Dáil Éireann debate -
Tuesday, 4 Dec 2001

Vol. 545 No. 4

Written Answers. - Defence Forces Equipment.

Seán Ryan

Question:

76 Mr. S. Ryan asked the Minister for Defence the position regarding the proposed supply of five new helicopters for the Defence Forces; if he has received representations from ICTU regarding the possibility that the allocation of the contract could help retaining jobs at a company (details supplied) at Dublin Airport; if he has considered whether or not to seek new tenders; when he expects to make a final decision on the matter; and if he will make a statement on the matter. [30644/01]

Minister for Defence (Mr. M. Smith)

The tender competition for the acquisition of medium lift helicopters for the Air Corps is ongoing. I expect to be in a position to make an announcement on this matter shortly.

The tender competition for the supply of the helicopters is being carried out under EU contracts procedures. The award of contract criteria set out in the tender documentation states that the contract will be awarded on the basis of the most strategically and economically advantageous tender applying the following award criteria, not necessarily in order of priority: functional characteristics; technical merit; all maintenance and on-line technical support; after sales service and warranty terms on offer; cost and ready availability of spare parts; tender prices; and life cycle costs over a nominal 20 year period.

I am advised that other factors cannot be taken into account as part of the evaluation process. It is not possible to alter the award of contract criteria once the competition has begun.

There is no provision in EU procurement directives for the use of offset and therefore it is not the practice of the Department of Defence to consider offset or countertrade issues in the assessment of tenders. In any event, it would not be possible to measure objectively the value of such offers in the assessment of tenders. The long-term economic effects of such offers would be unquantifiable for a variety of reasons.

Negotiations on countertrade, were they to be a consideration in the course of a tender competition, would invariably take place between the tenderer and a company or number of companies located here. In such circumstances there could be no control over the conduct of those negotiations by the Department in question.

From the point of view therefore of maintaining a truly competitive process any consideration of countertrade should only come into play after a decision to enter into contract negotiations with the chosen tenderer.

Once a decision on the merits has been made on a particular contract it is the practice in my Department to seek offset in Ireland in the case of major contracts. It is, of course, made clear to the contractor that there is no legal or contractual obligation to provide such offset. Many contracts have resulted in significant offset to the benefit of the Irish economy.

Question No. 77 answered with Question No. 55.