Public procurement 'still heavily favours low-cost bids, even for high-risk projects'

BAM Ireland submitted the lowest bid to win the contract to build the now-long delayed and as-yet-unopened multi-billion euro National Children’s Hospital. File picture: Brian Lawless

BAM Ireland told the Government that public procurement “still heavily favours low-cost bids, even for high-risk projects”, and that the State’s approach leads to “prolonged delivery timelines” and “escalating costs”.

“Procurement models that prioritise cost over quality lead to adversarial contract management and higher rates of variation or dispute during delivery,” it said.

The firm that submitted the lowest bid to win the contract to build the now-long delayed and as-yet-unopened multi-billion euro National Children’s Hospital made the comments in a submission to the public consultation on the Government’s Accelerating Infrastructure plan that was unveiled earlier this month.

The children‘s hospital project has been beset by multiple targeted completion dates that have come and gone, claim and counter claims over who is to blame between BAM and the National Paediatric Hospital Development Board.

Earlier in December, BAM filed papers in the High Court against the board with the case to be heard in January as a war of words remains ongoing over the completion of the hospital with minister for health Jennifer Carroll MacNeill weighing in during the summer that BAM’s claims of progress were “not credible”.

Elsewhere in its submission on the Government’s plan, BAM called for the State to “depoliticise the procurement and delivery of public infrastructure in Ireland”.

“Responsibility for overcoming the current infrastructure crisis rests with all parties; once committed, political debate and criticism serve only to distract from project delivery and prevent officials and state representatives from making the timely, effective and sometime courageous decisions required for efficient delivery,” it added.

This submission is just one of many on the Government’s infrastructure plans that included State bodies and private companies, such as:

• Transport Infrastructure Ireland bemoaning how national policies “often conflict with one another” and how the reliance on annual budget allocations creates a “fragmented project pipeline”.
• Bord Gáis Energy said that historically, gird infrastructure investment has only been commissioned once the need is already pressing which, given very long lead times for infrastructure deployment, leads to an ongoing situation of “too little too late”.
• The Land Development Agency said that whilst infrastructure has not yet proven a barrier to delivery, the lack of certainty on the timing of future water and electricity connections “is a very real risk factor in the delivery of a number of our projects”.
•  Irish Rail said governance processes are “overly complex” and highlighted “serious capacity constraints” in the construction sector.

As part of the plan announced in December, the Government said it would introduce restrictions on judicial reviews and new laws to fast-track major projects as part of reforms to speed up infrastructure delivery.

Taoiseach Micheál Martin said the planning, legal and regulatory frameworks had become “extremely complex and unwieldy".

“This has made timely delivery increasingly difficult and in extreme cases has caused important projects to be abandoned,” he said.

The plan was put out to public consultation last summer, and over 160 responses received have been published by Government both from individuals and businesses.

Another was from the HSE hitting out at the delivery of core infrastructure as “too slow [with] too much uncertainty”.

It pointed out that it lodged a planning application for a 100-bed community nursing unit in Ennis in August 2022 but almost two years later had not got a decision.