Paschal Donohoe (Dublin Central, Fine Gael)
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The Department of Public Expenditure and Reform allocates capital funding between Departments/sectors, on a multi-annual basis, based on the Government's capital plan.  Responsibility for selecting the individual projects to be funded within the various Departmental/sectorial allocations is then a matter for the relevant individual Minister to decide, based on their priorities for the sector (and subject to agreement by Government, where necessary).

Capital expenditure is sanctioned through the line Departments or bodies given a delegated sanctioning role by those Departments.  These 'sanctioning authorities' are responsible for monitoring the projects and dealing with cost overruns that arise within their capital sanctions. The Public Spending Code published by my Department sets out the principles which apply in relation to project appraisal, value for money etc., and which continue to apply throughout the implementation phase. 

The Office of Government Procurement (OGP) has responsibility for the procurement of common goods and services on behalf of the public sector and for public procurement policy generally which includes construction procurement policy.  With the exception of the recently established Framework Agreement for the Provision of Rapid Delivery Housing, the OGP does not centrally procure construction projects.

A project must complete the review stages set out in the Public Spending Code before sanction is given to go out to tender. At each review stage the project is evaluated to ensure it continues to meet its objectives, the budget is reviewed and adjustments undertaken as necessary.  Once tenders are received the sanctioning authority must review the tender report and give permission for a contract to be awarded with an established construction budget.  It is a matter for the contracting authority who has awarded the contract to manage its performance thereafter and report on budgetary matters to the capital sanctioning authority concerned.  The extent of cost increases on individual capital projects is a matter for each sanctioning authority and the details are not held centrally.

All public works projects that are delivered under the Exchequer-funded element of the Government's capital plan must be procured in accordance with the provisions laid down in the Capital Works Management Framework (CWMF).  The CWMF is mandated by circular and was developed to provide an integrated set of contractual provisions, guidance material, technical templates and procedures which cover all aspects of the delivery process of a public works project from inception to final project delivery and review.  The structure of this strategic framework compliments the Public Spending Code.

A central pillar to the successful outcome of a construction project is a clearly defined set of contract conditions.  The standard public works contract which must be used without amendment (unless otherwise sanctioned) is a lump sum, fixed-price contract and includes, amongst other important elements, a set of tightly defined circumstances where the contract sum and the project's completion date may be adjusted.  It is a general principle that public works projects are put out to tender on the basis of a comprehensively defined set of project requirements so that tenderers can provide a lump sum price for the completion of the project.

Notwithstanding that, the conditions of construction contracts must make provision for change after the contract is awarded whether that is due to unforeseen circumstances or brought about by a change in the contracting authority's requirements.  Careful management pre-procurement is required to ensure that neither scenario arises since changes are disruptive and costly in the construction phase.  Public procurement law also recognises both eventualities and Article 72 of the EU 2014 Procurement Directives sets limits for both types of changes.  Where these limits are exceeded a new procurement process is required.