Oireachtas Joint and Select Committees

Wednesday, 16 January 2019

Joint Oireachtas Committee on Health

National Children’s Hospital: National Paediatric Hospital Development Board

Mr. Tom Costello:

On the question of a fair price or the contractors abusing their position, which they could not have done in any case as they did not have an entitlement to the contract afterwards as Mr. Pollock has said, the procedures were clearly set down on how to get from stage one to stage two. As I mentioned, the contractors and the design team worked together to develop the design to completion and to remove the risk because risk ultimately comes back to the client.

We are pleased to see that the HSE has commissioned a review of the stage two process and the determination of the final cost. That is due to start next week and will be carried out over an eight-week period. That is another level of due diligence that will happen on top of the due diligence we have done ourselves.

In evaluating the tenders our quantity surveyors go through the bill of quantities line by line for every item. They carry out an analysis, in this case across the four bidders, to see if there are any outliers in costs, percentage add-ons or whatever. That is why the process took a long time, from October 2016 when the bids went in to the final award in February 2017. Before the contractors know where they are placed, there is an opportunity to seek clarifications. A very detailed questionnaire goes back from the quantity surveyor to each of the four bidders seeking a document clarifying perceptions. For instance, if an item does not have a price, it will clarify whether the price is deemed to be zero. There is a due diligence process that goes on around that.

There was a very robust process to make sure that at the end of the day they were in line. In the case of the lowest bidder, because it was very competitive, its tender naturally got a lot of scrutiny to make sure there were no gaps in it. If there were gaps, they were clarified to make sure that as we went on to stage two, the information gathered in stage one supported the proper development of a final price.

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