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'Public procurement system is broken'

Thursday, March 21 10:42:48

The public procurement system is broken and costs the State tens of millions of euro every year, according to the Construction Industry Federation (CIF).

It claimed 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.

It heard that 50pc of the total construction activity that took place in Ireland last year was carried out on public contracts, coming to a value of approximately E4 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 a lack of clarity, incomplete information, low quality of tender documents and a system set up to favour the lowest tender price, not the ability to undertake and complete a project.

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."