Dáil Éireann Debate, Thursday - 4 July 2013
124. Deputy Éamon Ó Cuív asked the Minister for Education and Skills the number of projects approved for funding by his Department conditional on a bond being produced from a builder; the amount of the default by builders where such bonds were in place; the amount recovered through the use of bonds in such cases; and if he will make a statement on the matter. [32717/13]
Amharc ar fhreagraThe Department of Public Expenditure and Reform (D/PER) has responsibility for implementing national policy on public procurement, particularly in relation to construction procurement. Capital projects funded by my Department are administered in line with the guidance issued by D/PER under the Capital Works Management Framework. Bonds are generally required for projects with an estimated value in excess of €500,000 (including VAT) and most major building projects fall into this category. Smaller projects below €500,000 generally do not require a performance bond due to the nature of those projects i.e. short-term, lower risk, cost of obtaining bond versus contract size, availability of bonding facilities in the market for small value projects and barrier to entry issues for new entrants or SME's. The bond is used to cover costs (up to the value of the bond) that would otherwise accrue to the Employer (i.e. the Department, School, VEC etc.) on foot of a contractor's failure to complete the works. Negotiations are ongoing with regard to a number of major building projects where the contractor became insolvent in the past 3 years and in some cases the full cost of re-tendering and completion of the works is not yet known. The Deputy will appreciate that it is not possible to release commercially sensitive cost information which is currently the subject of negotiations. To do so would undermine the Department's position with regard to such negotiations.
