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Seanad Éireann díospóireacht -
Wednesday, 18 May 2022

Vol. 285 No. 5

Quality in Public Procurement (Contract Preparation and Award Criteria) Bill 2021: Committee Stage

SECTION 1
Question proposed: "That section 1 stand part of the Bill."

I signal my intention to introduce an amendment to section 1 on Report Stage. The definition of "contracting authority" in section 1 differs from the definition in the 2016 procurement regulations. It is possible this difference could lead to ambiguity and confusion in the application of the provisions of the Bill and the procurement regulations. There are two differing definitions of "contracting authority". I do not need to go through what they both are. I intend to clear this up on Report Stage.

I would be very happy to engage with the Minister of State in respect of any clarification of the definition of "contracting authority". At the moment, the contracting authority is intended to be the State, regional assemblies, local authorities, bodies governed by public laws and associations formed by those bodies. Overall, €17 billion per year is spent on public procurement contracts by that range of bodies. I wish to indicate our willingness to engage with the Minister of State in respect of the formal definition of "contracting authority" to ensure it is compatible with other legislation.

I thank the Senator. I would also be happy to engage with her during that time.

Question put and agreed to.
Section 2 agreed to.
SECTION 3
Question proposed: "That section 3 stand part of the Bill."

I again signal my intention to introduce an amendment to section 3 on Report Stage. Section 3(4) proposes to prevent contracting authorities from including a best price-quality ratio where the price is greater than 50% of the criteria. The Attorney General advises this provision seems inconsistent with the wording and purpose of the directive and that it could be considered to breach the State's obligations under the directive. The directive requires contracts to be awarded on the basis of objective criteria that set out explicitly that the most economically advantageous tender should be assessed on the basis of the best price-quality ratio, but it does not seem to envisage such a restriction. I will be seeking to amend section 3(4) on Report Stage.

I will speak to section 3. Of course, we can discuss it on Report Stage but I would have concerns on this. Section 3(4) is a crucial part of the Bill, but I will be open to see what the proposals are.

To be clear, section 4 deals with the contract award criteria. These are the criteria on which decisions as to how public contracts are awarded are made. Under the EU procurement directives, contracts must be awarded on the basis of the most economically advantageous tender. There is provision within these directives for three approaches to assessing what is the most economically advantageous tender. One approach is based on a price-quality ratio, another is based on price or cost only and another is based on the life cycle costing. In my Bill, I seek to ensure that the price-quality ratio, either on its own or in combination with the life cycle costing, becomes the default main measure. However, I do not preclude the use of lowest price or lowest cost criteria only in my legislation. The Bill is quite clear that there is no prohibition on the use of a lowest price or lowest cost approach only but simply requires that where that approach is taken, a declaration is made that explains why that approach was chosen. I believe this is absolutely consistent with the requirements of the EU directives.

This is the core part of the Bill because, while we have those three options available and while they are equally encouraged, the lowest price and lowest cost approach has effectively become the default mechanism. It is the one used most easily. It is seen as the shortest route to take the lowest price approach even though there is incredibly strong evidence that, when that approach is taken, it often results in further costs down the line arising from supplementary claims. We could list examples, from CervicalCheck to Carillion and others, where taking the lowest price approach has ended up costing the State more in the long run.

My Bill does not remove the existing discretion. That was an option when the directive was originally being transposed. The 2014 directive encouraged states to use procurement as an effective tool to deliver on environmental and other goals. The State chose not to exclude the lowest price only approach, which was an option under the directive. My legislation respects that decision. Under the Bill, contracting authorities will still have discretion but they will be required either to think about quality in the sense of putting together a request for tenders based on price and quality or to think about why they are not considering quality and to provide a declaration setting out the reason they have chosen the lowest price approach.

I am happy with and appreciate the constructive engagement we have had with the Minister of State and his office but, while we can look at the detail within section 3(4), my Bill does not preclude the use of the lowest price approach, although it does require an explanation. Unless that is included in the Bill, it is not clear what the legislation adds because it is about changing the culture. It is already possible under the legislation to use approaches based on the price-quality ratio or the lowest price. The Bill just asks us to stop and think about the use of the lowest price approach. When the lowest price approach is used, the reason must be explained.

I will come to the question. I do not know if this relates directly to section 3(4)(b). Again, I am happy to engage further on Report Stage but it would be useful if the Minister of State were to indicate which paragraphs of section 3(4) are likely to be the subject of discussion at that point because, again, they do slightly different things. I will be really clear for the record. The Bill does not remove discretion. It creates accountability. That requirement for an explanation is an attempt to shift the culture because, while some public bodies already use the price-quality ratio approach a lot, others do not. The Bill endeavours to empower procurement officers who want to go for the price-quality approach and to make that approach the easier and more automatic option. It aims to make using the lowest price approach an exception rather than the rule.

The Minister of State is very welcome. It is great to see him taking a constructive approach to this Bill. Sinn Féin fully supports the Bill. We believe it is really important. I thought it might be appropriate to come in on this section because the issue of how we carry out procurement is crucial to changing our economy and our communities for the better. Sinn Féin is now very much wedded to policies of community wealth-building as it recognises its value. Procurement is central to that. The criteria could be changed to include factors such as a low carbon footprint, a living wage and trade union recognition. We know from how procurement is practised in other countries in Europe that the scope is there under the EU directives. I very much hope that, in the Minister of State's further discussions with Senator Higgins, the core principle of taking a broader approach to procurement, particularly with regard to the price-quality ratio, will be respected. Again, we very much value the Bill and are very happy to support it today.

I welcome the tenet of Senator Higgins's Bill. Obviously, procurement is quite complicated, particularly for major projects. It is an area that is open to legal challenge. The simplest approach is to award contracts to those who submit the lowest tender. Are changes likely to result in more prolonged processes of legal challenges or scrutiny? I wonder if this proposal could lead to further delays in the awarding of tenders, although I believe there is merit in what the Senator is proposing and has laid out.

Another point relates to certain contractors that might not have the best record in the delivery of certain projects, who came through the system having offered the lowest prices for those projects, then tendering for similar projects. Could these contractors' problematic history be taken into account in assessing further tenders? I refer to companies that have created problems and delivered projects with unacceptable delays. There is merit in looking at that because we have seen this issue in certain public developments and in private developments that received certain amounts of public money that I can think of. In these cases, a given company submitted the lowest tender but its reputation was such that, if it could have, the board would not have accepted it based on what it had heard, what it knew and previous history. I know it is difficult to put down on paper what might be possible but it is an area we need to look at.

I welcome the Minister of State to the House. He seems to be spending quite a lot of time working in here. We are delighted to see him again today. This is certainly a very proactive Bill. The general gist, the thinking and the logic behind it seem to be very logical. We are happy to progress with it. I know the Minister of State will speak to it now. I am curious. We discussed it briefly beforehand but, looking through the Bill, does the Minister of State see any wider implications from an EU standpoint should the Bill manage to pass into law?

I might clarify a point before the Minister of State comes back in. As I have said, section 3(4)(a) addresses the question of the price-only approach. Perhaps there are concerns regarding section 3(4)(b), which specifically relates to larger-scale projects. Some €165 billion is due to be spent on the national development plan. Section 3(4)(b) relates to large contracts that are over the EU works threshold, which is about €5.4 million.

Again, we are talking about large-scale projects. The provision is that they would require a minimum of 50% quality weighting unless there is a declaration explaining why they are choosing not to apply such a weighting. It is important to note that this is allowed under EU law and there is case law that demonstrates that. One relevant case is Irish Waste Services v. Northern Ireland Water Limited and another, which was heard in the European Court of Justice, which is the highest court in respect of this, is the EVN AG and Wienstrom case. In the latter case, the European Court of Justice concluded that a contracting authority is free to choose both the award criteria and their weightings. There is case law from the highest level, at the European Court of Justice, which makes it very clear that the weighting can be chosen. In that regard, that does not preclude the setting of a minimum threshold.

My Bill does not interfere with the discretion of an authority to choose the weighting but it allows for a declaration which explains the reasons for the choice in respect of it. Again, if a public or contracting authority has a €10 million project and decides to do it with a 75% weighting on cost and only 25% on quality, it can do so but it must explain why. An example of how that might be relevant is the national children's hospital, where 75% of the decision was based on price and only 25% on quality criteria. Of course, we know that project has ended up costing close to €1 billion in supplementary claims and other costs because it was not addressed at the time. That would be an example whereby, if this Bill had been in place, it would still have been an option to do that but we would at least have a very useful record explaining exactly why the contracting authority chose to go with 75% price and only 25% quality. That would be useful in terms of accountability and transparency.

In broad terms, what we are trying to do with public procurement is get a good price. We want to get value for money for the State and for the taxpayer but at the same time, we want to get the highest quality product and we want to do our purchasing in a transparent way. Lastly, we have strategic procurement, which is a new thing and the issue here is our compliance with Government objectives in terms of climate change, green procurement, social procurement and so on. These are the overall goals of procurement.

I share the objectives of this Bill and believe that we all want to arrive at the same place. The Senator has asked about the wider implications from an EU point of view. There are EU directives on procurement with which we must comply. Effectively, they are European law and with that in mind, when I spoke to the Attorney General's office, the advice I got was that it was not happy with the wording and was concerned that the Bill would be not in compliance with European law. I have to take that seriously but at the same time, I know that the Dutch have managed to achieve this goal. The Dutch are under the same regime and have to comply with the same EU directives. In that sense, I know we can get there. I know that between now and Report Stage I can work with the Attorney General and we can find a way to word this so that we achieve what we are trying to achieve without exposing ourselves to the risk of breaking European law.

We are looking here at quality criteria. For some people, there is a fear that quality criteria means subjective criteria and that we are moving away from objective criteria, such as the amount of money we are willing to pay, towards more subjective criteria which makes the process more like a beauty contest. In fact, however, quality does not have to be subjective. There are many ways to measure quality on a numerical scale, including various ratings, the qualifications of the staff who will carry out the task and so on. We do not necessarily have to equate subjective criteria with quality criteria; they are not always the same thing.

I have detailed the section I am trying to amend in order to remove any risk of being non-compliant with European law, namely section 3(4). I want to minimise legal challenges. While we cannot avoid them altogether, one of our the objectives in the context of this Bill is to make sure we are not inviting ourselves into a world where every decision is challenged and projects are delayed as a result.

Question put and agreed to.

Before I move on to section 4, I want to acknowledge the presence of our former colleague, former Senator Billy Lawless. I thank him for all the work he has done in trying to connect America and Ireland. That has been challenging over the last couple of years. I welcome him back to the House.

SECTION 4
Question proposed: "That section 4 stand part of the Bill."

I want to indicate my intention to introduce an amendment on Report Stage. This is a consequence of the proposed amendment to section 3. If we amend section 3, we are likely to require an amendment to section 4 too. From a policy perspective, the requirement under section 4 of the Bill for the chief deciding officer, for example, a Secretary General or a CEO, to make a declaration on every procurement procedure where price is the only award criterion could be onerous and unnecessary. Such a declaration may be subject to legal challenge by dissatisfied bidders, not least on the basis that the chief deciding officer, who may not be an expert in procurement, may be considered to have introduced a discriminatory input into the procurement process. Interventions by a chief deciding officer to the assessment in the subject matter of the proposed procurement would need strong assurance that no material difference applied in quality or price-quality ratio, as appropriate.

I appreciate the Minister acknowledging the fact that my legislation mirrors the Dutch legislation, effectively, which is running without concern or obstacle. It has been assessed as delivering 2.4 times better value from contracts. We are not balancing value for money against quality. The fact is that quality is part of value for money. That is why the price-quality ratio approach and the lowest price approach both qualify under that umbrella of most economically advantageous because the EU directives recognise that quality is often one of the ways to deliver value.

As the Minister mentioned, the Dutch legislation has been applying and has been found to deliver greater value by taking the exact approach set out in this Bill, which is consistent with European law. It has been mentioned that it would be difficult to sign off every time we go with price-only criteria but the goal of the Bill is to ensure that price-only becomes the exception rather the rule. It is a requirement and I do not think it is too much for chief decision makers to explain why they are opting for price-only. If it is simply a matter of them feeling it is easier to go with that model because it is the most hands-off model, that is not necessarily the model that is delivering best value for the State. That is a model that simply delivers most convenience or deniability which is not actually a win for public money, for €17 billion of public money or €165 billion of national development plan money.

Those who have agreed with me and who have engaged with me on this issue do not think that the current procurement system is working as well as it should. Effectively, if my Bill makes it harder to continue with business as usual and with not having to think about these issues, then that is okay. This is about a culture shift. I have engaged with many groups on this, including the Royal Institute of Architects of Ireland, RIAI, the Construction Industry Federation, CIF, Chambers Ireland, Social Entrepreneurs Ireland, academics from the National University of Ireland, Galway and the University of Limerick, the Chartered Institute of Building, and SIPTU.

From the Construction Industry Federation to SIPTU, people are agreeing that the model needs improvement. Simply arguing that doing this might change what we do, make what we do already more difficult and make us shift is not really an argument for not doing it. It is an argument for doing it because otherwise we hear it may be simpler and it can be easier to go with price only and we do not think we will get the same challenges. We need to streamline. We are putting inertia and convenience over the purpose we should all have, which is getting the best and most genuinely advantageous value from how we spend our public money so that it delivers for us in terms of quality.

We must bear in mind who benefits from putting in those quality criteria. We talk about the legal challenges from the disappointment involved, but let us think about who we disappoint when we do not want to think about quality. When we do not think about quality we penalise good companies that put the effort in to innovate, put work in, have decent employment standards, have better environmental standards, and push ahead in thinking ahead of the contracting authority about what is going on. It is hard to punish or exclude companies that have bad records but it is a lot easier to reward companies that have good records and ones that show they always deliver on time and that people love what they have given to the State. If we think about who loses, the current lowest price model being the default model penalises good companies, including SMEs, that are doing good work and that want to lead. I would point out again that this Dutch model is being taken up all over Europe, so by not bringing it in we are disadvantaging our companies because they will not be navigating the same systems as others. It is important to bear that in mind. It involves doing things a little bit differently but that will become streamlined and it is hoped it will become the exception. It should not be the case that 1,000 sign-offs are coming across the desk of a chief officer but it should be the odd or occasional one where there might be a good reason for it. It is okay that we shift things around a little bit, move on in this and use it better.

I want to make some brief points on section 5. To say-----

We are still on section 4. The Minister of State intervened.

This will follow on from what Senator Higgins said. This is about using our public spending power as a force for good. Senator Higgins spoke about the Netherlands and we have seen that this model has been working there since 2016. She also spoke about SMEs and this provides equality for small businesses and puts them at the centre. Those are the two points I wanted to make on section 4.

The last thing I meant to say is the question of who else loses out when we do not have quality. It is the public who use the goods and services.

I agree with what Senator Flynn said. We have to make sure our small businesses are winning contracts. The majority of our procurement spend goes to SMEs but we need to keep a watch on that. To make sure I am listening to people, every quarter I meet the representatives of the different small businesses and I meet as many small businesses I can. I encourage any small businesses that are having difficulty selling to the Government to contact me directly.

Question put and agreed to.
SECTION 5
Question proposed: "That section 5 stand part of the Bill."

Section 5 concerns the "Application of European Convention on Human Rights Act 2003 and related matters". I intend to bring forward an amendment to section 5. As advised by the Attorney General, amendment is necessary to ensure the provisions of the European Convention on Human Rights Act 2003 do not have greater scope and application under this Bill than they do under the European Convention on Human Rights Act 2003 itself. Section 5(1) of the Bill applies to contracting authorities instead of to an "organ of the state" as under the European Convention on Human Rights Act 2003. Contracting authorities under the Bill would include the President, the Oireachtas and the courts, which are expressly excluded under the European Convention on Human Rights Act 2003 as well as other bodies currently not subject to the European Convention on Human Rights Act 2003. It may also encompass bodies largely funded by the State, such as LEADER organisations, housing bodies, further and higher education bodies, voluntary and community bodies funded by the State, cultural institutions and so on, that currently are not subject to the European Convention on Human Rights Act 2003. I will work with the Attorney General to see if we can get different wording that can achieve the same thing without putting us into that bind.

I am happy to work with the Minister of State on that and I understand the intersections with the European Convention on Human Rights Act 2003. I inserted that legal advice to have that in but I am happy to look at that. For me, the fundamental part of section 5, and a principle which the Minister of State supports, is that the Irish Human Rights and Equality Commission Act 2014, which has a requirement for a public duty on equality and human rights, establishes a public duty that is placed on every public body in respect of actively promoting equality and human rights. I am happy to look at the European Convention on Human Rights Act 2003 provisions and ensure their compatibility, but the core part for me is that reminder to public bodies that when they are giving contracts, they have a public duty on equality and human rights. That duty applies to Departments or public bodies in what they do and in their contracts. We have had scenarios in the past like the example of Bus Éireann contracting buses that did not allow for disability access and, therefore, were not delivering on the equality obligations of Bus Éireann. Even though they were private contractors, Bus Éireann had that responsibility. It is a matter of following that duty through and embedding an understanding of the public duty on equality and human rights, and it applies to all of a public body's actions. This section of the Bill does not create a new obligation. The obligation is already there but this requires reporting in respect of how the public duty on equality and human rights has been reflected in procurement when the procurement activities for the year are being reported on under the statutes that already exist. I am happy to look at the European Convention on Human Rights Act 2003, but for me the core of this is that public duty.

I welcome the Minister of State to the House and I support this Bill. I want to express my respect and admiration for my Civil Engagement Group colleague, Senator Higgins, for the diligent research and massive effort that went into the Bill.

I want to speak to this section, which details a procedure for the Minister to produce guidelines for the qualitative, environmental and social human rights and equality considerations that arise in procurement for use by bodies that would be regulated by this Bill. It would be a welcome antidote to the narrow focus on cost that defines current procurement procedures. Section 42 of the Irish Human Rights and Equality Commission Act 2014 imposes an equality duty on public sector bodies. This means concerns around human rights and non-discrimination must play a role in their strategic outlook and that they must detail the steps taken to comply with this duty in their annual reports. There is a clear intention to place an ethical responsibility on public bodies, and this is understandable. We should hold those who are tasked with improving the lives of Irish people to high standards and they should endeavour to conduct themselves in a way that respects human rights and the value of equality. However, the area of public procurement elides this duty and it is a major oversight this Bill rightly rectifies.

I will give a practical example of how low-cost tendering has injured a valuable public body. We can look at the National Gallery of Ireland, for example, which is the largest art institution in Ireland and one that provides a wonderful public service. Art has immense social and political weight and the National Gallery of Ireland has reflected that with an exhibition in 2020 containing artwork from current and former asylum seekers. This is what made outrageous the National Gallery of Ireland's decision to award the contract for its café to the multinational catering conglomerate, Aramark, which is involved in running several direct provision centres in the country.

I do not need to list the many outrageous elements of the direct provision system to the Chamber. I know that the Government has expressed a desire to take action on this issue and I hope that it will be resolved along with the many concerns that have been raised by asylum seekers, and those who support them.

The reputation of the National Gallery has been damaged by this controversy. Its staff are embarrassed and demoralised, and several prominent artists have requested that their work is removed from the walls of the gallery. This is the sort of damage that the narrow "cost above all else" model of public procurement, which ties the hands of public bodies, can cause. While this Bill is not about excluding any firms from the tender process, it does empower public bodies to make decisions that make sense from both an economic and a public policy point of view. This Bill will allow public bodies to consider social factors that are clearly relevant to the value created by firms bidding for the tender. These social factors could include whether the applicants recognise their workers' trade union, whether they pay their workers a living wage, whether they employ environmentally sustainable production methods and many more worthy considerations. A more holistic model of public procurement would extend the spirit of the public sector equality duty into all aspects of public service provision. It would also enable public bodies to maximise the positive impacts that they can achieve with the resources that are available to them.

There are times when the procurement rules can be short-circuited, compressed or skipped altogether and they tend to occur when there is an emergency. I mean one cannot hold a tender for something when, for example, something is on fire. We saw this during the pandemic. When one has to buy syringes or something one may not have three months to get the best price. The same applies during the Ukrainian crisis with trying to find accommodation and food. One can reach over and pick the first available largest thing that can satisfy. One will always try to get some quotes and try to do something but sometimes that is what the result is.

I cannot comment on the National Gallery's procurement exercise, whether it was followed correctly or on a particular company. Earlier another Senator asked me a question that I did not answer. I was asked about the history and reputation of a company and how that can be taken into account when awarding contracts. What the law and European law says is that if they have broken the law in some way then that can be taken into account. So if a company has a judgment against it then one can rule it out. However, if a company is still in court and is fighting with it all of the time then that may not be enough to rule it out, and it probably is not enough, because one cannot say a determination is faulty or a judgment has been reached. What one can do is ask for references from past contracts. One can take various approaches to this matter but public procurement is very different from private procurements.

As public procurement tries so hard to be non-discriminatory, give everybody a fair chance and avoid one country picking its people over another country or somebody who is connected to the government being chosen, then one attempts procurement in a very transparent way. However, it is hard to rule out people simply because it was bad working with them or one had a bad experience but one would have that option with private procurement. If a private company hired somebody to do some work and it was a nightmare then one would not hire it again but it is difficult for us to avoid that.

On the question of social considerations, these are key because they are part of the Government's strategic objectives. For example, we can put criteria into contracts stipulating how much training will be provided by the contractor and will be considered as part of the criteria for deciding whether to award the job. Other criteria can be how much local employment will be provided, how many people with disabilities will be employed etc. So one can put in social considerations. We have guidance and that guidance will be strengthened in future.

We are discussing an interesting topic. One of the frustrations that I had as a trade union official was that we had companies winning contracts to build schools that consistently disregarded Labour Court judgments and would not pay Labour Court judgments. When I brought this matter to the attention of Departments they basically said that there is a procurement process and there is nothing they could do. So the same company, which meted out horrendous abuse, particularly to foreign nationals in terms of the non-payment of wages, consistently won further contracts to build further schools. Such a situation is not good enough. One of the key criteria that we need to see the Government emphasise is respect for the industrial relations machinery of the State.

I understand that exclusions are very difficult. I have studied procurement law and realise that if one does have an exclusion then one is more likely to be challenged. This is why it is really good to have price quality from the beginning, otherwise when a company with a poor track record offers the lowest price then one must award it the contract unless one goes through a formal exclusion process. However, price quality allows one to reward good practice. It is a lot easier to encourage and reward good practice than to penalise bad practice or a bad record. As the Minister of State has said, one could reward companies that have references and can show they have a track record for delivering on time. One can give that benefit.

The Senator has strayed off topic.

I apologise and finally I will mention the rights component.

I agree with the Senator. Labour Court judgments can be used as grounds for exclusion because they are court judgments even if they are ignored.

Question put and agreed to.
SECTION 6

On a point of order, I believe that amendments Nos. 1 and 2 conflict with each other as they seek to amend the same sentence. If one amendment is passed does that mean that the next one falls?

Amendments Nos. 1 and 2 are related and may be discussed together by agreement. Is that agreed? Agreed.

My advice is that there is no clear conflict on this issue but that can be determined after the debate. Having heard the arguments a call can be made on the matter.

I move amendment No. 1:

In page 8, line 37, to delete “shall” and substitute “may”.

Amendments Nos. 1 and 2 do not directly conflict with each other but can be combined in a set of three ways. Like Lego pieces, we will see how best to fit them together.

Section 6 deals with the guidelines for social considerations. These are areas of State policy on things like emissions reductions, our obligations under the United Convention on the Rights of Persons with Disabilities, the Istanbul Convention and Irish Sign Language recognition. The State has many concrete policy areas and goals.

Circulars have been issued and I wish to refer to the extremely useful Dutch guidelines as they state what goes into that place. The Netherlands has avoided legal challenges due to having clear guidelines on how things are reflected. Another reason is having a list of things to be aware of and consider at the design point. I have discovered that a lot of procurement legislation often tries to deal with social clauses, which are attached to a contract after it has been awarded. My amendments seek to go a little higher and design the criteria on which the allocation of a contract will be based.

It is also a step further up in terms of design. For example, if a playground is being designed, the contracting authority would not just state it is a contract for a playground, but also that it is doing a request for tenders for a playground that will also promote public goals in respect of inclusion and accessibility and will, for example, reflect the biodiversity or pollinator goals the State may have. By ensuring provisions are included early on, and we are not saying they have to be put in, we allow a contracting authority to make the initial request for tenders better.

Schoolbooks and library books are other examples. One of the instances where there was concern across the House was when the contract for library books was bundled into one very large contract that went to one company, whereas if there were, for example, provisions to support a local reading culture, a different approach would have been taken to how library books might have been purchased on a national level. Just transition, which will be very important, is another example. Where we have contracts in which one of the goals is just transition, and some of the funding is coming from just transition funds, it needs to be very clear that such factors will be factored into the design of that contract. I can give examples of where that did not happen.

In that context, these guidelines are a very powerful and useful resource for contracting authorities to design a better contract at the beginning. When they do so, that allows and justifies because the criteria that are attached have to relate to the performance of the contract. It is almost like setting the mission and the criteria then have to relate to delivering on that mission. That is where these guidelines can be incredibly powerful and useful. They have the potential to deliver the intention of the 2014 directive, which was around the achievement of these core public policy goals through public procurement as a tool and not just a shopping list.

However, I recognise that because these guidelines deal with multiple areas that may be quite wide, and the needs of particular contracting authorities may be different, the language in section 6(3) of the Bill could be too prescriptive. At present, it states that "Contracting authorities shall comply with any guidelines issued under subsection (1)", but there are of course different contracting authorities. Some guidelines will be relevant to some contracting authorities, while other guidelines will be relevant to other contracting authorities. I am conscious that section 6(3) is framed too widely at present and is too hard an obligation in that regard.

I have proposed three ways we can address this. I am interested in what the Minister of State believes is best. We could address it by stating contracting authorities "shall consider" any guidelines. That is the culture change and the requirement that there would be consideration of the guidelines. It creates an obligation but it is only an obligation to consider. That is one process. The other approach would be to use the wording "may comply". Again, it is stating contracting authorities might comply. It puts compliance into the Bill but the wording is "may comply", which recognises there may be exceptions where complying with a particular guideline might not be appropriate. The third approach would be to go with "shall consider " or "may consider", which is very weak but would at least indicate authorities may consider these guidelines. It loses a little of the strength in that we want people to at least look to the guidelines when a tender is being designed, but we would still be in a situation where they are being provided with a better tool through strengthened guidelines. Those are the three approaches. That is why I have those two words because they can be combined in four different ways. I am very open because I recognise this sentence is currently too narrow and too restrictive. I am open to those three approaches. My preference is probably for "shall consider". That creates an obligation, although only one of consideration. I am open to the Minister of State's thoughts on this.

The first problem I have with this is that if we, as the amendment indicates, directly substitute "comply" with "consider" we end up with a sentence stating the contracting authorities shall "consider with" any guidelines issued under subsection (1). There is an additional word, "with", in there, which makes sense when it is "comply with" but does not when it is "consider with". I do not know what the rules of the House or its Standing Orders are, but that wording does not make sense to me. I am happy to take out "shall" and change it to "may". That is fine by me but otherwise I do not think the second one works or it may be defective. I do not know what the rules of the House are or whether they can be changed.

The other option is to amend it on Report Stage. Perhaps it would be useful if the Minister of State indicates whether his preference is for "shall consider" or "may comply" because-----

I am sorry to interrupt. I am happy with "shall consider", but I will flag that we will change it on Report Stage because "consider with" does not make sense.

Perfect. In that context, I am happy to withdraw my amendments with the agreement that we put it forward as worded by the Minister of State on Report Stage.

I want to indicate my intention to table an amendment to this section of the Bill. Section 6 sets out provision for the Minister for Public Expenditure and Reform in relation to the issue of guidelines on social considerations, which contracting authorities are obliged to follow. Notwithstanding the amendment tabled by Senator Higgins today, the prescriptive nature of these guidelines could lead to increased legal challenge to procurement competitions and this could disrupt the provision of goods and services for the State, in particular the procurement of urgent and potentially life-critical goods and services. For example, as I mentioned, there are times when we will want to carry out emergency procurement as we did during the pandemic. Would that be affected by these guidelines? It is just something we need to make sure we consider and do not get ourselves into a sticky situation.

The Office of Government Procurement, OGP, has Circular 20/2019 on social considerations, with which the Senator is probably familiar. There is also an information note in this regard. The OGP chairs the strategic procurement advisory group across government, which provides policy advice and direction to public procurers with representatives of the relevant policy Departments on how they can implement social considerations. This will further enable the inclusion of social considerations into procurement processes in an effective manner that has the flexibility to drive the important social considerations that are relevant at the time.

I note the guidelines on social considerations proposed in this Bill would complement and expand those contained in the 2019 circular. I was very actively engaged with the OGP at that time on the development of that circular because I also dealt with legislation on these issues in the period of the last Oireachtas.

I understand and appreciate the situation in respect of emergency provisions and so forth. That can certainly be accommodated. However, the guidelines are very important because a contracting authority in the Department of Education, for example, will not necessarily be au fait with environmental goals. That is similarly the case if someone is procuring. It is really about strengthening the process because we cannot expect every procurement officer in the country to be an expert in every single area in the decisions they may make. I gave a very simple example, which is an important one for this House, of legislation driven by the Seanad in respect of Irish Sign Language, and the fact that when public buildings are designed now, because Irish Sign Language has that recognition, there is thinking about how an interpreter is planned for. It is a small thing, but including it in how we think about public buildings affects the kind of criteria that are looked for. It is a similar situation around the UN Convention on the Rights of Persons with Disabilities, as I mentioned, or indeed the issue of short-term disability. This is complementary and builds on that existing scope. It is something that is very useful and will give confidence to procurement officers in widening the value they seek to deliver from the contracting process.

There is a clear indication that this can be sorted on Report Stage.

In that case, I withdraw my amendment with the indication to come back with the revised wording as discussed.

Amendment, by leave, withdrawn.

I move amendment No. 2:

In page 8, line 37, to delete “comply” and substitute “consider”.

Again, there is agreement to come back with a revised wording.

Amendment, by leave, withdrawn.
Section 6 agreed to.
Sections 7 and 8 agreed to.
Title agreed to.
Bill reported without amendment.

When is it proposed to take Report Stage?

Report Stage ordered for Tuesday, 24 May 2022.

When is it proposed to sit again?

At 10.30 a.m. tomorrow.

Cuireadh an Seanad ar athló ar 6.11 p.m. go dtí 10.30 a.m., Déardaoin, an 19 Bealtaine 2022.
The Seanad adjourned at 6.11 p.m. until 10.30 a.m. on Thursday, 19 May 2022.
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