Dáil Éireann Debate, Tuesday - 8 December 2020
204. Deputy Seán Canney asked the Minister for Public Expenditure and Reform his plans to reform the procurement rules for public work contracts to allow the criteria for award to be the most economically advantageous; and if he will make a statement on the matter. [41089/20]
View answerPublic Procurement is governed by EU and National rules. The aim of these rules is to promote an open, competitive and non-discriminatory public procurement regime which delivers transparency and value for money outcomes.
Regulation 67 of the SI 286 of 2016 - European Union (Award of Public Authority Contracts) Regulations sets out that the most economically advantageous tender (MEAT) should be assessed on the basis of the best price-quality ratio, which should always include a price or cost element. It is important to note that the Regulations do not preclude the use of cost as the sole criterion in a MEAT award. It is for contracting authorities to determine the award criteria to identify the MEAT to meet their particular requirements in relation to the contract. The procurement directive applies to all public works contracts with a value in excess of €5.35m and construction-related services with a value in excess of €139k for Government Departments and Bodies and €214k for Local Authorities.
The general requirements for works and works-related contracts are set out in the Capital Works Management Framework (CWMF). The CWMF represents the tools that a public body must use to procure and manage the external resources necessary to deliver a public works project that is to be delivered under the Exchequer-funded element of the National Development Plan. This guidance incorporates key elements of EU legislation that have been transposed into Irish law and is complemented by circulars and guidance issued by this Department and the Office of Government Procurement.
The award criterion for works contracts (above €1m) and for the engagement of consultants under the CWMF is the Most Economically Advantageous Tender (MEAT) meeting the specified minimum criteria (if any). The MEAT is determined in accordance with the award criteria set out in the Particulars to the standard CWMF Instructions to Tenderer. The award criterion associated with the form of contract most commonly used for works below €1m is the lowest price.
Generally speaking where public works are concerned, the better defined the project requirements the greater the weighting that should be given to price. Under the CWMF, works projects that are delivered using the traditional approach are required to be well defined prior to tender. In these circumstances, it is entirely appropriate for price to be given a majority weighting. In a design and build contract, where the contractor is required to prepare the design as part of their tender submission the majority weighting should be given to quality (or technical merit). A majority weighting for quality should properly interrogate the innovation, technical achievements and durability of the solutions offered. There is a balance to be struck in deciding to award a public contract between value for money and a quality project outcome.
The management of the tendering process for a public contract is a matter for each contracting authority. It is the responsibility of each contracting authority to ensure that tenderers comply with all the requirements of the process.
A review of the policies and practices deployed in the procurement of public works projects commenced in March 2019 and is ongoing. The review is being conducted by the Office of Government Procurement (OGP) with the support of the Government Construction Contracts Committee (GCCC). The focus of the review is on improving the delivery of construction projects in terms of quality, timely delivery and cost outcomes. The initial focus of the review is on the procurement of consultancy services. Overall improvement in project definition is required – to be delivered through establishing minimum standards for information at the different stages of a project’s development.
The OGP has developed a high-level strategy with the GCCC to guide the implementation which will be addressed primarily through the progressive refinement and enhancement of the CWMF. The following objectives summarise the strategy:
The CWMF will enable the delivery of sustainable assets under the NDP by:
- Developing procurement and contracting strategies that prioritise quality solutions and support the most efficient means of delivery;
- Embedding appropriate risk management measures within the project development, procurement and construction stages;
- Deploying digital solutions throughout the project delivery stages.
The review will deliver significant changes to the CWMF over the coming years. The OGP has prepared a methodology for extensive structured engagement, both with industry stakeholders, and with the public bodies charged with the delivery of public works projects to inform the implementation of the strategy. It is planned to publish a series of position papers on a broad range of issues to foster debate and engagement on specific issues such as:
- price variation;
- risk management;
- reflecting quality in the award of contracts;
- adoption of Building Information Modelling (BIM) on public works projects;
- liability, indemnity and insurance requirements;
- performance evaluation;
- encouraging collaborative working.
Upon conclusion of the consultation period for each issue, the GCCC will prepare a recommendation for approval at the appropriate level. It is envisaged that the process of engagement will extend over the next 12 – 18 months, however where the GCCC’s recommendations are accepted they may be implemented without waiting for the entire process to conclude providing it is practicable to do so.
The onset of Covid-19 impacted on the conduct of the review both in terms of engagement with stakeholders and reassignment of internal resources in order to address the impact of the shutdown and the restart phase on the NDP.
