Procurement Policy

Sub-Threshold Procurement

The Code of Practice for the Governance of State Bodies includes, provides principles for procurement by State bodies below EU procurement rule thresholds. It applies to both State and commercial State bodies. It is not legally binding as such.

Tendering should be the standard procedure in procurement by State bodies. Each State body must ensure that a procedure is implemented below EU procurement rules thresholds.

Procurement guidelines in the Department of Finance Public Procurement Booklet 1994 (known as the Green Book) in relation to tendering should be applied. Responsibility for compliance lies with the board and management of the relevant State body of the relevant Department.

The Green Book Ministerial circulars have broad principles and do not have the direct force of law. However, principles of legitimate expectation may apply. See generally the sections on administrative law and legitimate expectations.

The Green Book provides for procedures that ought to be followed by government departments, local and regional authorities and other State bodies in the award of public sector contracts. This includes the acquisition, letting and disposal of public property.

Green Book Principles

The Green Book principles are based on the EU Procurement Directives and the World Trade Organization Agreement on Public and Governmental Purchasing.

The EU procurement rules should be followed where the project is wholly or partly financed by EU funds.

General EU law principles of equality, transparency, non-discrimination, facilitation of free movement of services and free movement of goods must be respected as a matter of EU and domestic law regardless of thresholds. This may include an obligation to publicise contracts to ensure adequate competition notwithstanding that they fall below the threshold level. A sufficient degree of advertising necessary to ensure competition is required.

The Green Book was updated following EU developments and a new edition published by the National Public Procurement Policy Unit, Department of Finance in 2004. Public Procurement Guidelines, competitive process supplies and services. The 2004 Guidelines provide more detailed guidance on the competitive tender process below EU thresholds.

Forms of Contract

As part of the reform of public sector construction procurement, reforms were instituted with a view to drafting new standard conditions of engagement for construction consultants and new standard contracts for public contracts.

New forms of construction contract for public works have been introduced, including

• building works designed by the employer,
• building works designed by the Contractor;
• civil engineering works designed by the employer;
• civil engineering works designed by the Contractor;
• minor civil engineering and building works designed by the employer.

The new contracts have been controversial and have sought to shift certain risks onto the contractor and industry.

Scope of Guidelines

The 2004 Guidelines apply to all public sector bodies, including government departments, local and regional authorities and health authorities. They do not have a direct legal effect.

It is a basic principle of procurement that competitive tendering should be used unless exceptional circumstances apply. In such exceptional circumstances, the approval of the Government Contracts Committee must be obtained. The Government Contracts Committee consists of officers of a number of departments involved in purchasing, construction, and procurement.

Consent is not always required for not holding a tender procedure. A Department of Finance circular contemplates delegation of the power to make procurement decisions within central government including the decision not to hold a competitive tendering process without GCC consent. Authorities and departments may evolve the relevant procedures.

Process & Principles

The 2004 Guidelines require that public procurement procedure should be undertaken honestly, fairly and in a manner that secures best value for public money. Contracting authorities must be cost-effective and efficient in use of resources and must uphold high standards of probity and integrity.

The principles of equal treatment, non-discrimination, mutual recognition, proportionality, transparency, freedom to provide services and freedom to establish under EU law, must be observed in the procurement process.

Contracting authorities must ensure that staff involved in the procedure are familiar with the relevant EU and international laws and should safeguard against improper and unethical practices by separating functions within the procurement cycle.

Ordering and receipt of goods should be distinct, for example, from payment. The appropriate contracting arrangement should be established in order to ensure efficient and cost-effective delivery of recurring supplies and services. One-off purchases should be minimised.

In relation to a public procurement process that involves a pilot stage, it should be conducted in a manner that provides for the identification of a range of acceptable solutions or options. The Department should be cautious in developing relationships with a particular party which might hinder a fair and open process or limit competition.

When dealing with a sole supplier, service provider, or contractor, the guidelines advise that there should be arrangements to ensure best value for money, is negotiated and procured. Open-ended arrangements with exclusive distributors and suppliers should be avoided.Better value for money may be achieved by obtaining tenders from other suppliers, service providers and contractors outside the region where the supplier is the exclusive distributor.

If a contracting authority is refused supplies on the basis of an exclusive supplier supplying goods, the matter should be within the contracting authority’s area, the matter should be referred to the Competition Authority.

Making the Award

Conflicts of interest should be considered in tendering procedures and appropriate actions taken to avoid them. Care should be taken to ensure that project specifications and criteria are as open and generic as possible, in order to avoid favouring one solution or one party.

Prior to making a contract award, an authority should ensure that tenderers have regard to statutory provisions in relation to employment, industrial relations, minimum wage, health and safety issues and sectoral agreements. Tender documents should make specific reference to the requirements to comply with these provisions.

Any uncompetitive practices in tendering such as collusive tendering should be reported to the Competition Authority, now the Competition and Consumer Protection Commission. Candidates/tenderers who have been involved in organised crime, fraud, corruption or money laundering must be excluded.

All tenderers must have a tax clearance certificate as set out in the Department of Finance Circular regarding public service contractors.

Tenderers should be invited to express their tender, exclusive of VAT. The application of the VAT rules should not distort competition.

Disposal of State Assets

In the case of the disposal or access to assets owned by the authority, the Code of Practice for the Governance of State Bodies 2001 and amended in 2009 provides that standard practice on such disposal and access of assets with an anticipated value above €150,000 should be by auction or by competitive tendering process, other than in exceptional circumstances. Such exceptional circumstances might comprise a sale to charity.

The methods used should be transparent and be such as are likely to achieve a fair market-related price. The consent of the Minister for Finance is required for certain property transactions.