Bernard Durkan (Kildare North, Fine Gael)
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256. To ask the Minister for Education and Skills the total number of school building projects country wide that have come to a halt or have been impeded in the course of construction resulting in delays in each of the past four years to date; the most common cause of such delays; the measures, if any, put in place or to be put in place to address such issues; and if he will make a statement on the matter. [42454/13]

Ruairi Quinn (Dublin South East, Labour)
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In 2010, the contract for one school building project ended prematurely due to the insolvency of the main contractor. In 2011, 14 projects encountered delays or ended prematurely due to insolvency events related to a main contractor.

In 2012, the contract for one school building project ended prematurely due to the insolvency of the main contractor and one school building project was terminated due to the contractor's default. To date in 2013, there have been no school building projects which have ended prematurely.

Details in respect of each of these projects are listed in the table.

The Department of Public Expenditure and Reform (D/PER) has responsibility for implementing national policy on public procurement, particularly in relation to construction procurement. The Capital Works Management Framework developed by D/PER, allows for various bond and guarantee options designed to protect the Contracting Authority/Employer from issues such as contractor insolvencies. These options include retention deductions, performance bonds and parent company guarantees. The majority of major projects in the Education Sector operate using a combination of a performance bond and retention deductions. On occasion a parent company guarantee may also be sought.

Retention deductions allow the Contracting Authority to retain a proportion of the value of work done as security for the cost of remedying defects which become evident before the end of the Defects Period, should the Contractor fail to rectify them.

A performance bond is issued by a guarantor or surety (authorised to do guarantee business) to guarantee that in the event of a Contractor's default, proven losses under the Contract can be recouped. In essence, the guarantor undertakes to be answerable for losses (up to the limit of the Bond) suffered by the Contracting Authority if the Contractor's obligations are not performed in accordance with the Contract; this includes a situation where the Contractor becomes insolvent during the Contract. The value of the bond required for a project is determined at tender stage according to guidelines issued by D/PER, having due regard to the estimated cost of the project.

The Public Works Contracts contain clauses which deal with a contractor's default such as an insolvency event. When a contractor becomes insolvent, all costs incurred by the Contracting Authority/Employer on foot of the contractor's default, can be offset against monies held on the contractor plus costs up to the value of the performance bond. The circumstances surrounding each insolvency event varies from project to project. In cases of insolvency, the size of a project, its value, discussions with the surety, legal advice, the quality of the works done at the time the insolvency event occurs and the relative state of completion of the works have to be taken into account when appointing a completion contractor. In all circumstances the appointment of a contractor to complete the works has to have due regard for national guidelines and EU procurement directives.

School Building Projects involving delays related to insolvency events or termination of contracts 2010 - 2013.