Ossian Smyth (Dún Laoghaire, Green Party) | Oireachtas source

As Minister of State responsible for public procurement, I will be taking this question. The public works contract was introduced in 2007 in response to significant cost overruns on public infrastructure projects and must be used for projects that are delivered under the Exchequer-funded element of the national development plan. Contracting authorities are expected to ensure projects are comprehensively designed to enable contractors to price with greater certainty and account for any risk that is transferred under the contract. The contract, which is a key component of the capital works management framework, CWMF, has undergone significant reforms over the years since it was introduced, and the level of risk contractors are expected to carry has been reduced in a manner that is proportionate and in line with market developments. The most significant review was conducted in 2014 and it has undergone a series of further refinements since then. It continues to be amended when appropriate.

Most recently, in January 2022, in response to materials price increases not seen in over a generation, amendments were made to reduce the level of inflation risk transferred. By March it was clear a further intervention was necessary in light of the growing inflationary pressures and uncertainty in supply chains brought about by the war in Ukraine. In May, the Minister and I introduced the inflation and supply chain delay co-operation framework after extensive consultation.

The contract is but one element of the CWMF. In March 2019, a much broader review of the policies and practices deployed in the procurement of public works projects commenced and is ongoing. The focus of the review is on improving the delivery of construction projects in terms of quality, timely delivery and outcomes and will result in significant changes to the CWMF over the coming years. It should be read in the context of a suite of measures, including the review of the public spending code; the establishment of the commercial skills academy to provide relevant training for people involved in public procurement; a review of productivity in the construction sector; and a review of the capacity of the public sector to deliver the national development plan. All of these taken together will improve the performance of the construction and operational phases of a project. The CWMF review involves extensive engagement, with both industry stakeholders and the public bodies charged with the delivery of public works projects on a range of issues, including price variation; risk management; reflecting quality in the award of contracts; the adoption of building information modelling, BIM, on public works projects; liability, indemnity and insurance requirements; performance evaluation; and encouraging collaborative working.

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