Wednesday, 20 September 1995
Dáil Éireann Debate
55. Mr. S. Brennan asked the Minister for Finance the interpretation put on competitive tendering by his Department in its guidelines for the award of contracts by semi-State companies; whether a specified number of tenders must always be sought and received; and whether express approvals by the board exempt normal procedures for competitive tendering. [13219/95]
56. Mr. S. Brennan asked the Minister for Finance if he will outline the breaches of his Department's guidelines for the award of semi-State contracts that have been recorded by his Department over the last five years. [13220/95]
57. Mr. S. Brennan asked the Minister for Finance the accounting officers or any other officer over the last five years who has reported breaches of semi-State guidelines for the award of semi-State contracts. [13221/95]
As the Deputy is aware, State Body Guidelines which dealt with the underlying principles which should govern relationships between Departments of State and State Bodies were issued by the then Minister for Finance on 11 March, 1992. Inter alia, these guidelines covered the issue of competitive tendering. However, prior to this, in September 1986, the Government had approved the publication of standard Government contracts procedures to be followed in the public sector — including State Bodies — in a booklet entitled An Outline of Government Contracts Procedures. This publication set out procedures for the award of public contracts and the disposal of public property and drew attention to the requirements under EU Directives and GATT obligations. The booklet was replaced in 1994 by a new Guide entitled “Public Procurement”, which updated the procedures and again emphasised the relevant obligations and requirements.
Broadly speaking the State Body Guidelines lay down general principles to be followed and do not specify the number of tenders to be sought and received; however, the Public Procurement booklet, whose principles the State bodies are also expected to comply with, indicates that not less than five firms should be invited to tender and not less than three realistic tenders received. The State Body Guidelines provide that competitive tendering should be normal procedure save in exceptional circumstances.
The Guidelines provide that, if for some compelling reason, a significant contract is awarded without competitive tendering this should only be done with the express consent of the board. In this regard “significant” means any contract in excess of £100,000 for construction work or the purchase of goods and equipment and in excess of £25,000 for financial or other professional services, from a single supplier in any one year.
State Bodies were asked, under the aforementioned Guidelines and booklets, to observe the general principles of Government contracts procedures in their purchasing, of which competitive tendering is the central pillar. The manner in which the day-to-day commercial business of these bodies is discharged is a matter for their Boards — the type of procurement procedures to be adopted in any given situation will be a matter for the board to decide in the light of the principles referred to above and would have regard to managerial and legal advice and would depend on the value and type of procurement. In addition to the Government Guidelines, in cases where the value of a contract  exceed a certain amount, a number of State Bodies are subject to certain provisions of EU Procurement Directives.
As the Deputy is also aware, the Minister for Transport, Energy and Communications has recently established a Task Force to review certain procedures in relation to, inter alia, the procurement of goods and services by the State Bodies under his aegis.
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