Ruairi Quinn (Dublin South East, Labour)
Link to this: Individually | In context

Question 556: To ask the Minister for Education and Science the reason he requires companies who tender for the rapid construction design and build schools and framework 2009-11 contract to have a minimum turnover of €13 million; his views on whether this precludes many small Irish companies from tendering for this contract; and if he will make a statement on the matter. [27098/09]

Batt O'Keeffe (Cork North West, Fianna Fail)
Link to this: Individually | In context

My Department, as a sanctioning agency has 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.

The turnover requirement for school building projects is normally approximately 2 times the estimated contract value over the three previous financial years. In the case of the rapid construction programme, the turnover required for Building Construction is €10m, and €13m for overall business operations.

The rapid programme is divided into lots. In practical terms what this requirement means is that any firm applying would be capable of taking on two projects (or lots) of similar size at the same time. The contract periods on these projects are set at a reasonable level in compliance with health and safety requirements; however, there is also a strict requirement to meet the completion date in order to comply with school term times. This imposes a requirement on the Design &Build operator to carefully programme the project to ensure timely delivery including off-site construction. 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.

I should mention that in addition to major projects I approve hundreds of smaller building projects each year under the Summer Works Scheme and other Devolved Programmes, most of which may be tendered for by smaller builders. In this regard over 1,600 such projects have been approved in 2009.