Irish Independent Tabloid - Business Week Thursday, 28 March 2013 Page: 8

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Plansto review public contract procurement policies are welcomed

Philip Crampton
JMAGINE for a moment Publiccontracts are extremely The root of these problems you are discussing a job important to the construction can be traced back to the opportunity with a industry. In total over 2,500 current public project contracts. potential employer. The public sector construction contracts As things stand, contractors employer doesn't name are regularlyaskedto price projects were used in 2012. a salary,but asks you what wage They accounted for more for designs that are not you'd need to undertake this than 50pc of the construction fully developed. They are asked job. activity that took place in Ireland to submit prices on tenders that Employment is scarce and omit pertinent information, or last year, comingto a value you're aware the employer is of approximately 4 billion. that are missing vital elements. also talking to other people The current public construction These deficits of information about this job. Soyou go back to then come to light as work gets contracts were introduced the employer with a low salary by the Government in 2007. underway.When the contractor request, in the knowledge that They were brought in to bring raises these problems, they are the employer will probably go more certainty to projects in told they acceptedall riskswhen with the person who costs the terms of costs and time. Payment they signed up to the project, least.Yourlogicbeing it's better for the projectt would be and so won't be compensated to get the work than be left locked in, and detailed plans doing nothing. So you start the job and it for the project would be provided in return. quicklybecomes apparent that there are a number of additional Unfortunately, in practice, requirements that were never while the price has been fixed, the information supplied hasn't mentioned. Your employer expects you been. These issues with the public to work extra hours, or to undertake additional duties that were procurement process have never previously mentioned. resulted in problems for construction companies,architects, Youask for an increase in your chartered surveyors, the legal salary,but are told that the conditions are fixed and you won't profession, and the State. be compensated for these We've seen schools, hospitals, and a variety of other public changes. projects delayed in the last Plus you can't take legal few years. action becausepart of the agreement you signed said you wouldn't. Such a situation would be completely untenable, and would understandably lead to the employee leaving the job. Yetthis type of situation is what faces construction companies when they look to secure public sector construction work. This has lead to extensiveproblems with the procurement of publicly funded projects all around the country.

Irish Independent Tabloid - Business Week Thursday, 28 March 2013 Page: 8

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for any changes. Additionally, the State requires parties to public contracts to agree that all disputes will be settled at arbitration. Effectively, this means that a contractor must sign away his right to seek a remedy in court. The contract also requires that the contractor commits to paying his own, and possibly the State's, arbitration costs, irrespective of the outcome. So a contractor's right to claim his entitlement under the contract is curtailed by requiring them to commit to paying excessive arbitration costs. These are a handful of the issues that exist within the procurement process as it stands, leading to the breakdown of countless public projects. However, while there are a lot of issues that need to be resolved, the good news is that the system can be fixed. When the current contract came into effect in 2007 there was an agreement that a review would take place to see how the system is working. After a request from the Construction Industry Federation (CIF),the Government has committed to carrying out that review in the coming months. All sides of the public sector contracts have welcomed this review with everyone - State contracting authorities, architects, chartered surveyors, and legal practitioners, as well as main and sub contractors looking to have various problems ironed out. We need to ensure we use this opportunity to improve the public procurement system, ensuring that we avoid more project breakdowns, and that these contracts can benefit the State in the way that they are meant to.
Philip Crampton is president of the Construction Industry Federation.

Pictured at the public procurement conference organised by the Construction Industry Federation were from left: Paul Morrell, former UK Government chief construction advisor; Tom Parlon, CIF director general; and Philip Crampton, CIF president