Oireachtas Joint and Select Committees

Tuesday, 24 May 2022

Joint Oireachtas Committee on Housing, Planning and Local Government

Construction Costs in Housing: Discussion

Mr. Eddie Taaffe:

Absolutely. We have to look at what is happening on the Continent to see the standards countries there have adopted because they are a few years ahead of us in modern methods of construction. To my mind, however, the construction sector cannot do that on its own. We are a small island with a relatively small construction sector. It takes investment to do this, and there needs to be recognition of that and assistance given to the sector to grow that element.

Another issue is price variation. Anything above 15% in new contracts signed since 7 January is recoverable. It may well be that that would need to be reviewed because 15% on price variation is still quite a chunk of money on a contract.

Finally, perhaps consideration could be given to an increased level of flexibility on some procurement elements in respect of the way in which we, as a Government sector, have to procure. What I am talking about is, once we have prices in, the areas of value engineering, best and final offer and so on. Generally, we have to accept the prices we get, but perhaps we could have more flexibility post-tender to negotiate and to discuss prices and, perhaps, to ask contractors if there is any way jointly we can save money on these projects through little tweaks that do not affect the standard and give us the same result but might have a big impact on construction costs and construction time. That is the positive. The downside, going back to an earlier point, is that that requires time when it comes to appointing a contractor. There are therefore pros and cons to this, but perhaps some more flexibility in the public procurement process once tenders are received is something to be considered.

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