Mick Wallace (Wexford, Independent) | Oireachtas source

The cost of the children's hospital is out of control. I laid out last night what I see as being at the root of the problem. How many variations have there been since this contract was awarded? What is the value of the different variations? How many more variations might the Government be expecting? The procurement process should have delivered the correct form of contract but it did not happen.

The Government has used a fixed-price contract and for that one must have a well-defined scope of works or the claims will come. We do not have a well-defined scope of work because, as I said last night, it is almost impossible with a complex engineering project such as a hospital, so the claims are coming, and we are only starting. We needed a bespoke civil engineering remeasurement contract but we did not get it. As I said last night also, in that situation the contractor does the work, it is measured and one pays accordingly and lets the quantity surveyors sort out the differences. The contractor looks at what avenues he has to make extra money.

The Taoiseach passed a comment about the low balling of contracts. He was a little on the naive side with his comment. I would argue that right now for BAM it is like picking apples in an orchard and that is a big problem for the Government. The legal firm is the adviser on how one procures and amends the tender documents and it has a duty to alarm its clients of the consequences of using standard documents such as those in the capital works management framework because they can only facilitate a fixed-price contract and they do not suit a job such as this one. That gives unbelievable potential to the contractor to get extra money as it goes. The legal firm is a construction specialist. It is not true that it does not know. It should know. That is part of its job. It did not have to rely on the capital works management framework, which the Department of Finance gives it. It had other options. I am seriously concerned with its performance and I think its professional indemnity should be considered. This is not good enough and it will cost the Government too much money. At this stage in the contract the Government has the potential for termination at will. It excludes loss of profits.

See this speech in context