I thank members for their contributions. When I started this process I had the same concerns as they do but, having put a huge amount of work into this and having consulted extensively with the providers, I am satisfied that this request for tender will meet the needs of the one person I am most concerned about in all of this, namely, the person who is unemployed and looking for a job.
I will try to answer some of the questions that have been raised. I accept that they are valid questions because I asked the exact same ones of my officials when we started this process. There has never been more consultation with the local employment services than there is now. For people to say they were not consulted is absolute nonsense. My Department has undertaken extensive consultations with the existing contract providers over the last number of years. This is about expanding the services. There are a number of areas in this country that do not have an employment service and I want to expand that service. That is why this has gone out for tender. We will learn from this tender process because at the end of the day it is about making sure unemployed people get all the supports they need to help them get a job.
In 2018, my predecessor attended the Irish Local Development Network, ILDN, annual meeting and informed all the CEOs of the partnership companies that the current contractual approach was not in accordance with EU and national procurement rules and that the Department would be working to introduce reforms, including open competition for the existing contracts, in order to meet our legal obligations. Officials from the Department engaged in a detailed question and answer session with the CEOs following the Minister's speech. In January 2019, the Department published the Indecon report and hosted a briefing session with all LESs and job club providers at which Indecon presented its findings and the Department outlined that it was now moving to implement those recommendations. They included the need to amalgamate LESs and job club services and award contracts through open procurement.
Officials from my Department in late 2019 visited all LES and job club providers to inform them of the Department's intention to procure contracts on a competitive basis and seek their input and views on the possible design of the RFT and contracts. The Department appointed consultants in 2019 to review the public employment service, including the contractors. As part of this review process, the Department insisted that the consultants engaged without the presence of the Department with nominees from the local employment service and job club providers. A series of workshops were organised as part of this process.
Officials in my Department have briefed representatives of the ILDN on the plans for future procurement since 2019 and these briefings have continued on a regular basis throughout 2020 and 2021. In my role as Minister in the two Departments, I host a regular forum with ILDN member companies and we have provided updates on the Department's plan at previous forums. My Department continued to engage with the ILDN to the fullest extent possible prior to the publication of the RFT rules. On 3 June, I hosted an information session on the phase 1 procurement process for the interested parties.
I want to be very clear. We have consulted extensively with local employment service providers. I know that in some places, they provide an absolutely excellent service. Reference was made to the Indecon review. It found that LES had, on average, a job placement rate of 28.8% when the annual target was 30%. Some would say that is not bad, and it is not.
However, I would like to point out something else. When one breaks down the figures a bit further, this average covers a significant range in placement rates from 14% to 45%. Some providers provide a great service and others do not do as well. I want everybody to provide a good service. That is why in this contract there is a minimum price. That is to ensure that people get the service they deserve. That is important.
I want to be clear that the total focus is on the user. My Department wants to procure high-quality employment services which focus on supporting individual jobseekers and other cohorts who are furthest from the labour market. This will be a tailored intensive employment service designed to address the needs of the people who are supported by the service. Bids will be evaluated on the basis of quality and an organisation's ability to access a wide range of supports and services to best meet the needs of their clients.
I do not want to say too much about the procurement process but I can state clearly that local employment services have a lot of contact with many different organisations. On that basis alone, an organisation's ability to access a wide range of services will be evaluated as part of the process. There is a limited cost element in the RFT, but it is within defined parameters.
The vast majority of the awarding criteria will be determined by the quality of the service, design and key personnel, as well as links with relevant local partners and stakeholders. There is a strong focus in this request for tender process for local services from local providers. This is about expanding the delivery of high-quality employment services across seven counties. The new service will have a strong local focus and its fee structure will be heavily weighted towards client engagement and progression. That is the one thing we all want to achieve. We will all agree that it is the client that is the number one person in all of this.
My Department will learn lessons from the phase 1 procurement process and apply them in the design of the multiple requests for tenders that we will publish later this year under phase 2. I cannot stress how much effort and time we have put into working with providers. This is not a for-profit driven agenda by any manner or means. This is a service for the people who need assistance to get them to help them get back into the workplace. Now more than ever, we need that because of the challenges Covid has presented to us.
Walk-ins were mentioned. The public employment services Intreo offices offer all individuals who require advice access to employment services. Under the request for tender for the new service, my Department will be able to refer long-term jobseekers, as well as other cohorts to the new service. All referrals will be organised by my Department's Intreo offices. They will determine the best employment service based on an individual's specific circumstances and requirements. In many cases, supports for individuals will be delivered through my Department's Intreo offices or will be referred to the new regional employment service.
If an individual is not in receipt of a social welfare payment he or she should contact the local Intreo office, which will offer him or her the supports and advice they want. It is important to say that this focus is again on the person looking for employment.
The JobPath model was mentioned. It is not the case that this is replicating the JobPath model in terms of procurement. I want to be clear that the request for tender for regional employment services is carefully designed to ensure that all sectors can bid for the contract and the fee structure reflects the intensive engagement required to support those furthest from the labour market. This is very much focused on the needs of the person. It is about how he or she can be assisted and helped to the maximum extent possible to help him or her get ready to enter into a job.
The JobPath payment structure is almost an inverse of the payment structure within the request for tender. JobPath has a nominal fee associated with the engagement with the customer. After that, any further payment to the contractor is associated with sustained employment. This means that where the customer does not enter into employment, the JobPath provider only receives the registration fee but must provide 12 months of employment services to the jobseeker.
The opposite is the case with regional employment services where the majority of payments, an indicative average of 90% of total fees, are associated with engagement, the service and individual progression. Under this model, 90% of the fee goes to the provider of the service in order that it can put all of the resources necessary into getting a person a job. A provider will get the last remaining 10% of total fees when the person secures a job. I want to be clear that 90% of the fee, which involves a minimum price, will go towards working with a person and giving him or her all of the support he or she will need to get him or her achieve employment.
I do not know if I have answered all of the questions, but I hope I have given the committee a flavour of what we are trying to achieve. It certainly is not to short-change anybody. It is about working and making sure people who need that service get it.