Louise O'Reilly (Dublin Fingal, Sinn Fein)
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268. To ask the Minister for Public Expenditure and Reform if his Department or State agencies under the aegis of his Department have awarded contracts to a company (details supplied); if so, the value of such contracts; if the contracts were tendered for; and if he will make a statement on the matter. [44791/20]

Michael McGrath (Cork South Central, Fianna Fail)
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I wish to advise the Deputy that neither my Department nor any of the bodies under the aegis of my Department have awarded a contract to the company in question.

Seán Canney (Galway East, Independent)
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269. To ask the Minister for Public Expenditure and Reform the number of capital project contracts final accounts that have exceeded the tender value by more than 20% in each of the years 2010 to 2020; and if he will make a statement on the matter. [44811/20]

Michael McGrath (Cork South Central, Fianna Fail)
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As the Deputy is aware, my Department does not have a direct role in overseeing construction projects implemented by other Departments.  That responsibility rests with the appropriate Minister responsible for the Sanctioning Authority who approved the project, under the policy of delegated sanction that operates in relation to capital expenditure within the capital budgets allocated to line Ministers / Departments.

With regard to my own Department, due to the nature of its role, it had no major State capital projects funded through its own Vote in the period 2011 to 2020.  The purpose of the limited capital investment undertaken by the Department, and the Office of Government Procurement and the Office of the Government Chief Information Officer therein, is to deliver greater effectiveness and efficiency across the Civil and Public Service through investing in ICT.

With regard to bodies under the aegis of my Department, I have been advised of the following by the Office of Public Works (OPW):

The OPW had 12 final accounts on contracts that exceeded the tender value by more than 20% for which the contract was greater than €5 million.

11 Flood Relief Capital Contracts commissioned by the OPW, or by Local Authorities on their behalf, with values in excess of €5 million, had final accounts that exceeded the tender value by more than 20%. The following are those flood relief projects:

- Bandon, Co Cork

- Bray, Co Wicklow

- Clonmel North, Co Tipperary

- Clonmel West, Co Tipperary

- Ennis Upper, Co Clare

- Ennis Lower, Co Clare

- Fermoy South, Co Cork

- Mallow North, Co Cork

- Mallow South, Co Cork

- Skibbereen, Co Cork

- Waterford City (Phases 2, 3, 4)

The stages and rigour adopted by the OPW in completing flood relief schemes by their nature take a number of years to bring the schemes through development, planning, design, procurement and construction. Coupled with the known work and estimated timeframe for each stage, are respective potential risks that are carefully managed, but by their nature can extend time and require allowances for reasonable budget increases.

Construction budgets are closely monitored in the context of the tendered contract price. The Public Works Contract Form 3, Public Works Contract for Civil Engineering Works (PW-CF3) is used for construction of flood relief schemes. These contracts are priced based primarily on a fixed price lump sum basis (based on the known ‘Works Requirements’ at tender stage).

Some of the risks include unforeseen ground conditions, which can be assessed at a high level by means of site investigation works conducted to inform a scheme’s design. These investigations, however, are constrained as the lands are often privately owned, and flood relief schemes can extend over long stretches and in built-up areas with varying ground conditions. Therefore, the nature of flood relief works, adjacent to river and/or the sea, means that ground conditions cannot be fully known at the commencement of the construction phase. The scope of construction can evolve as schemes are being built, informed, for example, by agreements reached with landowners. These negotiations may necessarily change elements of the design or alter planned scheme finishes. During construction, other unforeseen issues may also arise, including for example archaeological finds.

Given the associated risks during construction of a flood relief scheme, variations to the Works set out at tender for design and construction are inevitably necessary during the course of construction. The OPW actively manages these claims but experience is that incorporating variations during the contract can sometimes be complex and often result in disputes being referred to conciliation, leading to additional costs.

The OPW actively monitors expenditure for each scheme against contract costs and total project budget. The value for money of flood relief schemes is also monitored using a benefit to cost ratio.

There was also one Estate Management Contracts pertaining to the historic Leinster House in Dublin that exceeded the tender value by 20%.  The agreed tender price was €12.82 million.  The final amount paid was €16.4 millionexceeding the contract price by 28%.  The excess arose as additional time was required to carry out additional work (at the same tender rates) which only came to light during the contract.  These previously hidden building elements could not have been reasonably foreseen or surveyed prior to contract placement, as the building was in full occupation by the Houses of the Oireachtas.  The unforeseen works included significant cracking in internal walls, structurally unstable chimney flues, hidden structural roof defects, poor quality stone and stonework, additional structural works and fireproofing to floors, additional works to plaster ceilings, additional supports for chandeliers and lanterns, additional services and related builders work.