16th February 2018
Peter Brennan, Chairman of Bid Services, shares his thoughts on the Project Ireland 2040 National Planning Framework and Capital Development Programme announced by the Government this afternoon.
I reviewed the NDP to find out what the Government is proposing in terms of procuring the announced €116 billion in works, supplies and services.
Correctly, there is a lot of emphasis in the document in terms of securing value for money through the strict application of the Public Spending Code.
However, to my astonishment, procurement is barely mentioned. There is no policy statement about the procurement strategy that will be used to drive this unprecedented level of socio-economic infrastructure.
There is no indication as to how much of the projected €116 billion should be won by Irish SMEs by way of competitive tendering. If current trends continue, over €12 billion of this quantum may be awarded to non-Irish contractors with a commensurate loss in taxation, jobs and knowhow. DPER should lead an initiative whereby Irish companies and sub-suppliers are trained to secure the maximum amount feasible from this not inconsiderable capital investment.
In the absence of any other option, public bodies will continue to rely on the Capital Works Management Framework (CWMF), a set of guidance dating from 2004 that is not fully compliant with the current EU Procurement Directives. It is timely to ask the question: is the CWMF fully ‘fit for purpose’ to deliver the wide variety of works projects identified in the NDP. While the CWMF provides important templates and model letters and contracts, it needs more flexible rules to make it easier for contractors and sub-contractors to pre-qualify. Only in relation to works contracts, are all tenderers required to submit a suite of supporting documents as part of the qualification process.
In addition, new rules should be written into the CWMF to allow some projects to be procured using the (very flexible) EU Concessions Directive. Many contracting authorities should be using the Competitive Procedure with Negotiation to procure complex works projects yet the CWMF is silent as to how best should be done.
The OGP should use the Dynamic Purchasing System to procure construction professionals for the many public bodies that will need specialist service providers over the coming decade.
It is notable that the Office of Government Procurement – Ireland’s Centre of Procurement Excellence – is mentioned just once in the NDP; in relation to the proposed investment in the eTenders platform.
The NDP states clearly that all large-scale projects should continue to be assessed in terms of suitability for procurement by Public Private Partnership and/or alternative financing (by means of user charges for example). There is a commitment to look at a ‘new procurement option’ (whatever that might be) later this year. The construction sector/PPP industry does not like the Competitive Dialogue, so whatever new process is preferred in its place will be an improvement.
Many of the works procurements will be tendered by Ireland’s utilities. Is there scope to streamline and make these tender competitions less costly for potential contractors?
The National Planning Framework identified the transition to a low-carbon and climate-resilient society and achieving sustainable mobility as ‘vital’ strategic outcomes. Yet there is no mention as to how green procurement techniques that are deployed in every other Member State could be best used to reduce Ireland’s carbon emissions. For example, energy efficiency in buildings and transport solutions could be hugely influenced if sustainability award criteria were written into tender requirements.
DPER’s Infrastructure Projects Steering Group and the Construction Sector Working Group need to assess how best smart procurement techniques should be used to drive the wide portfolio of projects in the pipeline.
