Richard Bruton (Dublin North Central, Fine Gael)
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Question 282: To ask the Minister for Finance the areas of the proposed new public procurement contracts in dispute with bodies representing contractors; and if he will list in the case of each disputed item the reason he believes private contractors are in a better position to manage the risk concerned than the public sector; the core reason the State would choose to contract out the risk. [25014/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The Government's policy objectives in relation to construction procurement reform is to seek to achieve greater cost certainty, better value for money and more cost effective delivery of public works projects. My Department, with the assistance of the Government Contracts Committee for Construction (GCCC), specialist legal drafters and external technical expertise, has developed a suite of Standard Forms of Construction Contract to give effect to the core Government's objectives in this area. The well established principle in relation to risk transfer is that risk should reside with those best able to manage and control it. This is the guiding principle throughout the new suite of contracts and is the basis upon which they have been prepared. In finalising the public sector contract conditions, I am now satisfied that this principle is being applied in a fair, reasonable and balanced way.

My officials have had extensive and constructive consultations with the construction industry over the last year on the content of the contracts. During this process, there has been very significant movement on the part of the State to help meet the industry's concerns without compromising the core policy of having fixed price lump sum contracts with appropriate risk transfer, tendered on a competitive basis as the norm for future capital works projects. Following a very useful exchange of views with representatives of the construction industry earlier this month, I am aware that there are a small number of outstanding concerns for the industry. Some of these go to the very core of fixed price lump sum contracts, including the length of the fixed period and the extent of, and scope for, risk apportionment under a number of headings and types. Others relate to the more effective operation of the contracts themselves and the sanctions available for non-compliance. It would not be appropriate for me to comment further on the details at this time. However, let me say that I have listened carefully to the industry's comments and views and I am currently reflecting on the points made with a view to finalising the contracts very shortly.

It is important that we move the process on now and prepare for the next phase of implementation, which is a comprehensive training programme for public sector practitioners, to ensure that the new arrangements are used appropriately across the public sector as soon as possible.