Mr. John Hennebry:

We thank the Chairman and the members of the committee for their invitation and the opportunity to present our concerns. Unfortunately, the forum does not permit all the subcontractors to be here so we take this opportunity to thank all those involved for their work and support to date.

As members will be aware, the collapse of Carillion, which was a joint partner in the Inspired Spaces consortium delivering the public private partnership, PPP, bundle 5 schools, and the subsequent liquidation of the builder, Sammon Contracting Ireland, have ensured that these building works will now be completed by a new main building contractor.

Our group represents a number of specialist subcontractors who were engaged by Sammon to deliver the buildings. We began meeting informally to share information when it became clear to us that there were growing financial issues with both Carillion and Sammon.

We have been invited here to give our input in regard to irregularities in the certification processes for the school projects. We hope to outline the context and scope of these concerns and the potential implications for the delivery of the schools. Further to that, we will also address more wide-ranging issues regarding PPPs, the delivery of the PPP company and the remit of the NDFA, on which the committee has previously heard evidence.

It has become clear that for several of these projects the assigned certifier intends to certify large portions of works undertaken by specialist subcontractors without providing relevant documentary evidence, which has become routine, using the building control amendment regulations, BCAR, certification system. This approach has become accepted practice due to building control guidance and project precedent. These precedents include all previous PPP schemes and standard building contracts that I and other subcontractors have been part of; we know that is the standard.

We strongly question the ability of any certifier to ensure that all relevant building regulations have been met, that the works have been carried out as designed, and that all the building products are compliant without the support of ancillary certification from the specialist subcontractors who carried out the works.

In essence, these certifiers intend to move well outside the established precedent of evidence-based submissions and ancillary certification. This has wide-ranging potential for implications for the health and safety of the eventual occupants, who in these specific cases will be mostly children and young adults.

It is important to note that the current building control management systems were introduced after several high-profile failures. The problems were eventually recognised to be partly due to systemic failures, which the current system was designed to address. One high profile example was the evacuation of the Priory Hall apartments in Donaghmede in 2011 due to the dangers presented by substandard works and lack of inspections.

The current BCAR system relies on an evidence-based approach, ensuring there is a clear record of works being completed to the required standards, and to meet the design specification. In essence, it becomes a risk management strategy, overseen by the assigned certifier who assumes the legal responsibility simply to collate this information.

It is clearly stated in the code of practice for certifiers that the role of the certifier does not include responsibility for the certification of any builder. That is why the BCAR system is relied upon and begs the question: if ancillary certification from specialist subcontractors was a requirement of the original contract with us, Sammon Contracting Ireland and building control approval, what has changed?

The proposed approach by the assigned certifier would be similar to the historical laissez-faire attitude to building control compliance, something the current systems and legislation were specifically put in place to avoid. Committee members will be in no doubt about the headline issues such as structure, fire safety and environmental performance being regulated by building control legislation but that regulation also extends to virtually every element of building works, for example, technical guidance document D.

Our group comprises contractors specialising in many different areas. We are able and willing to demonstrate in detail, if required, numerous building elements where it is extremely difficult to see how certification can be achieved without our support. Most of these arguments are technical in nature, relating to the specifications and performance issues of products and installations.

With regard to some issues, for example, CE marking of the structural steel elements that hold up the buildings or various elements of floor covering systems, it is impossible for any third party to provide certification. As we have said, these issues with the certification of the building could also have a knock-on effect on the contractual arrangements between the State and the NDFA and the delivery consortium. Perhaps more important, the risks will have real-world effects on the students who use the facilities should they be unavailable, which could affect the value delivered by the projects considerably.

The potential for delay in building control certification could lead to the current temporary arrangements for the affected schools having to continue for an unknown timescale. Should there be challenges to the final certification of the schools, occupation and use of the buildings could be further delayed. Ultimately, should certification be granted and subsequently removed, the buildings occupants would have to leave and services re-sited.

In these circumstances, it has been made clear by the NDFA that the financial risk falls to the PPP company rather than the State. This is true in that the facilities would be unavailable and thus penalties applied, but it appears that the consequences have been somewhat overlooked. In this case, it would mean that facilities are not available to students. It is difficult to argue that risk transfer and value for money are working as intended if students are not in their places of study. This is especially true should there be any widespread failure of building elements or systems due to inappropriate certification leading to longer periods of unavailability, especially considering that the sites have been unattended for several months.

The PPP contracts allow for deductions in payments should facilities or services not be available. This seems reasonable in smaller instances, for example, classrooms not being available for an afternoon or even several days due to a leaking pipe. It does not seem to be designed to allow for the loss of an entire school which, considering current proposals and our concerns around the law regarding certification, is a distinct possibility.

As we have no contractual arrangements directly with the NDFA, we also hope to use this forum to get clarification on several points. The first is that whether this type of potential large-scale failure of service and facilities has been examined in any risk analysis of the projects. We also question the ability of the PPP company and the certifier to demonstrate that the original specification has been met. Design and construction changes at all stages had to be shown by subcontractors to whom I have spoken to meet specifications. We know of numerous examples that can be provided whereby changes to design elements have occurred. Without the support of the subcontractors and manufacturers involved, these changes cannot be reliably shown to meet the specification originally set out.

In previous evidence to the committee, the NDFA has also referred to independent advice in regard to building control and specification issues. Should it confirm if this advice is also provided by the assigned certifier? While we do not intend to question the professional integrity of any persons, it seems counter-intuitive that a party employed by the PPP company could be seen to offer independent advice to the client or the NDFA.

While the NDFA has been clear that it does not have any responsibility regarding payments to subcontractors, it seems that meeting building specification falls strongly under its remit. We would ask for further detail on how it intends to ensure that the full specification is met.

Another issue we would like to raise in regard to the collapse of Sammon is that of retention moneys. Many subcontractors have completed works on previous Sammon publicly financed projects, met all necessary standards and agreed final accounts for their work. They have been paid for their contract but they have not been paid in full. A portion of the final contract sum is retained during the liabilities and defects period. In some cases, these sums are substantial. These moneys are now due and we believe are held by the State.

As Sammon does not exist, the contracts cannot be completed, leaving contractors out of pocket yet again. To our knowledge, no contractual arrangements exist to recover these payments, which are plainly owed to contractors as retained moneys. Can the NDFA comment on this, or is it again outside its remit?

Considering all the issues which have been raised, we are also forced to question the PPP model more generally. A main stated aim is the transfer of risk to the private sector. We point out that in this case the risks have been transferred back to Irish citizens and businesses through a series of holding companies and funds. It is they who have suffered considerable financial damage and personal stress due to this collapse, again bringing the real-world implications of risk transfer into sharp focus.

There is a huge issue of fairness which seems to have been overlooked when designing the PPP contracts. The NDFA has oversight of finances until the point where it truly matters, when paying those who carry out the works. We are in a situation where students will be using buildings and equipment that have not been paid for. This is in no way morally acceptable.

It was acknowledged that cherry picking occurs from subcontractors, in that certain specialties are paid to provide certification. Again, this is morally wrong. Some contractors do not have the option of withholding certification, and it would be reprehensible should they not also be paid for work carried out.

As a group we are ready and willing to engage constructively to resolve these issues. The NDFA has produced a detailed briefing paper regarding payments to Sammon subcontractors for the committee. We ask the committee to ensure the issues raised

today are clarified in a similar manner.