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Public Expenditure and Reform | Can reform in the context of public procurement produce better value for money in respect of State projects

To ask the Minister for Public Expenditure and Reform if reform in the context of public procurement can be used as a means of producing better value for money in respect of State projects; and if he will make a statement on the matter.


All public works projects that are delivered under the Exchequer-funded element of the Government’s capital plan must be procured in accordance with the provisions laid down 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. It consists of a suite of best practice guidance, standard contracts, generic template documents and procedures that cover all aspects of the delivery process of a public works project from inception to final project delivery and review to assist contracting authorities in meeting their ongoing procurement requirements.

A review of the policies and practices deployed in the procurement of public works projects commenced in March 2019 and is ongoing.  The focus of the review is on improving the delivery of construction projects in terms of quality, timely delivery and cost outcomes.  The review will deliver significant changes to the CWMF over the coming years. The review process involves 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 such as:

  • price variation;
  • risk management;
  • creating a better quality: price balance in the award of contracts;
  • adoption of BIM on public works projects;
  • liability, indemnity and insurance requirements;
  • performance evaluation;
  • encouraging collaborative working.

A high-level strategy has been developed by the Office of Government Procurement (OGP) with the Government Contracts Committee for Construction (GCCC) that will guide the implementation and will be addressed primarily through the progressive refinement and enhancement of the CWMF.  

Covid-19 impacted the review in 2020 and 2021 as resources were redeployed to address the contractual and procurement issues that arose during construction lockdown. However, progress is being made on a number of fronts.

  • The initial focus is on the engagement of consultancy services, which is aimed at driving better project definition, in order to provide greater certainty for all those engaged in the construction stage.  Overall improvement in project definition is required through establishing minimum standards for information at the different stages of a project’s development.  Work is ongoing on the detailed implementation aspects of the review of the engagement of consultancy services, which will be delivered by means of changes to the template tender documents, publication of new guidance material and exploring digital solutions.
  • A review of the price variation mechanisms used in both the CWMF consultancy and construction contracts is currently underway.  Initial research to review the inflation provisions in both the CWMF consultancy and construction contracts has been completed by consultants.  Significant increases in construction material costs is affecting live tenders and contracts. Procurement guidance for ‘live’ tenders was published in November 2021. Interim amendments to the provisions in the public works contracts to address inflation in construction materials were introduced in January 2022. Following further inflationary pressures arising out of the Russian invasion of Ukraine concerns have been raised about the ability of contractors to withstand prolongation of elevated materials prices and more recent increases in energy and fuel prices. In the interest of safeguarding the delivery of the NDP and key projects underway, a new inflation co-operation framework is being introduced for those parties engaged under a public works contract.  The framework will facilitate the parties to engage with one another on an ex gratia basis for the purpose of addressing the impacts of this most recent onset of exceptional inflation in construction materials and energy, and supply chain disruption. Consultation on broader changes is due to commence with stakeholders in 2022.
  • Building Information Modelling (BIM) has the potential to transform the processes surrounding project and data management on construction projects and can drive significant efficiencies.  The OGP is currently engaged with National Standards Authority of Ireland on preparing a national annex to the international standard (ISO) for BIM implementation and with the Build Digital Project in the development of an implementation plan for the adoption of BIM across the NDP.  A series of masterclasses is ongoing to prepare public bodies for the implementation of BIM. In 2022, external advisers will be engaged to draft contract amendments to incorporate BIM into the CWMF and to prepare template procurement documents for publication.
  • The OGP is engaging with key stakeholders on the issue of liability, indemnities and insurance and is reviewing broader aspects of the required terms in the contracts used to engage design teams and contractors.  Engagement with the insurance sector and construction industry stakeholders has also taken place on issues relating to cost increases on Professional Indemnity Insurance premiums and the reduction in cover available.  Amendments to CWMF documents and additional guidance was published in February 2022.
  • Engagement is ongoing in developing standard metrics for life cycle costing and life cycle analysis that can be applied to the evaluation of projects’ cost of use in service and full life cycle analysis, including the carbon impact of individual projects.  The OGP is liaising with the GCCC and the Irish Green Building Council in developing these metrics.  
  • The Cost Control Templates published under the CWMF are undergoing review to incorporate the International Construction Measurement Standard (ICMS).  A working group has been established and revised templates will be published in 2022. ICMS is a global standard for benchmarking and reporting of construction project cost and covers both capital and whole life costing while providing a way of presenting costs in a consistent format.
  • A review into the performance of alternative dispute resolution (ADR) provisions that were introduced in 2016 has also taken place in 2021. A final report on the review is being prepared by consultants, which will form the basis of a position paper in 2022 on ADR provisions in the public works contracts.

Together these reform processes will lead to meaningful policy change and will assist in delivering better value for money for the taxpayer in the implementation of Project Ireland 2040.

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