Refocusing public procurement
Low paid, low hour jobs are damaging Ireland’s society warns ICTU’s Macdara Doyle.
Mention of public procurement may not be what stops people in their tracks or causes large gatherings to suddenly fall silent. Yet it exerts considerable influence over the life and well-being of every citizen in this jurisdiction and plays a major role in determining working conditions across many sectors of the economy.
This annual state spend on goods and services supports up to 250,000 jobs and can amount to as much as €10 billion.
Yet how this expenditure is governed failed to attract even a single mention in the recent election campaign and is rarely an issue for public debate.
Officialdom in Ireland – namely the Office of Government Procurement (OGP) – is currently engaged in the transposition of a number of critical European Union directives that will govern how procurement operates in this jurisdiction for a number of years to come.
Up to this point the general approach to procurement adopted by authorities could be summarised as one that was fixated with price, to the exclusion of long-term social and economic cost. Thus, even when there was more flexibility within the system than was officially allowed or acknowledged, it was the bargain basement tender that tended to win out over those tenders that focused on quality and high standard delivery.
As bitter experience has taught many, lowest price and the highest quality are often mutually incompatible.
In recent years we have witnessed a scenario where a major and much welcome school building programme undertaken by the state was frequently disrupted and delayed due to ‘issues’ in the tendering process.
This led to individual projects either collapsing or facing huge delay and cost overruns. There was no one single reason behind what threatened to become a very costly debacle for the public purse, but a critical factor was the priority given to price in the tender process.
In fact it was often suggested that this prioritisation of tender price resulted in bids competing to undercut each other, to the point of unsustainability, with impossibly low costings meaning overruns became inevitable. Penny wise and pound foolish, as the pre Eurozone saying goes. Equally important is the matter of labour standards and working conditions.
Most accept the principles behind ethical trading, the idea that you should not purchase goods or services that have been produced in exploitative or inhumane conditions. Indeed, consumer boycotts based on such principles have successfully aided change and progress in different areas of the globe, with the destruction of South Africa’s apartheid regime the best example.
In that context, why should public money be used in a manner that might serve to undermine rights, labour protections and wage rates, to exert downward pressure on existing standards?The aforementioned school building programme also saw a major industrial dispute erupt, when workers refused to be designated as ‘self-employed contractors’ and demanded direct employment instead.Late last year Congress published a report that outlined how the state may have lost at least €640 million as a result of ‘bogus self-employment’ since 2007. Should it not be a key aim of public contracts and public procurement to uphold and support public policy goals?
Shouldn’t we aim to ensure that public contracts act to support decent work and jobs that allow people to properly support their families?
And the EU directives that are due to be transposed by 17 April make this entirely possible, ensuring that public procurement could, for example, have due regard for decent labour standards and proper wage rates. The key word here is ‘could.’ As always, the government has leeway in the transposition process and could choose to adopt a very narrow and minimalist approach.
Over the longer term, that could cost us all.
