I move: "That the Bill be now read a Second Time."
I thank all those who contributed to the drafting of this Bill, especially David Dodd, Kate Butler and Kieran Mooney, and others associated with the Office of the Parliamentary Legal Advisers, who contributed to its drafting and ensured its legality in every line and letter. I thank the academics who have worked with me, particularly Deirdre Halloran from NUI Galway, to Ciara Gaynor and Janet Horner from my own office who have done huge work to bring the Bill to this stage. I also thank my group for supporting me and I thank all those who have spoken to me over the course of the development of this Bill in the past two years about their experiences of procurement, either as procurement officials or as people on the receiving end of public procurement.
This topic may seem wide and abstract but public procurement affects every area of our lives, even the most intimate areas such as the food we eat in hospital, the surfaces our children fall on, the person on the other end of a phone line when we have called for help. It affects the landscape and the greatest infrastructural projects too. Our roads, streets, public spaces, schools, hospitals and all the buildings we share are part of the public procurement process in many cases.
There are areas where the public delivery of services is better than public procurement but where public procurement is used, it is vital we do it responsibly and that we design and sign contracts on behalf of the people of Ireland. When we do that, we have to ensure we get the maximum public benefit, including the social and environmental benefit.
My interest in this area dates back to 2014 when the current European directives were being introduced. In 2015 and 2016, when I was still a member of civil society organisations, we worked around the potential we saw in those directives and the scope in them for social, environmental and other considerations, a scope which has, unfortunately, largely been unrealised. My Bill is not simply more pressing in the context of recent controversies such as CervicalCheck and the collapse of school projects under Carillion and Western Building Systems.
It is not simply a response to the problems which need to be addressed. It is also about the potential to be realised, the fact we spend tens of billions on public procurement and that those tens of billions are an incredible source of leverage and potential benefit to all our people.
We turn to the subject matter of my Bill, which concerns public procurement. What it does is to try to join up the dots in the procurement process and put quality at the heart of that process. There are three ways that a contracting authority may decide to undertake procurement, three bases on which it can decide to make its decisions. It can decide on the basis of the price-quality ratio, the balance between price and quality, it can decide on the basis of life cycle costing, or it can decide on the basis of lowest price only. Lowest price only was what was used in regard to CervicalCheck. It has been shown to have serious consequences because it removes quality from the equation. If the decision is made to go with the lowest price only approach, it becomes very difficult to try to introduce quality later on in the process.
At the time the European directives were transposed, France and Scotland chose to exclude lowest price only altogether so that lowest price would not be an option for contracting authorities. I am not attempting to replicate that. Instead, my Bill focuses on the Dutch model, which respects the discretion of contracting authorities but seeks to change practice and culture. Under my Bill, the price-quality ratio, where price and quality are considered, would become the default and the norm. Contracting authorities have the discretion to decide they want to go for lowest price only, but if they go for lowest price only, that needs sign-off at a senior level and they must publish a rationale. Effectively, what this Bill does is to oblige authorities either to think about quality or to think about why they are not thinking about quality. I hope it will lead to a change in practice where lowest price will become the exception rather the rule.
In most areas, the Bill does not seek to prescribe the exact ratio between quality and price in a decision. It recognises that this may vary and, for example, it may be 30%, 80% 60% or 40% on quality. The one area where we do set targets, however, is in regard to the billions which will be spent under the national development plan. These projects are not like those where, if we sign a three-year contract, we can learn from it and make changes the next time. National development plan projects are once in a generation or once in a lifetime projects. We simply have to get them right. That is why the Bill sets a threshold or target of 50% minimum for quality on national development plan projects. Again, exceptions may be made but a sign-off at senior level is required and the rationale must be provided.
I want to clarify an important point. This Bill does not mean that procurement has to cost more. In the Netherlands, the model which we are following, 73% of contracts still went to a lower bidder but those lower bidders also had to prove themselves in terms of quality. What it means is that commitments and evidence in regard to quality were on the table alongside the proposals on price. It is very important to note that research from the construction industry and from academic institutions in the Netherlands found that the public benefit was 2.4 times higher where a mix of price and quality was used. What we saw was that for a little bit more thought earlier in the procurement process, almost double the public benefit was delivered.
What do we mean by quality? This Bill is not prescriptive. It recognises that what is quality in one area may differ in another. Sometimes it is about the track record, the performance and the materials that may be introduced. The Bill is not prescriptive. It largely reflects the wide space within the language of the directives in terms of quality. What it also does is to require ministerial guidelines to be put in place. Those guidelines will contain existing commitments and targets, that is, cross-cutting commitments made by Government and already signed off on. They are not ones I am adding in but ones that already exist. These would be in areas like climate, accessibility and inclusion. This will get people out of their silos when they are doing procurement and it promotes joined-up thinking. If I am designing a space and I look to the commitment in regard to, for example, Irish Sign Language accessibility, maybe I will build a space for an interpreter because I have become aware of that cross-cutting commitment. If we are using materials, we may think more about their sustainability and how they contribute to our emissions targets. It is joined-up thinking. Again, it is for contracting authorities to decide which elements of those guidelines they wish to take on board, but it requires they show they have thought it through.
In the Bill, I also put forward the human rights duty. Again, the human rights duty already exists for public authorities and they are required by law, including in the Irish Human Rights and Equality Commission legislation of 2014, to promote equality and human rights. What this Bill simply does is require them to report on how they are delivering on equality and human rights, and to build that in to their regular procurement reports, as required by the regulations.
I want to address a few questions and concerns that have been raised with me over the course of my conversations with different parties. Who is involved in the sign-off? In the Bill, I set out Accounting Officers, accountable officers and Ministers as sign-off. Having engaged with the Government and listened to the concerns that were raised, however, it is my intention to remove Ministers from that sign-off process on Committee Stage, and I have engaged the Office of Parliamentary Legal Adviser, OPLA, on amendments to that effect. It will be Accounting Officers and accountable officers, usually at Secretary General level.
Will this require more red tape? The answer is "No". What this Bill does is save us from complicated processes of repair later on in the procurement process by making sure things are done in a clear and transparent way from the beginning. It is empowering legislation. It empowers procurement officers to think about quality. I have spoken to those who feel nervous about using quality because they feel they would have to get permission from above. Now we know they can think about quality and they can do a better job. In the same way that, for example, the fines being added in terms of data protection empower data protection officers, this Bill empowers procurement officials to think in creative and positive ways about the benefits to society.
The Bill has wider benefits. It rewards and allows for the recognition of those companies, usually SMEs, that are delivering higher standards, that have records and that have done the work in terms of quality. It gives SMEs from whichever European country a potential comparative advantage. It also has the wider benefit that when the State, as the largest customer in Ireland, raises the standards, it raises standards right across the board.
I thank all of those who have supported me on this Bill. I believe it can be a game changer in terms of the landscape, culture and practice of public procurement. If successful, I believe it will have ripple effects across every area of our life together.