You have to hand it to the director general of the Chamber of Small and Medium Enterprises – GRTU, Vince Farrugia: when you read OPM circular 12 out of context, it sounded alarming.
The circular, dated July 1, states that – without exception – all contracts awarded by the Department of Contracts, government departments and public sector organisations should include a clause saying that services provided will not be subcontracted to third parties.
But there is a context. The circular was issued in an attempt to deal with the very real issue of precarious work.
The Government wants to lead by example and it wanted to use its considerable ‘purchasing’ clout to make sure it was not encouraging exploitation.
The aim was simple: there are some contracts, especially service ones, that are particularly prone to abuse. A company would submit a very cheap bid, say for cleaning or security services, which was clearly unsustainable if it were to be provided through properly-employed staff working for proper wages under usual conditions. It would then subcontract the work to people desperate for money, who would be willing to accept to work for below minimum wage, for example.
Circular 12 was very clearly aimed at curbing this abuse. It insists on an inspection of the employment contracts, pay slips, time sheets etc of the people that will be providing the service.
The context within which the circular criticised by the GRTU was written could not be viewed in isolation but, rather, in the wider scope of contracting. Had it stood unchallenged, Mr Farrugia’s rant about “the most negative anti self-employed action on record” and threats that the GRTU would fight this all the way up to the EU would have been justified. Luckily, though, this point had already been spotted and brought up in the Malta Council for Social and Economic Development, resulting in an update to the circular. According to the Ministry for Social Dialogue, Consumer Affairs and Civil Liberties, Mr Farrugia was not at the meetings where this was discussed.
All is well that ends well. However, in this case, the outcome is even better as it now ensures a level of transparency that extends beyond precarious employment.
When submitting a tender, the bidder will be required to list upfront the subcontractors and provide all the employment details and so on, as envisaged in circular 12. What that means is that the client knows exactly who he is getting when he awards the contract.
Such kind of transparency brings with it accountability. If we commission a carpenter to do work in our home, it is - at least, in most cases - because s/he comes with a personal recommendation or because s/he has previously provided good work. So will we be happy if s/he is able to subcontract the work – without our authorisation or knowledge – to another woodworker with dubious experience, credentials or standards?
If this principle makes obvious sense to any home owner, then why should it not be acceptable when contracting for millions of euros worth of work to be paid for from taxpayers’ money?
By specifying who the subcontractors are, the bidder is, in essence, accepting responsibility for their work as if it were his/her own and if there are problems s/he is the one that has to face the music.
This is not rocket science and it is not about making it impossible for small businesses to get their share of government work. It is about transparency, accountability and ensuring good corporate social responsibility. Heaven knows that we need a lot more of it.