Dáil Éireann Debate, Tuesday - 12 February 2013
328. Deputy Terence Flanagan asked the Minister for Public Expenditure and Reform if there is a requirement for more forensic examination of the financial affairs of potential participants in Government sponsored projects (details supplied); and if he will make a statement on the matter. [6876/13]
View answerThe assessment of a tenderer’s financial and economic standing is a key part of any procurement process because tenderers must have the necessary capacity to carry out a contract. Establishing the appropriate suitability criteria that are relevant and appropriate to a particular contract is, of course, a matter for the contracting authority concerned. This is because the contracting authority is in the best position to gauge the appropriate levels of financial capacity that are appropriate to the needs of that specific contract.
My Department has developed specific national guidelines for contracting authorities in relation to minimum standards for suitability criteria for construction contractors interested in tendering for public works projects (GN 2.3.1.3 Suitability Criteria for Works Contractors – Minimum Standards), published as part of the Capital Works Management Framework, which is available at www.constructionprocurement.gov.ie. In relation to pre-qualification criteria, the guidelines stress that public bodies must ensure that any criteria levels set by them must be both justifiable and proportionate to the needs of the contract.
The level of reliable information available to contracting authorities is limited below the point where audited accounts are required to be submitted to the Companies Registration Office, currently this is only required for companies with a turnover in excess of €7.3 million. However specific guidance on the financial appraisal of works contractors is currently being developed by my Department and will be available at www.constructionprocurement.gov.ie when finalised. The document is intended to provide advice to Contracting Authorities to ensure that appropriate information is sought from contractors who apply to take part in a competition for the award of a public works contract in order to assess their financial and economic standing. The guidance will deal predominantly with the threat posed to a Contracting Authority by the insolvency of the main contractor and suggests the steps to be taken to manage the risk through appropriate measures taken in the procurement stage.
Guidance already exists in GN 1.5 Public Works Contracts (Section 2.3 Bonds and Guarantees) on the steps that contracting authorities should take to minimise the risk to the taxpayer in the event of insolvency and is available at the same website.
