OPW pays almost seven times over projections on property maintenance

Patrick O’Donovan T.D., Minister of State with responsibility for the Office of Public Works. Picture: Larry Cummins.

The body charged with the management of State property assets spent just under seven times the contracted value, or €34.7 million before tax, on the outsourced maintenance of those properties in 2019.

Some €34.7 million had been spent under the contract by the end of 2019, nearly seven times the projected maximum value of €5 million. 

Some €22 million of that total was attributed to works on infrastructure in preparation for Brexit.

The Office of Public Works first signed a “measured term” contract - one where work could be drawn down as and when needed - with the outsourced company in October 2014 with an expected expenditure value of €3 million per year over four years.

An audit by the State’s accountant, the comptroller and auditor general, however, found that some €39.4 million was spent over those four years.

In addition, the C&AG said that “at least six work orders” breached tender rules for construction contracts in that they exceeded the €500,000 limit under the outsourcing contract which mandates that any construction valued above that limit must go to separate tender.

The OPW went out to tender for a renewed version of the contract in 2018, which was, in turn, granted to the same company which secured the original deal for a further three years.

That new contract was estimated to be equivalent to €5 million per year.

Inadequate monitoring

The C&AG Seamus McCarthy said that following his office’s audit it had concluded that the OPW “did not have adequate contract monitoring mechanisms in place”.

He said that the OPW’s accounting officer had agreed to the C&AG’s recommendations regarding the improvement of contract monitoring and estimation of contract values.

The implementation of those recommendations is expected to be discussed at this afternoon’s meeting of the Public Accounts Committee with the OPW.

Maurice Buckley, head of the OPW, is expected to tell the committee that he “fully acknowledges” the issues raised by the C&AG, and has “taken on board his recommendations”.

He is expected to say that the initial contract had “underestimated the demand… with the result that many more individual projects were undertaken than had been originally anticipated”.

The OPW’s total expenditure for 2019 was €455 million, €99 million of which was spent on flood risk management, and the remainder €356 million on its estate portfolio management programme.