Dáil Éireann Debate, Tuesday - 28 November 2023
237. Deputy Bernard J. Durkan asked the Minister for Public Expenditure, National Development Plan Delivery and Reform whether he remains satisfied that every effort is made to utilise best procedure in relation to State contracts; and if he will make a statement on the matter. [52560/23]
View answerState contracts govern the relationship between the entities who provide supplies or services or undertake works to public bodies following a competitive tender process.
They are usually somewhat different to contracts that regulate the behaviours between solely private entities in that they must have regard to a variety of public policy imperatives, not least of which are the rules governing public procurement. The core principles of which require public bodies to transact in a manner which ensures transparency, equal treatment, open competition, and sound procedural management.
Across the range of sectors in which public bodies operate where they engage private sector entities and, indeed, other public sector and semi-state bodies there is significant variety in the range of contract types that apply.
The Office of Government Procurement (OGP) and its sector sourcing partners in health, education, defence and local government have a range of central arrangements in place for commonly sourced supplies, services and minor works to support the delivery of public services.
The OGP also publishes template contracts and procurement documents which public bodies may use to engage the supplies and general services they require. The OGP is responsible for the Capital Works Management Framework (CWMF) and the suite of template contracts and procurement templates which must be used by public bodies engaged in delivering the Exchequer-funded element of the National Development Plan.
Those template forms of contract and the documents used in the procurement and award of contracts are kept under regular review to ensure they are up to date with applicable legislative and policy developments. The most recent legislation introduced by the EU Commission which impacts procurement include:
- EU Regulation 2022/576 of 8 April 2022 aimed at placing sanctions on the participation of economic operators from the Russian Federation; and
- the International Procurement Instrument which introduces measures limiting non-EU companies' access to the open EU public procurement market if the governments of those countries do not permit similar access to their own domestic public tenders for EU companies; and
- The Foreign Subsidies Regulation which contains the main substantial and procedural rules on tackling distortive foreign subsidies on the internal market.
The CWMF is undergoing a comprehensive review which will undergo a progressive refinement over the coming years that will change the manner in which public works projects are procured and managed. Implementation of a number of reforms has already commenced and in July 2023, I, along with my colleague Ossian Smyth TD, Minister of State at the Department of Public Expenditure, NDP Delivery and Reform with responsibility for Public Procurement, announced a package of reforms, both in contracts and procurement processes to build confidence in NDP delivery.
These include:
- A range of amendments to the public works contract published in July 2023 to address the uncertainty with respect to the risk posed by the exceptional level of inflation and continuing volatility in the price of construction materials and energy in the aftermath of the pandemic and the Russian invasion of Ukraine.
- Insurance and liability requirements in the CWMF have undergone amendment arising out of stakeholder engagement. Both measures are aimed at rebalancing the level of risk transferred under the CWMF.
- Reporting requirements for contracting authorities on embodied carbon are being introduced within amended cost report templates published under the CWMF in October. Initially these will operate on a voluntary basis until more developed databases dealing with embodied carbon in construction materials are available.
- Building Information Modelling (BIM) requirements will be introduced on a phased basis into the CWMF from January 2024 commencing with the design teams on projects with a value in excess of €100m. BIM refers to the use of a shared digital representation of a built object to facilitate the construction and operation process in both buildings and infrastructure. BIM facilitates design, construction and operation processes to form a more reliable basis for decisions.
These are but a few of the developments being undertaken across state contracts in response to legislative, policy and market changes that illustrate the breath of change that is applied to both the conditions of public contracts but also to the procurement templates and guidance that is relied upon to award those contracts. It represents a significant ongoing commitment to ensure the state keeps step with the latest developments.
