Spending in 'The North'

fryer99

It bugs me that the Government is complaining about people doing their shopping in the north when they are constantly doing it.
I worked in the construction industry for 6 years as a sales rep and tendered for multiple government projects only to lose out to companies from the North or from England.
Haw can they then come along and complain to us about doing a weekly shop in the North? I wouldn't mind but its still happening. There are a lot of schools / hospitals / prisons planned for the future, if they proceeded with these and ensured only Irish contractors worked on them then it would stimulate a lot of jobs...
Any views?

ardmacha

The government cannot discriminate in allocating contracts. Irish firms are free to tender anywhere in the EU and firms from other places in the EU can do likewise.

nesf

Tendering for Government work has to be made open to EU companies and has to be awarded fairly with no discrimination. It's a bitch when competing against British companies when Sterling is weak but you should know all this already if you were doing tendering.

fryer99

Its not discrimination, its trying to keep money and jobs in the country... what they are preaching to everyone else...

nesf

fryer99 wrote: »

Its not discrimination, its trying to keep money and jobs in the country... what they are preaching to everyone else...

It's against EU law. We'll benefit from the same rules when Sterling gets strong again. It also allows Irish companies to be on a level playing field when bidding for Government work in other European countries, so it's not like it's not got benefits for the country.

fryer99

i agree, tendering against uk companies is nearly impossible. i got more jobs in the north than the south for a while.

Didn't realise it was against EU law, do they have to accept the cheapest quote? Or can they accept an irish company even if the price is more than a uk company?

Dannyboy83

Tendering is one thing, but what are the restrictions around selection?

Its bad enough that Fianna Fail get Blue State Digital to design their website, but how can you spend 2billion on an airport terminal that is supposed to cost 170million?

Do these contracts not have terms to be fulfilled?

If a contract was rendered void, surely companies who abuse/overcharge would be less enthusiastic about doing it in the future?

nesf

fryer99 wrote: »

i agree, tendering against uk companies is nearly impossible. i got more jobs in the north than the south for a while.

Didn't realise it was against EU law, do they have to accept the cheapest quote? Or can they accept an irish company even if the price is more than a uk company?

They need to have reasonable grounds for accepting a quote. So they can accept an Irish one on technical grounds even if it isn't the cheapest. So say you've one very cheap quote from a company that doesn't specialise in the kind of work involved but one more expensive quote from a far better qualified company that regularly does this kind of work they could accept the second for instance.

The problem is that it's fairly unusual for all your British competitors to be less qualified than you are for your average tender, so generally it will come down to price and/or reputation a lot of the time and with Sterling being so abysmally weak at the moment it's nearly impossible to compete right now.

AMK

fryer99 wrote: »

i agree, tendering against uk companies is nearly impossible. i got more jobs in the north than the south for a while.

Didn't realise it was against EU law, do they have to accept the cheapest quote? Or can they accept an irish company even if the price is more than a uk company?

It depends on the way the tender competition is framed and the type of job involved. Most straightforward jobs will have the Lowest Price as the MEAT criteria. More complex jobs may specify a breakdown of considerations such as detailed programme, management team, IT specialisation, etc. which will form part of the consideration together with price.

Under the Fixed Price Contracts introduced for State projects, there are much tighter controls than existed with the old GDLA form of contract. This has virtually eliminated cost over-runs and the contractor doesn't get extra money if the job takes longer than programmed. Obviously this is reliant on the client not introducing new requirements during the course of the contract or the occurance of very extreme events totally outside the control of the contractor. You can read up on all the rules of Public Procurement on the Dept. of Finance website.

Danny Boy, don't understand your question - the tendering process is the method of selection. Do you mean the pre-qualification process that is used on larger competitions?

Also, regards the airport terminal - I presume you mean Terminal 2 in Dublin Airport which is currently under construction. This is a Dublin Airport Authority project. I'm not sure if DAA are in receipt of Exchequer funds or are considered to be a public body - maybe somebody else knows. If they are not, then their contract is subject to the usual private sector laws of contract, not the rules of Public Procurement.

Dannyboy83

AMK wrote: »

Danny Boy, don't understand your question - the tendering process is the method of selection. Do you mean the pre-qualification process that is used on larger competitions?

Also, regards the airport terminal - I presume you mean Terminal 2 in Dublin Airport which is currently under construction. This is a Dublin Airport Authority project. I'm not sure if DAA are in receipt of Exchequer funds or are considered to be a public body - maybe somebody else knows. If they are not, then their contract is subject to the usual private sector laws of contract, not the rules of Public Procurement.

Sorry, my question was not clear on revision.

I meant:
During the tendering i.e. the procurement process, company A state that contract x can be done for 100 million.
company B state that contract x can be done for 200 million.

Naturally, company A are selected.
It then transpires that they lied/were mistaken and it was cost 300 million and take twice longer than estimated.
So company B should have been awarded the contract.

(The DAA is public, government owned)

AMK

Hi Danny Boy

When tender documents are issued for public procurement jobs, they contain very tight specifications of the works required - right down to the quality of the materials. This is to ensure that companies price for what is required. They are not allowed to 'interpret' the requirements their own way in order to put in a lower bid.

The lowest tender is always assessed to establish it's credibility, so to speak. The client will aready have carried out professional estimates of the region of cost. These are not intended to be 100% accurate, but an indicator of the likely cost to the contractor in carrying out the works. If a tender comes in below the minimum range established as viable for carrying out the work, this has to be scrutinised as to risk. Can the contractor carry out the job to the specification required for that price? Unless the client is satisfied that he can, the tender will be passed over. This is a legitimate process - the State body is under no obligation to give the job to the lowest bidder, even when Lowest Price is the assessment criterion, if it is their professional view that it simply is not possible for the works to be carried out for that price. The State employs the necessary skills to make this assessment, or outsources for it if necessary (less necessary in these recessionary times).

In the main, it is not in the contractors interests to underbid for State works especially these days when he is going to be held to the price he quotes.

Regarding DAA, I am not familiar with the project or the tendering process used so couldn't comment. However, the media tends to be wildly inaccurate when bandying about figures in respect of State contracts. They very often get initial estimates wrong, relying on political or other comment when projects are first mooted instead of properly researching the actual official estimates. The C & AG's Office provide detailed and accurate information on State projects in their Annual Reports.

Dannyboy83

Very comprehensive answer, Thank you.

Regarding the DAA, I'm going by their own figures:

http://www.dublinairportauthority.com/media-centre/press-releases/052007.html
The DAA never put a cost of €200m on T2. In the summer of 2005 it put a possible cost on a notional terminal of about €200m. The only budgeted cost published by the DAA for the fully-designed, 75,000 sq m terminal it will build at Dublin Airport, is €395m.

Comparing to:

http://www.irishtimes.com/newspaper/breaking/2009/1204/breaking50.htm
"This determination, the commission’s third since 2001, has posed a number of significant challenges. Its timing coincides with the prospective completion of a very large infrastructure project -Terminal 2 at a cost of €600-plus million - and a global recession that has hit Irish air travel particularly hard," aviation commissioner Cathal Guiomard said.

I don't have any specific point to make here or any specific grievance to air.
I'm just genuinely confused as to why the figures seem to grow so much and more to the point, so frequently.
Massive overruns by the NRA seemed to be commonplace during the Celtic Pyramid years.

An overrun here and there is to be expected, nothing is black and white.
But I seem to recall colossal overruns, for example:

http://www.joanburton.ie/?postid=115
Joan Burton
May 15, 2005

Dail to debate Labour motion on gov waste of taxpayers' money
That Dail Eireann, deploring the shocking waste of taxpayers money highlighted in the recent Prime Time Investigates programme and a number of recent reports of the Comptroller and Auditor General including, among others:


1)the huge over run in the cost of the roads programme in the early years of the National Development Programme, which means that the eventual cost will be more than €16bn rather than the €7bn originally estimated;
2)the specific findings of the Interim Report of the Hearings of the Public Accounts Committee, published on May 12th, that identified a number of road projects, originally estimated to cost €562m that ended up costing €984m;
3)the decision to buy a site for a new prison at a cost of almost €30m which may not prove suitable for the purposes intended, when cheaper, more suitable alternative sites were available;
4)the acquisition over a number of years of buildings to house asylum seekers which were never used and which remain empty;
5)a whole range of other projects initiated by this government involving either a total waste of money or massive overruns, including Abbotstown, the Punchestown Equestrian Centre, e-voting, the failure to properly cost the extension of the medical cards to the over 70s, and the indemnity deal agreed with the religious orders outside normal cabinet procedures;

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fryer99 wrote: »

It bugs me that the Government is complaining about people doing their shopping in the north when they are constantly doing it.
I worked in the construction industry for 6 years as a sales rep and tendered for multiple government projects only to lose out to companies from the North or from England.
Haw can they then come along and complain to us about doing a weekly shop in the North? I wouldn't mind but its still happening. There are a lot of schools / hospitals / prisons planned for the future, if they proceeded with these and ensured only Irish contractors worked on them then it would stimulate a lot of jobs...
Any views?

People's response should just be that they are doing as then-Tanaiste Mary Harney advised a few short years ago - namely, they are "shopping around" (for the best price).

After all, we'd be foolish to ignore the advise of a Government Minister, wouldn't we?

Dannyboy83

bump for answer to my q above

Scarab

Sorry for keeping this off topic but can i ask AMK if State bodies are able to include future tax receipts from Irish based companies to offset the total tender cost as opposed to foreign companies where tax may be paid to foreign governments.

mikemac

Contracts are tendered across the EU.

The M7 section by Nenagh was awarded to a Portuguese firm, it's not as if we have a shortage of contractors in Ireland!

But rules are rules, Irish companies are free to bid for contracts in other countries too

Tipsy Mac

We export a huge amount of goods, if other countries took the backward view that the government have on us not shopping up north, not purchasing foreign milk etc our country would be completely in ruins economically, it's these gombeen economics that have ruined the country. If we cannot compete with other EU countries we should leave the Euro, leave the EU and become another Iceland type operation.