Tuesday, 23 July 2019

Questions (282)

Micheál Martin


282. Deputy Micheál Martin asked the Minister for Public Expenditure and Reform the reviews carried out by his Department on the procurement process on major capital projects in the past five years; and if he will make a statement on the matter. [31839/19]

View answer

Written answers (Question to Public)

Reviews of two key elements of cost oversight on the NDP are 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 ("CWMF") is the structure that has been developed to deliver the Government’s objectives in relation to public sector construction procurement reform. It consists of a suite of best practice guidance, standard contracts and generic template documents that must be used on all projects that are to be delivered under the Exchequer-funded element of the National Development Plan ("NDP"). It is managed by the Office of Government Procurement (“OGP”) in consultation with the Government Contracts Committee for Construction (“GCCC”).

The performance of a key component of the CWMF; the public works contract, was reviewed in 2014 and a series of recommendations that apply to the conditions of contract have been implemented since 2016:

- Publication of the amended forms of public works contract aimed at rebalancing risk transferred to tendering main contractors;

- Introduction of a means of directly tendering specialist works to be undertaken as a sub-contract; and

- Introduction of new alternative dispute resolution mechanisms to aid swift and efficient resolution of disputes.

The interim amendments were focused on:

- Rebalancing the risk that was habitually transferred to building contractors in recognition of the different economic environment and trading conditions that the construction industry faced;

- Reducing the proportion of the contract value that the main contractor is tendering upon; and

- Reducing the recourse to the costly and time-consuming dispute resolution procedures provided in the contracts.

That review prompted the OGP to undertake a broader review of the procurement of public works projects in order to develop the next generation of the CWMF.

A set of objectives have been developed to manage the review process which will permit a progressive refinement of the CWMF rather than awaiting the completion of the entire work programme prior to implementation. Enhanced risk management throughout a project’s lifecycle and quality of information will inform all aspects of the work programme.

Consultation has already commenced with industry and the public bodies charged with the delivery of public works projects on a broad range of issues that are impacting on the successful and timely delivery of projects. These are wide ranging and warrant careful consideration and cover areas such as:

- price variation;

- risk management;

- creating a better quality : price balance in the award of contracts;

- adoption of BIM (“Building Information Modelling”) on public works projects;

- liability, indemnity and insurance requirements;

- performance evaluation;

- encouraging collaborative working.

It is proposed to publish a range of position papers throughout 2019 and 2020 on these and other issues and invite submissions from interested parties. Upon conclusion of the consultation process recommendations will be prepared by the OGP on the measures necessary to address any shortcomings identified.

The programme commenced with a focus on the early stages of a project’s development. A position paper was published in May on the engagement of the consultant technical professionals upon which submissions have been received. The paper focusses on improving the manner in which consultants are engaged to provide expert advice to contracting authorities on matters such as design, cost estimating, project management, procurement and contract administration.

This review 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.