‘Flawed’ public procurement costs State millions

The main representative body for the building sector has slammed the Government’s current public procurement system — saying the “extremely flawed” process is costing the State “tens of millions of euro” every year.

At its Public Procurement in Ireland conference yesterday, the Construction Industry Federation (CIF) said the current system is “broken” and is delaying the completion of new schools, hospitals and many other public projects.

The CIF said that lack of clarity, incomplete information, lack of legal recourse and low quality of tender documents is hampering progress, while the system favours the lowest tender price, as opposed to the ability of a company to undertake and complete a project.

Half of the total construction activity that took place in Ireland last year was carried out on public contracts, amounting to a combined value of around €4bn.

“The way the public procurement system is set up in this country is wreaking havoc on public construction projects all over the country,” CIF director general, Tom Parlon said.

“The impact is being felt by everyone in the country because it is costing the taxpayer a lot of money. Due to failures in the system we’ve seen countless public projects collapsing in the last couple of years,” he added.

“It’s wasting the State’s limited finances, delaying resources benefiting the public, and really hampering many different sections of industry. When more than 15 school projects fall apart in two years you realise that these are not individual problems — it’s because the system is flawed,” Mr Parlon said.

However, separately yesterday Minister of State Brian Hayes told a Public-Private Partnership seminar in Dublin that the Government is listening to building contractors’ concerns and is working on improving engagement and reducing time and cost constraints associated with the procurement process.

He said this includes introducing a scheme to reimburse bid costs for short-listed tenders, organising planning permission in advance of tender awards, reducing the procurement process timeframe by six months to 16 months and addressing difficulties faced by contractors obtaining bonds at levels sought in some public works tenders.

He added that the Government “will be able to put the correct funding structure in place to ensure delivery of these important projects”.

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