I thank the Deputies for giving me the opportunity to discuss the Government's position on the Second Stage of this Private Members' Bill. The Bill, brought forward by Senator Higgins and Deputy Gibney, is well intentioned. However, the priority for this Government is delivering the critical infrastructure that Ireland needs while ensuring value for money for Irish taxpayers, which this Bill could hinder and not help in delivering. The Government has concerns regarding the Bill's potential impact on the ability of the State to seek value for money in providing critical infrastructure and that it would increase the level of bureaucracy and complication in the public tendering process, ultimately creating additional regulatory burdens with little to no benefit in terms of outcomes. The Government is seeking to reduce those barriers and streamline procurement processes so projects can be delivered effectively in this country. With the current set of rules in place, according to the European scorecard 2025, Ireland is in the top three for use of price-quality ratio, with only 12% awarded on price only. The remaining 88% of tenders are awarded based on quality criteria. The Bill seeks to give further effect to Directive 2014/24/EU on public sector contracts to promote the use of social considerations and the best price-quality ratio, in relation to procurements to which the directive applies, prohibiting the award of contracts on price or cost as the sole award criterion unless the Minister makes a declaration that it is appropriate. This would require the Minister to issue guidelines on qualitative, environmental, social, human rights and equality considerations that may arise in public contracts and create a system of reporting to the Houses of the Oireachtas. I will now set out the reasons behind the Government's concerns relating to what the Bill seeks to do. The Government is undertaking an ambitious programme of reform and accelerating infrastructure with a committed spend of €275 billion on the national development plan, NDP. The associated projects in the NDP already factor quality into their tenders as determined by detailed specifications and ongoing contract management. Therefore, the current approach seeks to ensure quality while keeping value for money as paramount in the delivery of the NDP and does not require additional regulation. The Bill being proposed is similar to a scheme introduced previously in the Netherlands which reportedly increased costs by approximately 3%. Applying this to the delivery of the NDP could potentially increase costs to the taxpayer by up to €10 billion. The Bill further complicates the procurement process. It introduces inflexibility in the selection of appropriate criteria for a given competition, which has the potential to compromise value for money, particularly for standardised goods and services where it might not be needed. The Bill is also expected to create delays, given the increased risk of litigation that results from the reliance on subjective social criteria. The European Commission is in the process of reviewing the public procurement directives underpinning this Bill and there are clear signals that Directive 2014/24/EU will be repealed and a less restrictive regime put in place. As such, the legal base for the Bill would no longer apply. I will now expand further on the Government’s immediate priority, namely, delivering the critical infrastructure that we need to resolve the housing crisis. Since the Bill was put on the Order Paper, Government approved the accelerating infrastructure report and action plan. Pillar 3 of the plan, co-ordination and delivery of reform, introduces a new central co-ordination role for the Department, as envisaged by the programme for Government, and features reforms to procurement and approvals that will more effectively convert funding into outcomes. It will also build the capacity of the construction sector and enable better sequencing of major projects, ensuring that infrastructure is delivered on time, within budget and with minimal disruption. Procurement challenges are one of the key barriers the plan identifies, with lengthy timelines and complicated processes hindering our ability to deliver value for money and making procurement less competitive. Action 25 seeks to address these barriers through changes in the capital works management framework, CWMF, and improved procurement standardisation, professionalism, centralisation and training. Considerable amendments to the CWMF have been introduced to increase flexibility, including price variation, limitation of liability and indexation for inflation. Further amendments will be introduced later this year to support increases in construction sector capacity and innovation. This will be through the adoption of modern methods of construction, design contests and early collaboration. The overly adversarial nature of procurement, driven by risk transfer objectives, poses challenges to delivery. Therefore, further changes will be made to support a more collaborative approach with tenderers, involving alternative dispute resolution mechanisms and changes to the inflation framework, with the longer-term objective of a greater sharing of risk. It is essential the public service operates in a co-ordinated and effective way and delivers value-for-money and sustainable savings for taxpayers. This Bill contains several provisions that will hinder delivery of the action plan. It introduces inflexibility in the selection of appropriate criteria for a given competition and potential disproportionality in legislating for the fixed weighting of cost in assessing tenders. Additionally, and following on foot of advice from the Office of the Attorney General, the Bill contains several provisions which would be likely to increase the risk of litigation. This would significantly lengthen the procurement process and delay the delivery of critical infrastructure. This goes against the Government’s work to overcome barriers to infrastructure delivery by putting in place further barriers and strengthening the opportunities for legal challenges, which will likely increase costs to the taxpayer. The Bill proposes contracting authorities award on the basis of the most economically advantageous tender rather than price only, unless sanctioned by a Minister or Accounting Officer. While I appreciate the concerns surrounding the use of price-only in procurement processes, such a provision would be disproportionate and add to the administrative burden of buying generic commonly acquired goods and services. The European procurement directives and their transposing national instruments already permit public sector bodies to prohibit the award of contracts on the basis of price or cost only and restrict the use of price-only to certain categories of contract. The Bill misrepresents the procurement landscape. Many price-only awards are the second part of a two-stage award process, where the first stage has been an assessment of quality. The Office of the Attorney General advises that the use of a limit on the price criterion would need careful consideration in order to demonstrate that it remains within the MEAT criteria. As stated above, EU directive 2014/24 expressly permits member states to restrict the use of price to certain categories of contracts or prohibit the use of price or cost only as the sole award criterion for public contracts. However, in contrast, the directives do not expressly permit member states to specify a target quality ratio for specified projects. Recital 89 of EU Directive 2014/24 might also be seen as against permitting this proposal. These recitals emphasise the freedom of the contracting authority to select the economically best tender. Recital 89 of EU Directive 2014/24 states: This can be obtained by using the terminology ‘most economically advantageous tender’ as the overriding concept since all winning tenders should finally be chosen in accordance with what the individual contracting authority considers to be the economically best solution among those offered... Regarding implications arising from imposing additional reporting obligations on contracting authorities related to their function as public bodies pursuant to section 42 of the Irish Human Rights and Equality Commission Act 2014, contracting authorities will be required to record steps taken to comply with section 42 of the Act. In particular, information relating to the preparation, allocation and granting of contracts will need to be included in the Article 84 report. Reports to the Minister on the contracting authority's performance on these matters will also be required, with the Minister given the role of designating appropriate forms for such returns. There do not appear to be any restrictions in the procurement directives to prevent obligations of this nature being imposed on contracting authorities. Further, it is noted this would be a clear, unambiguous obligation imposed by primary legislation. Additionally, mandating how a contracting authority should conduct a procurement process should be avoided, especially via as blunt an instrument as primary legislation. Contracting authorities need to be free to decide the best process for them, and any legislation should facilitate that. This is also true for construction projects, where quality is largely achieved through good design and specification before the procurement process and in the subsequent contract management. The Government has used policy circulars and guidance on these matters to recognise the need for flexibility and the specific circumstances of each individual procurement. While quality must be afforded due consideration in tendering processes, this must be done in the context of available budgets and in a proportionate manner. It has to be acknowledged that public procurement facilitates the State to be in a position to provide much-needed public services in a sustainable manner, and reducing the public buyers’ choices for assessing tenders could impact on the sustainability of such service provision. It should also be noted that Ireland scores highly among EU member states in the use of price-quality ratio. In the last round of reporting available, the European Commission’s Single Market and competitiveness scorecard 2025 shows that in Ireland the proportion of price-only awards halved from 2020 to 2022, falling from 24% to 12%. Ireland had the third-lowest incidence of price-only awards. As noted, this figure of 12% includes those awards for which quality was assessed at an earlier stage. Therefore, the Bill would introduce complications and barriers to infrastructure delivery for a problem which does not really exist in Ireland, and in respect of which improvements are already happening. Complementary to and supporting the work on accelerating infrastructure, a key priority for the Department is the programme for Government commitment to value for money in State spending and to review the public procurement process to make it more transparent and work to ensure greater participation from SMEs in Ireland. The Department is in the final stage of drafting the national public procurement strategy to set out the strategic direction of public procurement for the next five years. A key focus of the strategy is advancing socially responsible public procurement, supporting sustainable public procurement and the UN sustainable development goals. A public consultation for the strategy was launched in March 2025 and ran until May 2025. This included three roadshows in Dublin, Cork and Athlone, which were attended by a variety of stakeholders, including public bodies, industry bodies, utility suppliers, social enterprises and a dedicated supplier and SME webinar. Senator Alice Mary Higgins, this Bill’s author, was supportive of and engaged with the consultation for the strategy. The strategy is a more appropriate policy instrument to progress the well-intentioned objectives in the Bill. As mentioned, the programme for Government seeks to ensure greater participation from SMEs in public procurement through the SME advisory group, which I chair and which meets quarterly. My Department engages directly with SME representative bodies. The Bill contradicts the Government’s commitment to support Irish enterprises, in particular SMEs and small family businesses, because it has the potential to compromise value for money, particularly for standardised and commodified goods and services, adding undue weight to quality, adding undue burdens for SMEs, potentially reducing the numbers of bidders, and overlooking that quality may also be addressed in selection criteria and technical specifications. The European Commission’s focus regarding procurement is on the simplification of the current complex legal code and a reorientation of procurement to act as tool for steering investment and increasing competitiveness. In seeking to deliver this, it began an evaluation of the procurement directives in December 2024. Officials from my Department have engaged in this evaluation process at all levels and have facilitated the process through stakeholder workshops, targeted consultation and direct engagement at Commission level to best represent Ireland’s interests.

Sentiment score: 0.32

I thank everyone for their contribution. Some issues were raised and I will certainly bring them back to my Department. The Bill pre-empts the European Commission’s revision of the 2014 directive. Therefore, it seems the entire Bill is premature. The Commission is in the process of reviewing the public procurement directives. There are clear signals that EU Directive No. 2014/24 will be repealed and a less restrictive regime will be put in place. As such, the legal basis for several of these provisions will no longer apply. After careful consideration, the Government has decided to oppose the Bill because it could undermine the current ambition, which is delivering the critical infrastructure that Ireland needs and ensuring value for money for Irish taxpayers. I again thank the speakers who contributed. We all agree that the State should act in the public interest. The intentions behind the Bill for the pursuit of quality as much as price are laudable. However, the Bill would likely have a negative impact on the ability of the State to seek value for money or deliver on the Minister's accelerating infrastructure report and action plan commitments. It introduces inflexibility in the selection of appropriate criteria for a given competition and potential disproportionality in legislating for the fixed weighting of cost in assessing tenders, notwithstanding its inconsistency with the directives. As the Deputy rightly stated, an evaluation of the cost increase associated with civil procedures in the Netherlands was estimated at 3%. Applying the metric to the national development plan would result in an increase of over €10 billion. This would cancel out the €10 billion equity funding to which the Government has committed, with major energy, water and transport projects. As mentioned, the proportion of price-only awards in Ireland halved from 2020 to 2022, falling from 24% to 12% in 2023. As of 2025, Ireland is third in the European Union for the lowest use of price-only award criteria. The Bill cannot help but contradict the Government's commitment to supporting Irish enterprise, in particular SMEs and small family businesses, because it has the potential to compromise value for money, particularly for standardised and commodotised goods and services, adding undue weight to quality and adding undue burdens for SMEs, potentially reducing the number of bidders and overlooking the fact that quality may also be addressed in selection criteria and technical specifications. Work that will impact reporting requirements, e-forms and the public procurement data project is already under way in the European Commission, as is the revision of public procurement directives. Therefore, the Bill may also introduce conflicts with the current EU legislative framework. There are clear signals that directive 2014/24/EU will be repealed and, as I said, a less restrictive regime will be put in place. As such, the legal basis for several of these provisions would no longer apply. For these reasons, the Government opposes the Bill. I thank all the contributors for their helpful advice. I look forward to liaising and working with them in the coming weeks and months.

Sentiment score: 0.18