There is "narrow scope" for preventing private firms from bidding on public contracts - even if they have been involved in failed projects in the past - the Oireachtas has heard, writes Sarah McGuinness.

A senior official from the Department of Public Expenditure told the Public Accounts Committee yesterday that blocking someone from engaging in the public procurement process is a "serious undertaking" and requires the state to haul the company through the courts.

The department's appearance follows a litany of public expenditure scandals in recent months. Chief among those was the controversy surrounding a failed IT upgrade at the Arts Council, which resulted in a loss of €5.3 million for the Exchequer.

The project - which was meant to overhaul the body's grant management system - was beset with delays. Its budget ballooned from roughly €1.6m in 2018 to almost €6.7m last June, when the works were abandoned.

The Irish Daily Mail has subsequently revealed that one of the main companies behind the fiasco, Codec, has been involved in numerous other state contracts - some of which have also seen extensive delays and budget overruns.

These include contracts with HIQA, the Department of Agriculture and Fiosrú - which suspended all work on a new IT system with Codec six months ago.

A sum of money was paid to Codec on the beginning of the contract with Fiosrú, the value of which Fiosrú has refused to disclose.

The firm was paid a total of €1,967,278, including VAT, for its work on the Arts Council's IT system - €51,217 of which was withheld as the upgrade plunged deeper into crisis.

Sinn Féin TD Cathy Bennett repeatedly questioned how companies that are involved in failed state projects are allowed to bid for other contracts. "It is difficult to understand," she said.

David O'Sullivan, assistant secretary at the department, told Bennett that, under public procurement laws, "there is a narrow scope to exclude people under poor past prior performance.

"There has to be material failure and has to have led to damages or the contract being terminated. And that is largely [proved] through the courts, and it takes a long time. It is a serious undertaking."

He said private firms "can't be eliminated because of hearsay or because of a project failure".

He added: "There are many reasons why projects fail too. They are all not due to the supplier. There can be poor organisation, delays with internal resourcing or delays through equipment."

(Pic: Getty Images)