Mairéad Farrell (Galway West, Sinn Fein)
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304. To ask the Minister for Public Expenditure and Reform his plans to address the issue of abnormally low tenders in large capital projects; and if he will make a statement on the matter. [27882/25]

Jack Chambers (Dublin West, Fianna Fail)
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Public procurement is governed by EU legislation and national rules and guidelines with the aim of promoting an open, competitive and non-discriminatory public procurement regime, which delivers best value for money. The procurement regulations impose a duty on contracting authorities to require economic operators to explain the price or cost proposed where the tenders seem abnormally low in relation to works, supplies and services.

There is a balance to be struck in deciding to award a public contract between value for money and a quality project outcome. From the perspective of a public body’s duty to the taxpayer, it can be very difficult to justify a decision to reject the lowest price out of hand, particularly in the circumstances where the contractor who has bid the price is willing to undertake the project. Recent Irish court judgments have endorsed EU jurisprudence and re-emphasised contracting authorities’ obligations in respect of tenders that appear abnormally low and the requirement to be alert to same.

In relation to large capital projects, 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 public works projects that are delivered under the Exchequer-funded element of the National Development Plan.

Specific guidance on abnormally low tenders is published by the Capital Works Management Framework (CWMF) and in the Public Procurement Guidelines for Goods and Services. The CWMF guidance on abnormally low tenders applies to all contract values above and below the EU thresholds and is included in all CWMF Instructions to Tenderers templates.

My Department has introduced amendments to the public works contracts in the interest of improving tender outcomes. This work will continue in the ongoing review of the Capital Works Management Framework. The measures already introduced include:

• Amendments to the Suitability Assessment Questionnaires including two new Suitability Criteria, Environmental Management Measures and Supply Chain Tracking, and also updating Grounds for Exclusion.
• Introduction of new Cost Control and Carbon reporting Templates mandated for use from 1st January 2024 incorporating the International Cost Management Standards (ICMS3) and the Agreed Rules of Measurement 5th Edition (ARM 5).
• Fully measured bills of quantities are required for those projects, which use the traditional contract type. This measure increases the focus of the design team in preparing more comprehensive design information that can be accurately measured for pricing purposes. With a comprehensive price breakdown, it is easier to identify abnormally low pricing strategies.
• A mechanism to directly tender specialist works was introduced so that these critical work elements are priced directly by the specialist thus reducing the extent of the contract sum for which the main contractor has overall price responsibility.