Tom Hayes (Tipperary South, Fine Gael)
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Question 172: To ask the Minister for Finance the new procurement arrangements for public capital budgets as promised in the Programme for Government; if these arrangements are currently in force; the estimated saving of these arrangements; and if he will make a statement on the matter. [26926/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The Government decided in May 2004 to introduce reform measures in respect of the procurement of public works projects and the engagement and settlement of fees for construction consultants. The reforms are a key value for money initiative introduced to address concerns about the extent of cost overruns (the difference between the tender price accepted and the final outturn cost) on public works contracts and the way fees were paid to construction consultants employed on public works projects. New fixed price lump sum contracts with optimal risk transfer were developed to achieve greater cost certainty at tender stage, better value for money and more efficient delivery of projects. Fixed price contracts with more client focused, standardised conditions for the employment of construction consultants were also developed. The revised arrangements came into effect on 19 February 2007. A transition period was allowed to permit projects in the pipeline with advanced designs to proceed on the basis of the existing forms of contract. The transition period ended on 13 February 2008. Contracts for all projects after that date, other than a small number mainly in the water services area, to which I have given a further derogation, have to be awarded using the new public works contracts or the conditions of engagement for consultants in line with the Government reform initiative. It is too early at this stage to provide a realistic estimate of savings arising from the reform measures. It is essential that the calculation of savings is based on a realistic representative sample of completed projects and a review of the performance of the new procedures will be undertaken by my Department in consultation with the relevant procuring authorities when the appropriate information is available.