Vol. 548 No. 3
28 Mr. Shatter asked the Minister for Defence the time frame envisaged for delivery of the Sikorsky helicopters for the Air Corps; if he has concerns that progressing this contract could be delayed by court proceedings; and the assurances given to him concerning the provision of local employment arising out of the acceptance of the Sikorsky tender. [4292/02]
29 Mr. Wall asked the Minister for Defence the position regarding the acquisition by the Air Corps of new medium range helicopters; if a contract has been signed; if he has received notification of possible legal action from unsuccessful bidders; and if he will make a statement on the matter. [4691/02]
I propose to take Questions Nos. 28 and 29 together.
On 17 January 2002, I authorised my Department to open negotiations with Sikorsky International Operations, Inc., Connecticut, USA, for the purchase of three medium range helicopters – S-92s – for search and rescue purposes, with an option capable of being exercised within three years for a further two helicopters for general purpose military transport. The decision followed from a detailed examination of the tenders received from the four companies: Sikorsky, USA; CHC Scotia, Scotland; E.H. Industries Ltd.; UK and Eurocopter, France.
The offer from Sikorsky was deemed to be the most strategically and economically advantageous tender taking account of the award criteria set out for the tender competition, which were: 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 satisfied, on the basis of the facts presented to me, that the offer from Sikorsky would provide best value for money from the taxpayers point of view. The time frame proposed by Sikorsky would see the delivery of three search and rescue helicopters by the end of next year.
Legal proceedings have been instituted on behalf of one of the unsuccessful tenderers and correspondence has been received from solicitors acting on behalf of another of the unsuccessful tenderers. My Department is dealing with the Chief State Solicitor's office on these matters.
Eurocopter has obtained leave to institute judicial review proceedings in the High Court seeking the disclosure of certain information. It is my intention to be as forthcoming as possible in this regard. However, as the matter is due to come before the court shortly I do not wish to say anything further at this stage.
As I have already mentioned, the offer from Sikorsky was deemed to be the most strategically and economically advantageous tender taking account of the award criteria set out for the tender competition. No other factors were taken into account.
Could the Minister confirm that the Eurocopter Cougar helicopter, as opposed to the Sikorsky S92, was the preferred choice of the expert group he appointed to assess the tenders? Could he indicate the way in which the Sikorsky helicopter was the strategically and economically better product to acquire and why it is preferred? Could he confirm that the reason for the court proceedings is the failure of his Department to comply with reasonable speed to a Freedom of Information Act request made regarding the tendering processes and documentation relating thereto? Is he in a position to confirm that Eurocopter has threatened to issue a High Court injunction which could prevent the current negotiations with Sikorsky progressing and which could substantially delay the delivery of the helicopters which the Defence Forces, and particularly the Air Corps, so badly require?
The answer to the first question is "No". The answer to the second question is that the civil and military procurement group and the technical exercise that was necessary to evaluate everything concerned with the different options, proposals and tenders was very detailed and comprehensive. I have no doubt the people involved in that process carried out that exercise with the utmost integrity and that the final decision, which I took, was based on the best possible deal for the taxpayers.
I do not control matters relating to what an unsuccessful tenderer might do or require. These are matters, which Deputy Shatter well knows, which would be handled by the Chief State Solicitor and not by me.
On the Eurocopter offer, they were asked after the tender process for a best and final offer. Could the Minister explain to the House why the company was asked for a final offer, considering that it had gone through the tender process? One would think it was an auction, that they were asked for the best and final offer.
The Deputy will appreciate the complexities involved in a project of this size, the biggest contract my Department has ever undertaken. Securing the best possible result necessitated a long and detailed analysis of very complex proposals, which had to be checked again and again with the manufacturers. By the time this work was heading towards its completion, the tender prices were out of date. As the Deputy will probably be aware, a tender, when submitted, is effective generally for two months, sometimes longer, but quite a number of those were out of date at that time.
Second, arising from the horrific events of 11 September there were strong international indicators that the prices in the aircraft market generally might be different in a new situation. I am obliged once the tenders are out of date to conduct a final tender process and on my own judgment, to see whether there were savings which my Department could make in a changed international situation, and that is what I have done.
Would the Minister clarify was it his judgment that Sikorsky was the preferred tenderer or was it the judgment of the expert group as well? Second, is he satisfied that he has properly complied with the European Union competition law and is he concerned to ensure that this matter is progressed in a uncontentious way in so far as that is possible? Can he indicate to the House when his Department received Freedom of Information Act requests for documentation from either one or both of the unsuccessful tenderers and why those requests have not yet been complied with?
The answer to the second question is that my decision was taken on 17 January, which was only just a couple of weeks ago. Following on that, there were certain requests and there are a number to which I have replied through the Chief State Solicitor. I am not aware that there is anything which has been requested of me that I need to do in respect of that and certainly if there is, I would be very happy to do it.
I stand over any decisions I have taken in this regard. The buck stops with me on decisions in the final analysis. I take the final decisions. Naturally I would base that decision on a raft of different proposals which would be made to me in the context of the examination that was carried out. I see technical merit, delivery date and, of course, price to be the determining factors in such a decision.
Is the Minister satisfied this was dealt with in a manner fully compliant with European Union competition law? Perhaps the Minister will give a straightforward answer as to whether the decision he made is contrary to the recommendation from the expert group.
I have already answered that question. I am perfectly happy that the decisions which were taken will stand up to the most rigorous scrutiny in any court under any European regulation.
In the assessment of the three craft, did the expert group visit the manufacturing premises of the three companies? Was visual and working experience of the three gained by the group? The media have put a lot of focus on the offset element of the deal and claimed it played a major part in the granting of the contracts. Regarding the offset, how many representations did the Minister receive from the political arena? Were IBEC or ICTU involved? Who else was involved in making representations to the Department on the basis that if a particular contract was accepted there would be a benefit to the north Dublin community and further contracts awarded to a particular company? This has been in the newspapers both before and after the decision and it has now lead to litigation.
The answer to the Deputy's first question is yes, the technical group would take all of these matters into consideration. Each of the four tenders met the technical requirements set out in the tender. I was, of course, aware of the offset proposals. Quite a number of representations were made, directly and indirectly, to me by at least two of the tendering companies. One said it would compete with the other in offset deals should it succeed in getting the contract. However, I cannot take matters like that into consideration. I am obliged to abide by the rules which were set out in the tendering process and treat all of the tenders equally. The conditions known to them at the start of the competition had to be adhered to until the end.
