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Good Practice
Ireland’s Health Service Executive has power to improve transparency

Our intern and reporter Robbie Pyburn highlights the details of a recent article in Global Legal Post on the lack of transparency in public healthcare tenders in Ireland, and the need for an improved process.

Last month the Irish Government took a step towards a more transparent healthcare procurement process by announcing that the winners of public sector contracts should be published. However, more could be done by The Health Service Executive (HSE) to ensure the process is clearer for tenders, according to an interesting Global Legal Post by TenderScout CEO Tony Corrigan and Mangan O Beirne partner Alan Wallace.

HSE has a massive influence on public procurement processes in Ireland and makes up more than 40 percent of the public market. Just last year more than 7,000 public sector contracts were published in Ireland, worth a combined total of €9 billion. HSE accounted for around €4 billion of this.

With many of HSE’s contracts exceeding a few million euros, companies have a lot to gain by bidding for a contract. However, they are given very little information about who has won the contract and why, and so some seek High Court action to challenge the HSE procurement process.  The downside of course is that taking action through a court is both difficult and expensive. HSE is rarely challenged because many of its tender competitions are collapsed if court action is taken, and the legal costs alone would not be worth the effort for suppliers. As a result, there have only been two major procurement cases in the Republic of Ireland against HSE in the past two years.

There may, however, be other factors to blame. While the EU Remedies Directive is meant to apply to all Irish tenders, there are certain types of service contract, such as legal and health, where EU and Irish procurement rules don’t fully apply. Because of this, those bidding for contracts in these services may not have the right to challenge.

In addition, because of the format of standardised documentation, terms and conditions, and award letters, suppliers are given insufficient information to use if they do wish to make a challenge. They must also make a legal challenge within 30 days of becoming aware that there are grounds, and by that time the procurement process may have already begun. If a High Court Judge orders that the challenger must provide additional information or documents, the contracting authority could argue that the bidder used information discovered outside of the 30-day time limit.

High Court Judges are also often reluctant to get involved with the evaluation process as this duty lies with Professional Evaluation Groups, which are made up of HSE Consultants and/or civil servants. Unless there is an “obvious manifest error,” High Court Judges will refuse to review scoring of tenders. With very influential public servants in charge of scoring tenders, companies are often reluctant to challenge a decision for fear that they will restrict their own future opportunities from HSE and tarnish their reputation.

The Global Legal Post article suggests a few solutions to make the HSE process more transparent and fair for tenders by introducing a commercial mediation clause in its terms and conditions. It suggests the HSE could suspend the award process for around six weeks if there was a challenge and nominate an independent expert to oversee mediation. Insurance companies could insure the tender process, meaning that challengers’ legal fees would be covered. If the state and tenderers paid an upfront premium for each tender, the HSE would not have to spend state funds in courts.

In order to increase transparency, the Office of Government Procurement (OGP) which oversees all procurement in the Irish Republic, could make available all aspects of the procurement process from start to end, and include evaluation of bids, on the e-tenders portal. Such changes would help suppliers understand the evaluation process, and benefit the public sector by ensuring higher quality with more compliant bids. As the largest procurer in the Republic of Ireland, the HSE has the influence to lead on this kind of changes.

This seems like a move Paul Quinn and his team at the OGP should be looking at. Greater transparency could have been a relatively “quick win” for the government’s Chief Procurement Officer, now coming up to two years in the job. But there is still time to mark that up as one of his achievements.