Mr. Robert Watt:

I do not think so. I was not involved in the selection process and, as the Deputy knows, I am not involved with the sanctioning agency or authority, but I understand BAM's tender was lower than others. There is a variety of reasons for the escalation in costs. These relate to the bill of quantities, the design scope, and simulations of value engineering. Debate will take place about how fault is apportioned between the different players, but it is not the case that this is all BAM's problem. That is clearly not the case. There might be issues there in respect of the value savings. I have not thought about it in those terms but I do not think it is as straightforward as that.

Issues around abnormally low tenders have been raised. That raises a whole variety of questions. If, for example, we were building a motorway and a tender came in that was €100 million lower than the second cheapest tender and it became apparent that, for some reason, the National Transport Authority, NTA, had decided not to go with that lowest tender, the Committee of Public Accounts and everybody else would have the NTA in and would be saying that it was an absolute disgrace that the lowest tender was not picked. How does one construct a process which ensures that people do not come in low and then fight for increases? That is the issue. The way to stop that is to have the best-quality information. As Mr. O'Brien pointed out to me repeatedly, the best information possible and very clear and detailed designs will ensure that, when it comes down to it, there will not be that level of dispute. If the design is specified one will of course have the normal adversarial discussions, because contractors try to maximise the benefit to themselves, but one will not have the type of issues that can lead to significant problems with delivery on budget.

I am getting there in a roundabout way but, on the issue of abnormally low tenders, one could debate - and we have had these debates - whether one should give top marks for bidding close to the median price. There is, however, then a danger that everybody will try to guess the median price and will cluster around it. One will then not have the type of competition one wants. There has been discussion on changing the weighting. It has been suggested that less weight should be given to price and more to non-price factors. However, if one is building a school, a school is a school. What are the factors that will enable one to determine the winning bid? All those tendering will say that they will build a school. The factor on which a decision is made is the price. Can a competition be constructed that ensures that non-price factors are significant? Can other criteria be introduced into the system?

There a big policy issue with respect to abnormally low tenders, but I do not have the solution. No solutions are immediately obvious or clear from our perspective.