Oireachtas Joint and Select Committees

Thursday, 7 March 2019

Public Accounts Committee

Oversight and Implementation of Capital Projects and the Role of Public Officials on State Boards: Department of Public Expenditure and Reform and the Office of Government Procurement

9:00 am

Mr. David O'Brien:

Generally speaking, where prices come in and there is a difference, the contracting authority will look at those prices. Because one has a price breakdown, one is looking to see where that low price might be. Construction contracts and their pricing are inordinately complex. There will not be an item suggesting 300 individuals will be working on this site and the resulting labour cost will be a certain amount. All of the costs are linked into work elements of the job. There is a degree of forensics required and the contractors are encouraged, through the process, to drive value for money. That is partially why we have the competitive process. It is to ensure we are getting the best possible price. The Deputy is absolutely right. If the price is determined to be abnormally low, then the contracting authority has an obligation to investigate, raise issues, seek clarification and reach its conclusions. If the contracting authority is then of the view that the price is abnormally low, it may reject it but is not obliged to do so. It is only obliged to reject the tender where it can be determined that the price is abnormally low or where there is a breach in labour, environmental or social security issues.

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