Public Procurement System costing the State tens of millions of euro every year
The public procurement system in this country is broken and it is costing the State tens of millions of euro every year according to the CIF. The CIF warned that the current process is delaying the completion of schools, hospitals and many other public projects.
These points were made at the “Public Procurement in Ireland” conference which took place in Dublin today. 50% of the total construction activity that took place in Ireland last year was carried out on public contracts, coming to a value of approximately €4 billion. More than 2,500 public sector contracts were placed during 2012, while about 10,000 have been used since the current system was introduced in 2007.
Representatives from the State, the construction sector, architects, chartered surveyors, legal professionals and international experts were amongst those speaking at the conference which was attended by over 150 people with an interest in this area.
Among the problems in the process that were highlighted at the conference were:
- Lack of clarity
- Incomplete information
- Low quality of tender documents
- A system set up to favour the lowest tender price, not the ability to undertake and complete a project
- Lack of legal recourse
Speaking at the conference, CIF President Philip Crampton said, “The impact of the problems in the procurement system is being widely felt. People all around the country are running into issues caused by the way the public procurement process operates.
“It’s delaying the construction of schools, hospitals and dozens of other public contracts. It’s wasting the State’s limited finances. The system is costing the State tens of millions of euro each year because of how the procurement process operates.
“All this is happening because the system is broken. What’s worse is the system could never have succeeded because of the way it was set up. Construction projects should be a partnership between the various sides but the procurement system in this country now operates on an adversarial basis. This is damaging the State, construction companies, architects, chartered surveyors and others.
“At a time when the construction sector is suffering from a very low level of activity, public procurement has never been more important for our sector. Yet the industry is having to operate with an extremely flawed system.
“Simple steps could be taken to stop these problems. If we had greater clarity in the system it would give contractors the proper knowledge of the project they are being asked to sign up to. That would help alleviate project breakdowns as disputes arise between the various parties involved.
“We also have to ask if a system that grants a project to the lowest bid but does not adequately check whether the people bidding have the ability to complete the project is in the best interest of the State. If a contractor is unable to finish a project they started it delays completion and costs the State as well as the other parties involved,” he said.
His remarks were echoed by CIF Director General Tom Parlon.
“The way the public procurement system is set up in this country is wreaking havoc on public construction projects all over the country. 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.
“It’s wasting the State’s limited finances, delaying resources benefitting 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.
“All these problems could be avoided if the process was amended. The Government has committed to undertaking a review of the procurement process in the coming months. They need to take this opportunity to put right the system and ensure it actually works for the State and the other parties involved,” Mr. Parlon concluded.
Amongst the speakers at the Public Procurement in Ireland conference were Paul Morrell OBE, UK Government Chief Construction Advisor 2009 – 2012 (the UK Construction Czar), Steve Rowsell, UK Highways Agency Head of Procurement 2000 – 2007, Minister for Communications, Energy and Natural Resources, Pat Rabbitte TD, David O’Brien, Chairman of the Government Construction Contracts Committee, Jonathan Bliss, Department of Education, Tim Ahern, Consultant to the National Roads Authority, Philip Crampton, CIF President, Andrew Nugent, Society of Chartered Surveyors Ireland and CIF Director General Tom Parlon.