The Construction Industry Federation (CIF) is calling on the Government to undertake a review of the public construction contract as it is not providing the clarity it is meant to. The contract is meant to ensure that in return for a fixed lump sum payment, fully designed and detailed projects would be outlined. However according to the CIF the detailed plans are not being provided.
The public construction contract was introduced in 2007 by the Government Construction Contracts Committee (GCCC). At the time of its introduction the Government gave a commitment that it would be reviewed within three years. This review was not undertaken in 2010 as there was industry wide consensus that not sufficient data on completed projects to undertake a proper review.
The CIF believes that sufficient projects have now been undertaken for a full review to be implemented. Approximately 5,000 contacts have now been entered into as of 2012 using the GCCC form of contract, with 3,500 having progressed to final account or beyond.
“This is a very big problem for our industry at present,” said CIF Director General Tom Parlon. “Government contracts provide a large proportion of the construction work that is taking place. However instead of being a relief for the industry they are currently causing more problems.
“When the Government contract was introduced there was an agreement that in return for a fixed lump sum payment being provided, the construction company would be supplied with fully designed and detailed plans. This stands to reason. To properly work out the cost of a project you need to know the full specifications and exactly what is involved. Without that level of detail you won’t know if there are any hidden costs or any additional problems that might make the project untenable from a financial perspective.
“All parties agreed that this clarity would be provided in advance. In return the Government would know the exact cost of a project and would not face rising bills as costs rocketed. It was a fair trade off that should help the smooth progression of construction projects.
“Unfortunately the reality has not lived up to the ideal. Our members are coming across a lot of public projects on which insufficient detail is being provided. That is not helping the construction process or the efficient delivery of projects. It is a problem which is recognised by all the various industry stakeholders, including the State contracting authorities.
“For that reason we are calling on the Government to undertake a review of the contract. We want to see contracting arrangements brought in which will fairly balance the needs of the State and the contractor alike. We also believe that the review should consider the experience of all the participants in the construction process. This will ensure that a fully balanced, detailed and nuanced position is provided,” Mr. Parlon concluded.