Contractors who underpay workers to secure government tenders at the lowest price risk being blacklisted from six months to two years, according to a legal notice published yesterday.
During this period the guilty party will be banned from bidding on government tenders. The penalty will be imposed by a commercial sanctions tribunal of three members, which will look into the claims. This entity will be set up soon within the Finance Ministry.
The move is part of the government’s pledge to crack down on precarious employment, which is especially rife among contractors offering cleansing and security services. It is estimated that more than 100 contractors are currently engaged to offer their services within the public sector.
Prime Minister Joseph Muscat yesterday warned that the government would not hesitate to take further measures to curb such abuses.
“The small minority of employers who persist with abuse are being warned that we will keep up our resolve to combat precarious employment,” Dr Muscat warned during a news conference at Castille.
While acknowledging that abusers were clever enough to exploit potential alternative loopholes, he said it was “no joke” to be slapped with a ban precluding any participation in public procurement.
Touching on preventative measures at the government’s disposal, the Prime Minister said the next challenge would be to introduce qualitative criteria in public procurement regulations and not base adjudication solely on price.
It is ‘no joke’ to be slapped with a ban
“In this sense we have already stopped the race to the bottom as we have established minimum rates,” Dr Muscat said. He also outlined the various measures taken since March 2013, when Labour was elected with a clear mandate to address this issue. These include a minimum hourly rate of €5.78 for contractors engaged in cleansing and security services and a ban on private entities from subcontracting part of a public tender to third parties.
From the start of 2015, bidders are obliged to offer a minimum hourly rate equivalent to the basic wage for civil servants in the job.
Dr Muscat said some successes were already scored within government entities such as Arms Limited, where employees on the payroll of a private company received a pay rise to be in line with civil servants doing the same work.
Meanwhile, the government has increased the number of inspectors to carry out more frequent onsite inspections. Finance Minister Edward Scicluna said that the measure was pre-empting a European directive set to come into force in the coming months.