Written answers

Thursday, 20 April 2023

Department of Public Expenditure and Reform

Capital Expenditure Programme

Photo of Rose Conway-WalshRose Conway-Walsh (Mayo, Sinn Fein)
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209. To ask the Minister for Public Expenditure and Reform when the review of the Capital Works Management Framework which commenced in March 2019 will be published; and if he will make a statement on the matter. [18745/23]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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The Capital Works Management Framework (CWMF) represents the tools that a public body must use to procure and manage the external resources necessary to deliver a public works project that is to be delivered under the Exchequer-funded element of the National Development Plan. It consists of a suite of best practice guidance, standard contracts, generic template documents and procedures that cover all aspects of the delivery process of a public works project from inception to completion of the construction stage and the review of its delivery.

A review of the policies and practices deployed in the procurement of public works projects commenced in March 2019 and is ongoing. The focus of the review is on improving the delivery of construction projects in terms of quality, timely delivery and cost outcomes. The review will deliver significant changes to the CWMF over the coming years. The review process involves extensive engagement, both with industry stakeholders, and with the public bodies charged with the delivery of public works projects on a broad range of issues such as:

  • price variation;
  • risk management;
  • creating a better quality: price balance in the award of contracts;
  • adoption of BIM on public works projects;
  • liability, indemnity and insurance requirements;
  • performance evaluation;
  • encouraging collaborative working.
A high-level strategy has been developed by the Office of Government Procurement (OGP) with the Government Construction Contracts Committee (GCCC) that will guide the implementation and will be addressed primarily through the progressive refinement and enhancement of the CWMF.

Covid19 impacted the review in 2020 and 2021, followed in 2022 by exceptional inflation pressures. These events necessitated the redeployment of resources to address the contractual and procurement issues that arose. Ex-gratia measures were introduced to safeguard public works projects that were under construction in 2020, 2021 and 2022 which have been followed up by amendments to the suite of public works contracts which extend those entitlements to new contracts.

Despite the disruption, progress has been made on a number of workstreams as summarised below:

  • The initial focus in the review is on the engagement of consultancy services, which is aimed at driving better project definition, in order to provide greater certainty for all those engaged in the construction stage. Overall improvement in project definition is required through establishing minimum standards for information at the different stages of a project’s development. Work is ongoing on the detailed implementation aspects of the review of the engagement of consultancy services, which will be delivered by means of changes to the template tender documents, publication of new guidance material and exploring digital solutions. A series of bi-lateral meetings with the main bodies representing construction professionals was held in March to discuss draft guidance on brief preparation. Further engagements are being planned for Q2 to review scope of service requirements.
  • A review of the price variation mechanisms used in both the CWMF consultancy and construction contracts is currently underway. Initial research to review the inflation provisions in both the CWMF consultancy and construction contracts has been completed by consultants. Significant increases in construction material costs continues to impact tenders and contracts. Procurement guidance for ‘live’ tenders was published in November 2021. Interim amendments to the provisions in the public works contracts to address inflation in construction materials were introduced in January 2022.
  • Following further inflationary pressures arising out of the Russian invasion of Ukraine concerns have been raised about the ability of contractors to withstand prolongation of elevated materials prices coupled with increases in energy and fuel prices. In the interest of safeguarding the delivery of the NDP and key projects underway, a new inflation co-operation framework was introduced for those parties engaged under a public works contract. The framework facilitates the parties to engage with one another on an ex gratia basis for the purpose of addressing the impacts of exceptional inflation in construction materials and energy, and supply chain disruption. Consultation on broader changes will commence with stakeholders later in 2023.
  • Building Information Modelling (BIM) has the potential to transform the processes surrounding project and data management on construction projects and can drive significant efficiencies. The OGP is currently engaged with the Build Digital Project in developing supports for public bodies procuring projects through BIM. The aim is to ensure a consistent approach to its application across the public and private sectors. An implementation plan will be published later in 2023 setting out dates for a phased adoption of BIM on public works projects. A series of masterclasses is ongoing to prepare public bodies for the implementation of BIM. External advisers have been engaged to draft contract amendments to incorporate BIM into the CWMF and to prepare template procurement documents for publication.
  • The OGP is engaging with key stakeholders on the issue of liability, indemnities and insurance and is reviewing broader aspects of the required terms in the contracts used to engage design teams and contractors. Engagement with the insurance sector and construction industry stakeholders has also taken place on issues relating to cost increases on Professional Indemnity Insurance (PII) premiums and the reduction in cover available. Arising out of the engagement, amendments to CWMF documents and additional guidance was published in February 2022 to address PII challenges. A further recommendation arising out of that engagement was to introduce caps on liability into the suite of CWMF contracts to provide certainty to all those engaged in the delivery of public works projects as to the extent of their liability in the event of a breach. The first phase has concluded with the publication of amended contracts used to engage consultants on 31 March 2023 with the necessary amendments to the suite of public works contracts to follow in this quarter.
  • Engagement is ongoing in developing standard metrics for life cycle costing and life cycle analysis that can be applied to the evaluation of projects’ cost of use in service and full life cycle analysis, including the carbon impact of individual projects. The OGP is liaising with the GCCC and the Irish Green Building Council in developing these metrics.
  • The Cost Control Templates published under the CWMF are undergoing review to incorporate the International Construction Measurement Standard (ICMS). A working group has been established and revised templates will be published in before Q3 of 2023. ICMS is a global standard for benchmarking and reporting of construction project cost and covers both capital and whole life costing while providing a way of presenting costs in a consistent format.
  • A review into the performance of alternative dispute resolution (ADR) provisions that were introduced in 2016 has also taken place in 2021. A final report on the review has been prepared by consultants, which will form the basis of a position paper on ADR provisions in the public works contracts.
Together these reform processes will lead to meaningful policy change and will assist in delivering better value for money for the taxpayer in the implementation of Project Ireland 2040.

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