Mr. Derek Tierney:

Maybe if I step back a bit to the genesis of the contract and recalling my own notes, the procurement process for the NCH contract began in I think mid-June 2016 but there was a procurement sub-group established with members of the development board, HSE estates and the Government's contract committee, which is the central contract policymaker within the Department of Public Expenditure and Reform. They looked at leveraging lessons learnt in the context of the UK. At that time there were lessons learnt from guidance issued by the UK Cabinet Office through its Government construction strategy in May 2011. That identified collaborative working as the optimal arrangement for megaproject delivery. The construction of terminal 5 at Heathrow Airport was one of the key case studies as a prime example of collaborative working between the partners. It was determined at that time the standard capital works management framework and the procurement model would not be appropriate, so that included the Government's own construction committee within the Department of Public Expenditure and Reform. The procurement model adopted was based on a two-stage contracting arrangement that embraced the principle of collaboration through early contractor involvement and aligned with EU procurement requirements and also closely followed established construction contract forms.

Following deliberation and the presentation of the proposed option to the Government's construction contracts committee, the conclusion was a two-stage project on a collaborative form or model using the public works contract in a modified form which included an embedded risk-sharing mechanism. As the Deputy rightly points out, the Government has realised that the residual risk of inflation in this environment is not tenable, viable or sustainable for the construction industry. It has issued at least two policy responses for entities such as mine that are in tender and trying to entice a market to engage and for contracts that have already been set using a public works contract model where the contractor is taking all the risk on inflation and has introduced an embedded risk-sharing mechanism on a collaborative basis.

To answer the question directly, we will continue to engage through the Government construction contracts committee to ensure that in any future projects the right procurement strategy and the right model or form of contract is put in place. There is a broader discussion at the moment around a revision of the public works contract by the Office of Government Procurement, OGP. I cannot comment on that at this point.