Michael Ring (Mayo, Fine Gael)
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Question 716: To ask the Minister for Education and Science the reason her Department is depriving small builders of applying for contracts for Departmental building work (details supplied); and if same has a legal standing. [20088/07]

Michael Ring (Mayo, Fine Gael)
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Question 717: To ask the Minister for Education and Science if the system for contractors applying for the tendering of projects will be changed (details supplied). [20089/07]

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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I propose to take Questions Nos. 716 and 717 together.

Contracting Authorities have an obligation to ensure that, as part of suitability assessment for placing on tender lists for projects, Contractors have adequate economic and financial capacity.

One of the key criteria for assessing financial and economic capacity is the average annual turnover of the contracting company over the previous three years. The purpose of this is to ensure that the firm has adequate capacity and will not be overstretched if it is successful in winning the tender competition.

My Department's Technical Guidance Document (TGD) 014, Guidance for the pre-selection of Contractors for Capital Works Projects, sets an average annual turnover requirement of 2 to 2.5 times the estimated Contract value. As very few of the projects for which small to medium contractors would be applying would exceed 12 months in duration, in practical terms what this requirement means is that any firm applying would be capable of taking on two projects of similar size at the same time. This is not unreasonable.

The contract periods on this Department's projects are set at a reasonable level in compliance with health and safety requirements; however, there is usually a strict requirement to meet the completion date in order to comply with school term times. This imposes a requirement on the contractor to carefully programme the project to ensure timely delivery. Where a Contractor does not have adequate economic and financial capacity and is consequently overstretched, he/she may not be able to meet these targets.

It will be noted from my Department's website that TGD014 is due to be reviewed in the near future and my Department's Building Unit will re-examine the turnover requirements as part of that review; however, it is not anticipated that there will be any major change.

I should mention that in addition to major projects I approve hundreds of smaller building projects each year, most of which could be tendered for by smaller builders. For 2007 I approved over 1,100 projects under the Summer Works Scheme, together with 250 projects under the Small Schools and Permanent Accommodation Schemes. In addition approximately 500 projects have been approved under the Emergency Works Scheme.