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 Header Item Public Service Pay Commission Reports (Continued)
 Header Item Public Procurement Tenders

Tuesday, 5 March 2019

Dáil Éireann Debate
Vol. 980 No. 4

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Minister for Public Expenditure and Reform (Deputy Paschal Donohoe): Information on Paschal Donohoe Zoom on Paschal Donohoe The Public Service Pay Commission has adopted a modular approach to its work programme for its present exercise focused on recruitment and retention issues in the public service. As the Deputy will be aware, the first module was published by the commission in August 2018 and deals with issues relating to nursing and midwifery, non-consultant hospital doctors and hospital consultants. The commission has not yet confirmed a timeline for completion of the further modules of its work programme, which will examine recruitment and retention issues in other areas of the health sector, the Defence Forces and the Civil Service, building on the preliminary analysis in its 2017 report and on the various submissions it has received.

In regard to the Defence Forces, I understand that written submissions have been received from both the employer and the staff associations. Oral presentations are scheduled for this week, following which I expect the pay commission to be in a position to indicate a likely timeline for the completion of the Defence Forces module. I understand the pay commission has engaged an independent firm to conduct a survey of Defence Forces personnel to assist in the analysis. This follows on from a study conducted in the second half of 2018 of specialist personnel in the Defence Forces. The main data gathering for the survey, which is being facilitated through the Defence Forces, will be conducted in February and March 2019.

Deputy Michael McGrath: Information on Michael McGrath Zoom on Michael McGrath As the Minister will know, the numbers in the Defence Forces continue to fall. I understand that the current number is 8,874, which is below the threshold of 9,000 the Government indicated it would not allow the Defence Forces to fall below and which is far short of the 9,500, which was set out within the White Paper. Will the Minister clarify the role of the Department of Public Expenditure and Reform in respect of this issue? He referred to oral presentations, but I understand that the Chief of Staff made a presentation before the commission on behalf of staff and management this morning, and that he was accompanied by officials from not only the Department of Defence but also the Department of Public Expenditure and Reform. We know that the latter Department was very much involved in a submission made in September by the Department of Defence and military management. Why is the Department of Public Expenditure and Reform directly involved in detailed presentations by the military and the Department of Defence?

Deputy Paschal Donohoe: Information on Paschal Donohoe Zoom on Paschal Donohoe The reason is that my own Department has overall responsibility for pay policy. As a result, we are present or involved in the preparation of submissions to the pay commission. The Deputy will know that in addition to the submissions that the employer makes, submissions are also made by those who represent employees, which, one hopes, allows the Public Service Pay Commission to make a nuanced conclusion in respect of the different issues it examines and make recommendations that will form the basis of acceptance by both sides. The short answer, as I have stated, is that my Department is present because of its responsibility for overall pay policy.

Deputy Michael McGrath: Information on Michael McGrath Zoom on Michael McGrath The fundamental question is when the Government expects the matter to move on. I understand the Minister's determination to uphold the integrity of the public service stability agreement, which I support. We are dealing with a construct, however, within the confines of that agreement to address specifically a crisis in recruitment and retention. Any recommendations or any report of the pay commission will need to be evidence based and, therefore, it must be methodical and thorough in its work. The Minister stated that an independent firm is involved and that the survey work of the personnel directly involved has been ongoing in February and March. Members of the Defence Forces, however, want to know when there will be an outcome. Does the Minister have any expectation or understanding as to when he will receive the Public Service Pay Commission's report on recruitment and retention in the Defence Forces?

Deputy Paschal Donohoe: Information on Paschal Donohoe Zoom on Paschal Donohoe It is a matter for the pay commission to determine when it will be able to complete the module. It is independent of my Department and reaches its own conclusions about the report and its processes. Nevertheless, as I have outlined, I expect the commission to indicate soon the timeline of the completion of the work. I hope that its indication of a timeline, which will be the first time it will be done publicly, will be of help in managing its work and in maintaining confidence in its work.

Public Procurement Tenders

 40. Deputy Jonathan O'Brien Information on Jonathan O'Brien Zoom on Jonathan O'Brien asked the Minister for Public Expenditure and Reform Information on Paschal Donohoe Zoom on Paschal Donohoe the extent to which he has issued guidance notes or oversight of the regulation of abnormally low tenders since 2011; and if he will make a statement on the matter. [10673/19]

Deputy Jonathan O'Brien: Information on Jonathan O'Brien Zoom on Jonathan O'Brien How many guidance notes or oversight documents in respect of abnormally low contract tenders have been published by the Minister or his predecessor since 2011?

Minister of State at the Department of Public Expenditure and Reform (Deputy Patrick O'Donovan): Information on Patrick O'Donovan Zoom on Patrick O'Donovan The awarding of public contracts is governed by the fundamental principles derived from the Treaty on the Functioning of the European Union as they apply to public procurement. These include transparency, equal treatment and non-discrimination, proportionality and mutual recognition. The European Union directives set out the legal framework for the award of contracts that exceed the specified monetary threshold for supplies, services and works. Under Article 69 of Directive 2014/24/EU, the EU directive governing public procurement, contracting authorities are obliged to require tenderers to explain the price or costs in a tender where tenders appear to be abnormally low in relation to the works, supplies or services. Contracting authorities must assess the response from the tenderer before coming to a decision as to whether they will admit the tender or reject it on the basis that it is abnormally low. Where the explanation provided by a tenderer does not satisfactorily account for the low level of price or costs, having taken into account the circumstances outlined in the procurement directives, the contracting authority may reject the tender, although it is not obliged to do so. When investigating what may appear to be an abnormally low tender, contracting authorities must take into consideration the possibility that the tenderer may be obtaining more favourable terms from suppliers and subcontractors than rival tenderers.

There is little scope for manoeuvre on labour rates since contractors are required by law to pay workers covered by the sectoral employment orders, SEOs, in accordance with the terms of the applicable SEO. More efficient methods, however, of working to reduce labour costs cannot be ruled out in assessing a tender. Notwithstanding this, there is nothing to prevent an entity from performing a contract at a loss, subject to it being compliant with labour, social and environmental regulations. Where the contracting authority discovers that the price is abnormally low because the tenderer is not meeting its obligations in the field of social, labour or environmental law, the tender must be rejected. Where works contracts are concerned, specific reference to unbalanced tenders and abnormally low tenders is made in section 8 of the standard template instructions to tenderers published under the capital works management framework. These documents, which constitute the rules under which a tender competition is run, must be used in all public works contracts and have been published since 2008.

Deputy Jonathan O'Brien: Information on Jonathan O'Brien Zoom on Jonathan O'Brien In fairness, I know the law. It is contained in SI 284/2016, which deals with abnormally low contracts, but that is not the question I asked. Rather, I asked whether any guidance notes on the matter had been issued by the Department since 2011. While we are on the subject of abnormally low contracts and how they are meant to be addressed by the contracting authority, will the Minister of State explain why the contract for the national children's hospital was not considered an abnormally low contract? Perhaps the Minister of State has different information to me, but why were no discussions, as far as I am aware, entered into in respect of that particularly low contract?

Deputy Patrick O'Donovan: Information on Patrick O'Donovan Zoom on Patrick O'Donovan On the national children's hospital, the Deputy will be aware from responses that have been given by the Minister for Public Expenditure and Reform that the National Paediatric Hospital Development Board sought, in advance of the contract being awarded, to apply for a derogation from the use of the standard works contract. This was established by the Government contracts committee for construction, which engaged in its work from May 2014 over a long period. Derogations are allowed in exceptional circumstances, where there can be a presentation to the Government contracts committee for construction, which is a separate entity, to indicate that the circumstances of the standard work contract would not suit the development of a particular piece of infrastructure which in this case was the national children's hospital.


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