6th March."

Three and a half days' notice to a firm that has carried out Government business for 30 years! They say this also in the letter:—

"I should like to take this opportunity to express the thanks of this office for the courteous and helpful manner in which you have carried out this contract in the past."

I asked in the question to-day what assurances were given or what advantages the new contractor was able to give over the old one. The Minister has stated that the matter did not come before him, that there was this contracts committee set up so that a contractor tenders for Government requirements through this committee. The idea is that there is not supposed to be any political influence and that the State is able to get the very best for its money. Deputy Corish to-day, by way of a supplementary question, asked whether the assurances to which the Minister referred were included in the contract. I want to add to that: if they are not included in the contract are they legally enforceable? If a tender form is sent out to other people to send in their quotations, is it now to be taken that over and above what is specified in the tender form, there may be a certain understanding and that a person who tenders can have a private understanding with a particular Department of State to give the State some extra benefit not made known to others who are tendering? That is the first question I should like to ask.

I have here before me a document which was presented to all agencies of this kind by the newspaper offices in 1927. The Irish Press was not then in existence but the other papers—the Evening Mail, the Independent newspaper and the Irish Times issued a notice stating that these papers

"require that from this date, June, 1927, advertising agents shall not under any condition whatever split the commission or discount allowed by these papers on advertisement orders and that such advertising agents shall not make any rebate either in cash or materials which would result in an advertiser paying a lower figure than that actually charged by these newspapers. Further, that each agent having furnished a list of the contracts involving allowance of rebate or discount at present held by him, shall undertake that on the expiration of such contracts, such allowance shall be immediately discontinued.

Running contracts—contracts indefinite in regard to period of time must be determined at the end of six months from this date.

Any advertising agent who fails to comply with these requirements shall be removed by these newspapers from the list of recognised agents and no longer receive the privileges now accorded them."

There is a space then for a signature prefaced by the following paragraph:—

"We herewith supply the required list of contracts with dates of expiration and hereby agree to the terms set out in this memorandum."

This was in 1927, and the particular contractor who ran that business for 30 years and who was then the contractor refused to sign this document. The company were presented on the 23rd November, 1932, with a letter from the Dublin Newspapers Managers' Committee which read:—

"I am instructed by the Dublin Newspapers Managers' Committee to inform you that unless you immediately sign the agreement of June, 1927 (which stipulates that advertising agents shall not under any condition whatever split the commission or discount allowed by these newspapers on advertisement orders, or make any rebate either in cash or materials which would result in an advertiser paying a lower figure than that actually charged by these newspapers) you will cease to be recognised as an advertising agent by any of the newspapers represented on my committee.

Under these conditions all discounts hitherto allowed you as advertising agents will be discontinued as and from the 31st December, 1932."

Now it would appear from that, that all advertising agents entered into this form of agreement so that they cannot possibly give an undertaking that they will remit to a Government Department, part or the whole of the commission which they receive, because if they do they will not be in a position to carry out their contract. There is this honourable firm that has been for so long dealing with this matter and they wrote on the 4th December as they had written in previous years:—

"We enclose our tender for the Government advertising contract, period January, 1954, to December, 1956. We also enclose a list marked `A' of provincial papers who are not members of Associated Irish Newspapers, together with a list of miscellaneous publications who may receive Government advertising from time to time. None of these publications on list `A' have intimated their intention to present a `Split Commission' agreement to advertising agencies, nor have the Cork Examiner group of papers. Consequently the full commission on all advertising placed with these publications would become the property of the Stationery Office.

The position with regard to the `Split Commission' agreement remains the same as it was in 1951."

Now, Sir, that means that this concern, which previously handled this business, undertook to pay, and did in fact pay, over to the Government Department every penny of commission which they received from the papers not in this organisation and which disagreed with this method. They were satisfied with what they earned as commission on other business from papers over and above those contained in this list which I do not propose to read. Then a new firm comes along which was established in the year 1946. There appears to be something very peculiar in the fact that this new firm now holds advertising contracts from Aer Lingus, An Tóstal, C.I.E., and I believe from Fogra Fáilte. That for a firm that started in 1946 is not bad progress. If there is going to be some underhand method—and I use that phrase deliberately—by which these people will be able to monopolise Government advertising, there is no guarantee that they will be able to fulfil a great part of it, if the other papers carry out the threat implied in the giving of that undertaking to each other and to all advertising agencies.

There is a section, Section 18, in the contract which I have seen which provides for the signing of a bond, if necessary. The firm which had this business previously was always willing to enter into a bond, if called upon, but they were never so requested. I take it that one of the answers which the Minister may give the House as a result of information given to him is that this new firm is signing a bond. The other firm was never requested to do so—its reputation and its behaviour were such that the Departments dealing with it never thought it necessary to ask that a bond be signed.

What has been the reaction generally? I do not intend to bore the House with a lot of material, but I will read one letter which I think is very important, because the public are beginning to think that this decision is the decision of a political Party, when, in fact, it is the decision of a group of civil servants who did not pay the Minister the courtesy of consulting him, as the Minister pointed out when he said to-day that he had not been consulted in this matter. Independent newspapers wrote this firm on 4th March as follows:—

"I have learned with deep regret that you will soon relinquish acting as Government advertising agent after all these years.

I should like to say, having been privileged to claim your personal friendship apart altogether from our business association..."

I want the Minister to mark these words:—

"...that it will be difficult to find anyone who will give a finer service or act with greater rectitude in his dealings with Government and newspapers.

Through all the years I have known you, I have been impressed by the example which you always gave in this respect..."

There is a cut in the last few words and this is what I want to put on record so that the public will know.

"...and might well serve as a model for public life."

Here we have one of our prominent newspapers writing that letter, possibly in the firm belief that it was the Minister for Finance who did not have that rectitude in public life which he should have had in relation to the manner in which this transaction was handled.

The Minister for Finance, as head of the Department, is answerable to this House.

The public will blame the Government or the particular Minister for any decision taken.

The Minister is responsible to the House and to nobody else.

I am asking the Minister to answer to the House and I hope he will do so in a satisfactory way. There are many of us here who, outside the House, as members of local authorities, have to take note of the manner in which our requirements are met by contractors on the basis of tender, and it has always been thought that if you leave the matter of dealing with tenders to non-political people, you are going to be free from all kinds of "pull" and can confidently look for service to the community from the officials dealing with them. I say that if this transaction is allowed to go through and if this change is allowed to be made, unless adequate evidence is given to the House that the State is going to benefit and to benefit substantially from it, confidence in Government Departments in dealing with matters such as tenders will be very much shaken.

If, for 30 years and eight months, on the basis of merit and reliability, you have had from particular people the service you would expect, surely that meritorious conduct on the part of a commercial firm, at least so long as they are competitive, entitles them to continuity. I do not know what other information the Minister will give us, but I have asked specific questions. I want to know what advantages the State is going to get by the change to the new contractor which could not be had from the old contractor. I want to know if the assurances cover the handing over to the State of part of the commission in breach of their agreement signed as recently as November, 1944, if they are not in a position to fulfil it.

Finally I want to say that I have made inquiries about the responsibilities of such an agency and I am told that this particular firm has over all the years acted as adviser to the Department as to what papers were suitable for certain advertisements and kept the Department informed as to the circulation of each paper. In all the years, their conduct has been such that they have felt it their responsibility to save the State money and not to embark on indiscriminate advertiseing for the sake of getting a commission. I thought at one time that the State paid, over and above the commission they got, a percentage for their services, but I now have the assurance that this firm never received one penny fee over and above what they earn from the commissions that came to them from the associated newspapers which paid them the commissions or part of them and that further they handed over to the State every penny of commission they received from the papers who were not bound by an agreement of this kind.

I find myself in a very awkward position in this matter because I have a great deal of sympathy with the contractor who has been displaced. He has a name which is well known to those of us who remember Arthur Griffith and Sinn Féin in the early days. It is a name which carried a definite appeal and there is no tribute that could be paid to the former contractor, on either personal or commercial grounds, that I would not heartily assent to. I have to speak here, however, on behalf of the Government Contracts Committee. As you have reminded Deputy Briscoe, Sir, I am answerable to the House for the Stationery Office and for the Government Contracts Committee, and I think that, while there may be two opinions as to the coercive factors involved in the transfer of this account, they did what appeared in their view to be in the best interests of the State.

The Government Contracts Committee are in a very difficult position. They are bound, whenever contracts are opened for tender, to place the contract with the lowest tender, provided they are satisfied that he will be in a position to fulfil the contract.

Deputy Briscoe referred to the numerous organisations for which the successful tenderer is at the present moment advertising agent and the mere enumeration of them, I think, will dispose of any suggestion that the new contractor is not competent to fulfil the contract. The question does, of course, arise as to whether he would be able to fulfil the financial requirements of the contract, to give effect to those assurances which on the figures as they have been submitted to me enabled him to quote a tender which was, shall I say, lower by some hundreds of pounds than the former contractor.

Would not that be difficult in view of what Deputy Briscoe said? It would be very difficult to quote anything lower.

When the Deputy puts that question to me, he is asking me to pass judgment upon the manner in which certain decisions have been arrived at. I think he will recognise that that might be unfair to two parties.

I appreciate the Minister would be in a difficulty.

Undoubtedly if the assurances which have been given by the contractor to the Stationery Office and to the contracts committee prove to be unfounded, then it is——

Could the Minister tell me anyway how can an assurance outside of a contract be binding on the contractor?

I was coming to that if the Deputy had permitted me.

I am sorry.

As I was saying, if these assurances prove to be unfounded, the financial basis on which the assumptions of the contract were based will prove to be equally unfounded and the contract will prove not to be as advantageous to the State as the contracts committee in their view believed it would be. That is merely a case of mistaken judgment. I do not think that the committee acted otherwise than upon a fair basis. I think they acted according to their best lights and in their opinion they did what was best for the State.

On the questions which Deputy Briscoe asked which I think go more or less to the root of the matter, there are three which, perhaps, I will answer. What advantages will the State get from the new contractor? So far as services are concerned, I should say none. In so far as those services will be provided at a lower figure the State will get that amount. Are the assurances legally enforceable? Well now, I should not like to answer that question very definitely. Quite frankly, speaking as a layman, I would have doubts. I propose to have the papers and the matters submitted to the Attorney-General to ask how we shall stand.

Hear, hear!

With regard to the question of a bond which Deputy Briscoe also raised, I should say that it was not necessary to ask the former contractor for a bond because he had been so long associated with this business and had given satisfaction from year to year. With regard to the new contractor, quite frankly I do not see what value the bond is because he is a man in an established business, as Deputy Briscoe pointed out, and there cannot be any doubt about his competence to undertake the work. I do not see how the State can blame him if the assurances which he has given are not legally enforceable. No contract was given for the bond. My view is that I think it was a work of supererogation without very much binding effect.

Are the differences due to a hand-over of the commission?

That is a matter on which, again, there is a conflict of opinion. I understand that the new contractor takes the attitude that he will not have to forego any of the commissions which he would be normally entitled to. I do not say "forego". "Retire", I think, is the word used. I do not think he will have to retire any of the commissions which he would normally be entitled to under any existing advertising agency. That is a matter I cannot determine. It is one for the advertising agencies on the one hand and the newspapers on the other.

It is as consistent as reducing taxation and the cost of living at the same time.

I do not think there is anything else I have to answer. On the question of the short notice, I regret very much that, having regard to the fact that the existing contractor had been asked to carry on for a month and then two months, much longer notice was not given to him to adjust his affairs. Again, in this matter, the officials acted with a superabundance of zeal to save the State, as they thought, some reasonably significant sum of money.

The Dáil adjourned at 8.10 p.m. until 3 p.m. on Wednesday, 31st March, 1954.

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