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Wednesday, 17 Jun 2015

Written Answers 102-112

Public Procurement Contracts

Questions (102)

Billy Timmins

Question:

102. Deputy Billy Timmins asked the Minister for Public Expenditure and Reform the extent to which post-tender negotiation takes place in respect of contracts awarded through the public procurement process, despite this practice contravening the Irish rules for public procurement (details supplied); if during the lifetime of the current Government any contracts awarded through the public procurement process were contingent on, or awarded as a result of, successful post-tender negotiation; if the results of these negotiations materially disadvantaged other tenderers who would otherwise have been the winning bidder; and if he will make a statement on the matter. [24097/15]

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Written answers

Public procurement is the acquisition, whether under formal contract or not, of works, supplies and services by public bodies. National rules governing public procurement must comply with the relevant EU, WTO and national legal requirements and obligations. In general under EU law, public contracts above a certain value must be advertised EU-wide and awarded to the most competitive tender in an open and objective process.

As set out in the guidance to which the Deputy refers post-tender negotiation is prohibited under EU rules as it diminishes transparency and can give rise to abuses in the tendering process. The system is designed to operate on the basis that tenderers submit their most competitive bid in response to the specifications set out in an RFT. It is not envisaged for example that a contracting authority using an open or restricted tendering procedure would seek to negotiate either price or elements of the tender post the tender closure date. 

Where a negotiated procedure is used, this must be done strictly in accordance with either Article 30 (with prior publication of a contract notice) or Article 31 (without prior publication of a contract notice) of EU Directive 2004/18/EC.  This is a separate procedure to an open or restricted tendering procedure and it can only be used in very limited and defined exceptional circumstances.

I am not aware of any post tender negotiations used by contracting authorities that were in breach of EU Directive 2004/18/EC which materially disadvantaged other tenderers that would otherwise have been the winning bidder. If the Deputy has any concerns or information regarding such cases, I would encourage you to raise the matter directly with the relevant contracting authority or enforcement body.

Public Procurement Contracts Expenditure

Questions (103)

Billy Timmins

Question:

103. Deputy Billy Timmins asked the Minister for Public Expenditure and Reform the amount of money which has been spent by this Government since 2011 to ensure that suppliers who, through outsourcing or by other means, are dependent on offshore suppliers to win contracts meet all requisite ethical standards for contracts awarded through the public procurement process; and if he will make a statement on the matter. [24098/15]

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Written answers

The main purpose of the EU public procurement regime is to open up the market and to ensure the free movement of supplies, services and works within the EU having regard to Treaty of Rome principles including transparency, proportionality and equal treatment. This is the rationale that shapes the detailed rules (Directives) governing the regime.

Public procurement procedures require applicants to meet certain standards when applying for public contracts. The criteria upon which contracting authorities may exclude applicants from the award procedure of public contracts are set out in Regulation 53 of SI 329 of 2006 European Communities (Award of Public Contracts) Regulations and Article 45 and Recitals (34) and (43) of 2004/18/EC, the EU Directive on the co-ordination of procedures for the award of public works contracts, public supply contracts and public service contracts. Before an applicant, in relation to certain breaches, is excluded the applicant may make a case and provide supporting evidence as to why it should not be excluded. The contracting authority must consider this evidence before deciding whether to exclude or include an applicant.

In qualifying for inclusion in tender competitions for public contracts, applicants must submit signed declarations stating that none of the circumstances outlined in Regulation 53 of SI 329 or Article 45 of 2004/18/EC apply. 

Under the current regime and standard forms of contract, there are requirements in place for compliance with legal obligations. For example Clause 2 of the standard form of the public works contracts requires the contractor, his personnel and sub-contractors to comply with all legal requirements. 

There is a substantial body of legislation that directly or indirectly governs construction activities, however two key pieces of industry specific legislation; the Safety, Health and Welfare at Work (Construction) Regulations 2013 and the Building Control Regulations 1997 2014 both place considerable responsibility, not only on contractors, but on all those involved in construction projects including designers, supervisors and individual workers. 

The ultimate sanction for serious breach of health and safety regulations is a criminal conviction and imprisonment. Compliance with health and safety regulations is separately assessed in a pre-qualification of a works contractor with supporting evidence required to demonstrate the applicant possesses sufficient resources and is competent to carry out the proposed works. The Works Requirements which are a key part of the contract documents also set out detailed specifications on how regulatory standards are to be met. 

Contractors are required to submit on-going certification under Clause 5.3 (Pay and Conditions of Employment) of the contract that they have complied in full with the requirements of that clause which covers aspects such as compliance with employment law, and deductions for social welfare. Contractors are also required under this Clause to maintain records and timesheets in respect of all those engaged on the works. 

The new EU rules comprise a suite of three Directives (Public Procurement, Utilities and Concessions) that repeal the existing rules governing the conduct of procurement across the EU but the basic architecture of EU procurement will remain intact. The changes in the new regime were agreed principally to streamline the public procurement process and to put in place more simplified and flexible rules to reduce red tape and to make the procurement process more efficient.

The Office of Government Procurement (OGP) is currently exploring policy choices as part of the transposition process. One of the policy areas highlighted in the consultation document is adherence to "applicable obligations" in labour law. Each Member States has the choice on which appropriate measures to adopt to ensure compliance with this obligation as well as choices on the level of oversight down the subcontracting supply chain. The OGP is currently exploring the appropriate measures to adopt and have sought views on this choice as part of the consultation process. Clearly, a key objective in transposing these new provisions is to avoid imposing disproportionate administrative burden on contracting authorities and tenderers while at the same time adhering to applicable labour law obligations. Getting the balance right will help to ensure value for money outcomes from procurement for the economy as a whole. 

Public Procurement Regulations

Questions (104)

Billy Timmins

Question:

104. Deputy Billy Timmins asked the Minister for Public Expenditure and Reform if he will confirm that all contracts awarded through the public procurement process during the lifetime of this Government were so awarded only after the company to which the contract was awarded was fully incorporated, including those contracts with a value of below €5,000, which were awarded but which still require the successful party to have corporate capacity to contract, for the award to be legal, fair and proper; and if he will make a statement on the matter. [24099/15]

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Written answers

Public Procurement can be defined as the acquisition, whether under formal contract or not, of works, supplies and services by public bodies.  It ranges from the purchase of routine supplies or services to formal tendering and placing contracts for large infrastructural projects by a wide and diverse range of contracting authorities.

EU directives set out advertising requirements and tendering procedures for contracts above certain value thresholds that must be applied by all public bodies involved in procurement.  For contracts or purchases below these threshold values national rules apply. 

There is no requirement for a tenderer to be a registered company in order to be awarded a public contract. Any economic operator, defined as a person, or a group of persons, that carries out works, or supplies products or services, is entitled to tender for a public contract under EU Directive 2004/18/EC, transposed into Irish law by SI No 329 of 2006

Economic operators applying for above EU threshold contracts are typically assessed against pre-qualification criteria to establish their ability to do the job by reference to their financial and economic standing, their technical and professional capacity, and their insurance levels. Successful economic operators who progress to the award stage are assessed either in terms of the lowest price or the most economically advantageous tender (MEAT) to determine the best offer. Establishing the levels of qualification criteria and award criteria that are relevant and appropriate to a particular contract is a matter for the contracting authority concerned. This is because the contracting authority is in the best position to gauge what is appropriate relative to the needs of that specific contract.

It is a basic principle of public procurement that a competitive process should be used unless there are justifiably exceptional circumstances and that winning government business is done in a fair, transparent and accessible way.

Public Procurement Contracts Expenditure

Questions (105)

Billy Timmins

Question:

105. Deputy Billy Timmins asked the Minister for Public Expenditure and Reform the total quantum of expenditure with suppliers on contracts of value less than the €5,000 threshold, below which contracts may be awarded on the basis of a verbal quotation; when he plans to extend the national e-procurement system to cover all public procurement contracts, with a value both above and below €5,000; if he has confidence that the existence of less stringent requirements for public procurement contacts with a value below €5,000 is not being abused by State bodies, Government Departments or their proxies; the controls that are in place to prevent such abuse; and if he will make a statement on the matter. [24100/15]

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Written answers

EU directives set out advertising requirements and tendering procedures for contracts above certain value thresholds that must be applied by all public bodies involved in procurement.

For contracts or purchases below these threshold values, contracting authorities can contact the OGP to see if they can procure the goods or services on their behalf. Where this is not the case the following national procedures apply:

- supplies or services costing less than €5,000 in value may be purchased on the basis of verbal quotes from one or more competing suppliers;

- contracts for supplies or services between €5,000 and €25,000 in value should be awarded on the basis of responses to specifications sent by fax or email to at least three suppliers or service providers. ICT procurement opportunities with a value of €10,000 or greater are required to be advertised on eTenders in line with paragraph 2. (viii) of DoF Circular 2/09.

- goods and general services with an expected value of €25,000 or more should be advertised on the eTenders website.

Public bodies are required to publish all contract award notices over €25,000 on the eTenders website with effect from 1 August 2014. There are no plans to compel contracting authorities to publish procurements below this level on eTenders at present and it is questionable whether SMEs would welcome the increased administrative burden this would place on them. I would point out however that under Department of Public Expenditure and Reform Circular 10/14 buyers are requested to extend the use of the eTenders website to include tenders for low value purchases where possible. In relation to the level of procurement that falls below €5,000, there is no data available on the quantum of procurement involved as this information is not published on the eTenders system.  

In relation to  abuses by State bodies, Government Departments or their proxies regarding procurements below €5,000, I would point out that it is a matter for individual contracting authorities to ensure that their public procurement function is discharged in line with the standard accounting and procurement rules and procedures. The question of putting controls in place in these areas is a matter for the local management which in turn is subject to scrutiny by the internal and external audit functions of these bodies.

Public Procurement Contracts

Questions (106)

Billy Timmins

Question:

106. Deputy Billy Timmins asked the Minister for Public Expenditure and Reform if persons and bodies corporate without any training in procurement or commerce are permitted to put services out to tender through the public procurement process; the training that persons or bodies must undertake in order to be eligible to run tendering processes and interpret responses received using the public procurement process, and award work to bidders that is funded by the Exchequer; and if he will make a statement on the matter. [24101/15]

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Written answers

Currently, public service procurement activity is carried out by many contracting authorities throughout the State ranging from small schools to hospitals to central Government Departments. Public procurement in Ireland is complex, with different levels of procurement development, capabilities and systems across the public service. To date, there have been no specific training requirements for those undertaking public tendering, although many staff have received training in procurement through various bodies such as IPA, IIPMM and DIT. Many procurement staff also have academic qualifications in procurement or related fields such as engineering, law and  business. As part of the procurement reform programme, the OGP is considering the nature of professional public procurement training and possible accreditation.  

The Office of Government Procurement commenced sourcing operations in 2014 and, together with sector sourcing organisations, is taking responsibility for sourcing all goods and services on behalf of the public service. In addition, the OGP has responsibility for procurement policy and procedures, sourcing systems and data analytics. 

Staff have been recruited into the OGP from across the Public Service, thereby concentrating and leveraging the public sector's procurement expertise. In addition, the OGP is operating to common policies, processes and procedures. This strengthening of procurement expertise will in turn provide Departments and Agencies with increased certainty and reduced risk by providing them with compliant sourcing solutions.  

To ensure a consistent approach to operations and an over-arching cohesive culture in an organisation consisting of people from diverse entities and backgrounds, the OGP has developed a learning and development strategy based upon a set of technical and behavioural competencies as well as a matrix of appropriate training interventions to address any gaps in these competencies.  

Initial training has commenced and is aimed at equipping staff with the necessary skills and knowledge to work to a common standard in the following three core areas:

- Core Procurement & Category Management Training;

- Public Sector Procurement;

- Customer Service. 

Public Procurement Contracts

Questions (107)

Billy Timmins

Question:

107. Deputy Billy Timmins asked the Minister for Public Expenditure and Reform the ethical standards public servants must conform to when they contract on behalf of the State; if there is a central register where public servants personally declare that they have no vested interest in the awarding of contract, and no conflict of interest in awarding any contracts of any value whatsoever; and if he will make a statement on the matter. [24102/15]

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Written answers

Under the Standards in Public Office Act 2001, civil servants are required in the performance of their duties to maintain the highest standards of probity by conducting themselves with honesty, impartiality and integrity. Specifically they are not allowed to use their official positions to benefit themselves or others with whom they have personal, family, business or other ties or seek to influence decisions on matters pertaining to their official positions. They are not permitted to negotiate or arbitrate in any matter affecting a Government contract or the purchase from or sale of goods to the State where, in their private capacities, they are interested either as principals or as shareholders in a company being one of the principals in the matter under consideration.

I would also point out that the standard procurement template documents (RFTs and Contracts) on the Government's eTenders website require tenderers, individual employees, or agents or subcontractors of a tenderer to fully disclose any conflict of interest or potential conflict of interest as soon as it becomes apparent. Failure to do so may result in elimination from a competition or termination of a contract.

In relation to a central register, under the Ethics in Public Office Acts 1995 and 2001 all persons who occupy or occupied a "designated position" of employment in a public body are required to furnish an annual statement of interests disclosing any interest held by the person and any interests held, to the person's actual knowledge, by his or her spouse or civil partner, a child of the person, or a child of a spouse, which could materially influence the person in or in relation to the performance of his or her official functions. In the public service all positions at Principal Officer level are prescribed as designated positions of employment. In the case of the Office of Government Procurement all posts are designated for the purposes of the Ethics Acts. 

In conclusion, it is very important that the public procurement function is discharged with probity, transparency and accountability and in a manner that secures best value for public money. Procurement practices are subject to audit and scrutiny under the Comptroller and Auditor General (Amendment) Act 1993 and Accounting Officers are publicly accountable for expenditure incurred. If the Deputy has any concerns or information regarding potential ethical breaches, I would encourage you to raise the matter with the relevant contracting authority or enforcement body.

Public Procurement Regulations

Questions (108)

Billy Timmins

Question:

108. Deputy Billy Timmins asked the Minister for Public Expenditure and Reform if any measures are utilised to ensure that competing parties in the public procurement process are compared on a like-for-like basis in respect of standards in workplace safety and employment regulations, notwithstanding that a competing party may use inputs from low-cost countries outside of the European Union in the supply-chain process; and if he will make a statement on the matter. [24103/15]

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Written answers

The main purpose of the EU public procurement regime is to open up the market and to ensure the free movement of supplies, services and works within the EU having regard to Treaty of Rome principles including transparency, proportionality and equal treatment. This is the rationale that shapes the detailed rules (Directives) governing the regime.

The enforcement of employment and health & safety legislation apply equally to public and private sector contracts. Consequently, it is not for me as Minister of Public Expenditure and Reform to set out a separate policy for public sector contracts. My colleague Mr Richard Bruton TD, Minister for Jobs, Enterprise and Innovation has overall policy responsibility for employment rights and the area of health and safety in the workplace. The National Employment Rights Authority (NERA) is responsible for enforcing minimum statutory employment rights and entitlements in the State and, in undertaking that role, carries out a range of functions including the provision of employment rights information and the inspection of employment related records. NERA operates a system of risk based inspections in sectors where there are identifiable risks. Inspections are also carried out in response to complaints received and routine inspections are undertaken as a control measure. It is a condition of any contract entered into by a public authority with a private sector entity (other than for operations that may reasonably be considered as small scale) that the entity is required to provide access to certain information. This information may assist the authority to assess compliance with employment legislation consistent with the requirements of EU and national law. While the Health and Safety Authority (HSA) has overall responsibility for the administration and enforcement of health and safety at work in this jurisdiction. The HSA monitors compliance with legislation at the workplace and can take enforcement action up to and including prosecutions.

Public procurement procedures require applicants to meet certain standards when applying for public contracts. The criteria upon which contracting authorities may exclude applicants from the award procedure of public contracts are set out in Regulation 53 of SI 329 of 2006 European Communities (Award of Public Contracts) Regulations 2006 and Article 45 and Recitals (34) and (43) of 2004/18/EC, the EU Directive on the co-ordination of procedures for the award of public works contracts, public supply contracts and public service contracts. Before an applicant, in relation to certain breaches is excluded, the applicant may make a case and provide supporting evidence as to why it should not be excluded. The contracting authority must consider this evidence before deciding whether to exclude or include an applicant.

In qualifying for inclusion in tender competitions for public contracts, applicants must submit signed declarations stating that none of the circumstances outlined in Regulation 53 of SI 329 or Article 45 of 2004/18/EC apply. The OGP has made provision within its standard template suite of tender and contract documentation to address situations where breach of employment or health and safety (or other relevant) legislation comes to its attention in the context of contract administration. Discharge of fees is subject to compliance with terms and conditions of contract which includes legislative compliance. Similarly material breach of such terms may trigger a right of termination.

Public Procurement Contracts

Questions (109)

Billy Timmins

Question:

109. Deputy Billy Timmins asked the Minister for Public Expenditure and Reform the appeal mechanisms, outside of judicial review, that are in place for parties who are unsuccessful in the public procurement process; his plans to introduce such an appeal mechanism; the specific steps the State takes to ensure that parties who are unsuccessful in the public procurement process and undertake a judicial review against the awarding body are not disadvantaged when competing in subsequent public procurement processes; and if he will make a statement on the matter. [24104/15]

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Written answers

The Office of Government Procurement (OGP), has developed a pilot service to address  concerns raised by suppliers most notably SMEs, in relation to possible barriers for suppliers in competing for public procurement tender opportunities, as part of the Action Plan for Jobs 2014.

The pilot service known as the Tender Advisory Service (TAS) was launched on 1st February 2015 and was welcomed by industry representative bodies. The service is designed to give an informal outlet for potential suppliers to raise concerns in relation to a particular live tender process. The pilot covers all procurement processes carried out by the OGP or other public sector contracting body (excluding the commercial semi-state bodies) and will be subject to review after the first twelve months.

The objectives of the initiative are to improve communications with suppliers and increase professionalism and consistency in how procurement processes are carried out across the public service. Engagement with the service in no way impedes the rights of individuals to pursue their rights formally under the Remedies legislation.

Under EU and National rules, contracting authorities are responsible for their own decisions relating to the tendering process. However, in the interests of best practice the contracting authority should comply with any suggestion made by this service.

Parties who engage with TAS or undertake a judicial review against a contracting authority in respect of a particular tender competition should not be disadvantaged when competing in subsequent public procurement completions. To do so would be in contravention of national and EU rules which seek to promote an open, competitive and non-discriminatory public procurement regime. Contracting Authorities cannot favour or discriminate against particular candidates and there are legal remedies which may be used against any public body infringing these rules. Contracting authorities are responsible for establishing arrangements for ensuring the proper conduct of their affairs, including conformance to standards of good governance and accountability with regard to procurement.

Ministerial Correspondence

Questions (110)

Charlie McConalogue

Question:

110. Deputy Charlie McConalogue asked the Minister for Public Expenditure and Reform when a final reply will issue to his interim response (details supplied); and if he will make a statement on the matter. [24112/15]

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Written answers

I regret the delay in issuing a final reply to your representations. Unfortunately, this occurred because the issues raised  on behalf of the organisation involved crossed a number of areas of responsibility. The question of the availability of financial assistance would be a matter for the Minister for the Environment, Community and Local Government  whose Department has responsibility for a number of Community and Rural schemes that may be relevant. I have made arrangements to refer this matter to him for consideration. 

As regards access to laptops or other computer equipment in Government Departments, guidance from my Department to Departments on Depreciation and Disposal of PC's and other computer hardware sets the period for depreciation of IT assets at five years.  The Circular also states that equipment that continues to function properly should be replaced only when necessary and that equipment should be sold at market value. Each Department is responsible for the management and disposal of its own IT assets. For instance, my Department disposes of obsolete IT equipment via a charity which was  chosen as part of a periodic competitive exercise.

Enterprise Support Services Provision

Questions (111, 112)

Mick Wallace

Question:

111. Deputy Mick Wallace asked the Minister for Jobs, Enterprise and Innovation further to Parliamentary Question No. 11 of 10 June 2015, the educational training courses, other than those in responsible welding co-ordination, required in order for steel fabricators to meet their compliance obligations under European Union Directive EN-1090-1; and if he will make a statement on the matter. [24094/15]

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Mick Wallace

Question:

112. Deputy Mick Wallace asked the Minister for Jobs, Enterprise and Innovation further to Parliamentary Question No. 180 of 19 May 2015, the training possibilities under SOLAS and Education and Training Boards for steel fabricators in order for them to comply with European Union Directive EN 1090-1; the subsidies or grants available, or envisaged, in this regard under these schemes; and if he will make a statement on the matter. [24145/15]

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Written answers

I propose to take Questions Nos. 111 and 112 together.

In general, the implementation of the EU Construction Products Regulation, (CPR), which sets out requirements regarding the CE Mark for Structural Steel, is a matter for the Department of the Environment, Community and Local Government (D/ECLG). I understand that officials in that Department have worked with a broad range of stakeholders to ensure the industry was aware of, and prepared for, the implementation of the Construction Products Regulation in Ireland. I also understand that a significant number of steel fabricators operating in the State have already established the systems necessary to comply with their obligations under the Construction Products Regulation and, more specifically, the requirements of I.S. EN 1090-1. D/ECLG remains committed to working with all stakeholders in order to continue to raise awareness and facilitate the implementation of the Construction Products Regulation in Ireland.

With regard to your specific question concerning the educational/training courses provided by SOLAS for steel fabricators to meet the requirements of I.S. EN 1090-1, the programmes provided by SOLAS and the Education and Training Boards (ETBs) are primarily targeted at unemployed people who are generally referred to programmes by the Department of Social Protection. I understand that the ETBs in Cork, Dundalk, Galway, Shannon, Tralee and Waterford provide metal fabrication apprenticeship training, which incorporates elements of certification training.

Skillnets, on the other hand, is funded from the National Training Fund through the Department of Education and Skills and funds groups of companies in the same region/sector, and with similar training needs, through training networks that deliver subsidised training to Irish businesses. It may therefore be beneficial for steel fabricator companies to explore what economies of scale might be achieved for companies seeking the same upskilling in the same area. There are no subsidies or grants available or envisaged to meet the requirements of the CPR or I.S. EN 1090-1.

The role of the Local Enterprise Offices (LEOs) is to provide information to small and micro firms and to signpost them to relevant agencies/bodies for training and certification. The provision of the specialist technical training required to achieve certification to an International or European Standard, such as that required by steel fabricators in this instance, is outside of the remit of the LEO services. However, to date, the LEOs - in conjunction with the National Standards Authority of Ireland (NSAI) - have provided five general awareness/information seminars on the topic at various venues around the country.

In view of the NSAI’s final certification role, and given the roles and responsibilities of other Departments and agencies, my Department has discussed the requirements of the CPR with the relevant Departments and agencies i.e. Department of the Environment, Community and Local Government, Department of Education and Skills, the LEOs and the NSAI. Based on the information provided, my Department has devised a step-by-step guide on the current training provision in the public education sector. The guide is available on my Department’s website under ‘Latest Publications/Notices’ and has been distributed to the LEO network and to the relevant Departments for uploading on their websites.

The guide is tailored for those steel fabricator firms affected by the two key areas requiring action i.e. Responsible Welding Coordinator (RWC) and Factory Production Control (FPC) under Execution Class 2 (commercial and residential buildings). Further courses can be provided depending on the level of demand from firms. In relation to FPC training, this is only available through consultants. However, as part of their information provision and advisory role, the LEOs may be able to organise group training between firms and consultants. Firms should enquire about this through their local LEO office. In addition, the newly-formed Irish Association of Steel Fabricators has a website with useful information in relation to the CPR requirements including weld testing to meet the I.S. EN 1090-1 requirements.

NSAI has undertaken the accreditation requirements to enable it to act as a notified body under the CPR. More detailed information on the certification assessment process is available on the NSAI website at http://www.nsai.ie/Steel-Fabrication-CE-Marking.aspx, including clarification about which products are covered by standard I.S. EN 1090 and a helpful pre-audit questionnaire to facilitate preliminary assessment by affected businesses.

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