Thursday, 18 April 2019

Questions (13)

Joan Burton


13. Deputy Joan Burton asked the Minister for Public Expenditure and Reform his plans to move to a fixed price costing system in respect of public contracts in order to secure greater levels of certainty in respect of the profiling of costs for public projects; and if he will make a statement on the matter. [18019/19]

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Written answers (Question to Public)

The majority of public works projects are currently delivered using fixed price, lump sum contracts tendered on a competitive basis, with clear risk allocation set out in the tender documents.  These contracts represent the default tendering position for projects delivered under the Exchequer-funded element of the National Development Plan.  

In line with Circular 33/06 in exceptional and rare circumstances, consideration can be given to amendments to the forms of contracts which should be submitted to the Government Construction Contracts Committee (GCCC) in advance for consideration and approval, as appropriate.  A total of 12 derogations have been given by the GCCC since 2011 in recognition of the particular circumstances in which they are to be used.

Reviews of two key elements of cost oversight on the NDP are also currently under way. My Department is reviewing the Public Spending Code which is the set of rules, procedures, and guidance to ensure Value for Money in public expenditure across the Irish Public Service. The Capital Works Management Framework, which represents the procedures and conditions of contract that must be used in the engagement of consultants and contractors on public works projects, is being reviewed by the Office of Government Procurement. 

The review of procurement policy for public works projects will deliver significant changes to the CWMF over the coming years. It will involve extensive engagement both with industry stakeholders and with the public bodies charged with the delivery of public works projects on a broad range of issues and will extend over the next 12 – 18 months.

Preliminary engagement and scoping has already been undertaken and, following further consultation, a range of position papers will be prepared throughout 2019 and 2020 on issues that are impacting on project delivery.  These papers will be published to facilitate wider engagement with all those working on the delivery of public works projects.

A review of the public works contract carried out in 2014 noted that the successful outcome of a project is placed in considerable jeopardy by allowing the market to price the risk represented by inadequate definition in a competitive tender.

Therefore quality of information and enhanced risk management throughout a project’s lifecycle will inform all aspects of the review.  Opportunities to further deploy digital technologies, such as Building Information Modelling (BIM), will also be explored with the aim of improving workflows and information management for public bodies, contractors and consultants.