I propose to take Questions Nos. 29 and 32 together.
The specific details in relation to the school in County Limerick referenced by the Deputies are a matter for my colleague, the Minister for Education and Skills. Appropriate professional advice is employed to administer public works contracts and the prices returned in a tender must be considered in the context of each tender competition. Under the EU Procurement Directive a contracting authority may not automatically reject a tender because it considers it abnormally low and must first seek clarifications from the tenderer on the constituent elements of its tender before it reaches its decision to reject or accept the tender. Contractors must qualify according to pre-determined criteria designed to ensure that only those competent contractors with the capacity to deliver the project are admitted to the tender process.
Under a public works contract the contractual relationship is between the public body and the main contractor. A public body has no contractual ties with a subcontractor engaged by a main contractor. Any contractual relationship is exclusively a matter between the main contractor and its sub-contractor. Because of the interfaces that exist between the trades that are traditionally employed on a construction contract there is considerable scope for claims for delay and disruption should a body directly engage all the entities who are actually involved in constructing a project. Public works contracts are awarded to a single party (the Contractor) who is responsible for the delivery of the project. It is generally accepted that the successful completion of a works project is dependent on a single point of responsibility to ensure delivery on time and within budget.
It is clear that the present arrangements in relation to construction contracts and conditions of engagement in the industry generally can be too imprecise and informal and as a result do not offer a cost effective, timely solution to payment disputes for consultants, contractors, subcontractors in the supply chain. The Programme for Government contains a commitment to introduce new legislation to protect small building subcontractors that have been denied payments from bigger companies. In this regard, my colleague Minister of State Mr Brian Hayes has been working with Senator Feargal Quinn to develop the Senator’s private member’s Construction Contracts Bill to which Deputy O’Donovan referred to in the topical issue debate.
During the Second Stage reading of the Bill, Minister Hayes signalled to the House his intention to bring proposals to Government on Committee Stage amendments dealing with the following issues:
Thresholds: In order to ensure that the legislation applies to majority of Construction Contracts the scope of the legislation will be broadened by reducing or removing the current monetary thresholds contained in the Bill.
Adjudication: This issue of making adjudication awards binding for both the public and private sectors is a complex issue. It is important to strike the right balance between giving this legislation the necessary enforcement provisions, whilst ensuring that the application of the legislation is equitable and the taxpayer is safeguarded.
Supplies: Proposals are being developed to broaden the scope of the legislation to include bespoke construction supply contracts. However, as I understand it this is likely to be difficult to define in a manner that is easy to interpret.
When these and a number of other technical issues have been examined, Minister Hayes will bring proposals to Government in advance of Committee Stage early in the New Year. This is a complex piece of legislation which affects both private and public sector works contracts and it is essential that the solution to this issue needs to be balanced so as to avoid imposing regulatory or cost burdens on parties in dispute, the State or others.
