Committee Reports > List of Committees > Dáil > 1985 > Committee on Public Expenditure > Report - Control of Capital Projects

APPENDIX 3

LETTER TO CLERK TO THE COMMITTEE FROM THE SOCIETY OF CHARTERED SURVEYORS IN THE REPUBLIC OF IRELAND

Further to our discussion this morning I enclose a copy of our submission to the committee on Cost Over-Runs ^*dated February 1982 together with our response to the committee’s report dated 5th October 1983.

The Society of Chartered Surveyors which represents the majority of professionally qualified quantity surveyors (construction economists) in Ireland and as the profession primarily concerned with construction expenditure is acutely aware of the strengths and weaknesses of its major client - the public sector.

The Society believes that the procedures developed over the years in the Departments of Education and Health have had a profound effect in assuring that more economic buildings are constructed within a control system that operates from inception to completion.

Other Departments without the technical skills available to Health and Education have had considerable difficulties with regard to construction projects which is understandable having regard to the length and complexity of the design and construction process.

The Society of Chartered Surveyors believes that a small, technically qualified, unit within the Department of Finance could provide expert advice and control similar to that available in health and education to other government departments involved in the construction process.

We would very much appreciate the opportunity to meet members of the sub-committee to elaborate on these proposals and to offer to them the views and expertise of our members both in public and private sectors.

We look forward to hearing from you.

Yours sincerely,

Michael J. T. Webb.

COPY OF LETTER SENT TO THE MINISTER FOR FINANCE FROM THE SOCIETY OF CHARTERED SURVEYORS IN THE REPUBLIC OF IRELAND

Re. Cost over-runs on public construction contracts

With reference to the report of the Working Group on the above, we acknowledge receipt of a copy of the Report and have noted the contents.

When submissions were sought by the Working Group on 7th January 1982, this Institution was seriously concerned by the fact that observations/recommendations, were sought by 31st January 1982, a date a little over three weeks later. We considered that, if comparable time constraints were to be applied to its deliberations, and given the dynamic, highly complex and interdependent nature of the construction process, together with the nature and scale of the problems generated by these and other factors on major construction projects, the likelihood of the Working Group producing a comprehensive, wide-ranging and definitive, thoroughly reasoned and considered Report in the time available to it appeared somewhat remote.

In the circumstances, however, the Working Group have produced a document, which, although not as comprehensive as the subject matter deserves and requires, is nonetheless to be welcomed, if only because it represents virtually the first attempt to set down for the public sector as a whole in this country the basic procedures that must be followed by public sector client organisations who decide to embark on major construction projects, whether on a ‘once-off’ basis or as part of a continuing programme.

This Institution is concerned however, at the somewhat superficial nature of sections of the Report and at the way in which assertions have been made and conclusions reached which are difficult to justify on the basis of logic.

We are also concerned that, apart from the recommendation that ‘an informal vetting group’ be established to assess feasibility reports on major projects, virtually no attention appears to have been directed towards improving the quality of the ‘in house’ professional/technical expertise available to public sector client organisations, which, of course, varies widely from one organisation to another. A fundamental flaw in the present system is undoubtedly the fact that the majority of public sector organisations normally operate in virtual isolation from each other. Although some organisations have highly expert, objective professional advice available to them from within their own structures, many others have not. Regretably, although it is the latter who most need this type of assistance, it is they who all too often embark on highly complex construction projects, without realising the extent of their own organisational and technical inadequacies.

Ideally, the type of advice referred to should be always available from within the public sector organisation concerned but, given the realities of our present economic situation, a more appropriate solution would appear to be the establishment of a small, highly skilled, central agency, whose impartial, multi-disciplinary, high-calibre expertise would be available to all public sector organisations contemplating or engaged in large scale construction projects.

It will be apparent from the foregoing that we consider the Report, while it is, as we stated earlier, a welcome first step, merely scratches the surface of the problem of cost over-runs on major public sector construction contracts. If the matter is to be dealt with on an effective long-term basis a very much more searching and fundamental inquiry than the present one is clearly needed.

Moreover, certain aspects of public sector construction work (e.g. fees), which were not specifically referred to in the advertisements seeking submissions and were consequently not commented on in our submission, have been dealt with at some length in the Report. We consider this unsatisfactory, in as much as we would have certainly commented on these matters if it had been apparent that comments were sought.

This organisation represents the majority of professionally qualified quantity surveyors in this State and constantly seeks to improve the professional expertise of our own members, the efficiency of the construction industry generally and the procedural standards of client organsiations. We have long been conscious of the need to prevent, as far as possible, significant cost over-runs on all types of building contracts, both public and private sector, and the high level seminar, confined to senior public servants, on the theme of the ‘Effective Control of Expenditure on Public Sector Construction Projects’, organised in association with the Institute of Public Administration in October 1980 is a good example of our continuing concern with this area and the practical steps we have taken to deal with the problems that arise in it. (I might mention in passing that this seminar was chaired by Mr. Colm O’Nuallain of the IPA and Mr. P. J. O’Donoghue of your own Department).

We will be very pleased to meet with you or your officials at any time to develop and expand on the foregoing with a view to ensuring that permanent and effective solutions to the problems of cost over-runs on public sector construction projects are obtained as quickly as possible.

Yours sincerely,

Bernard D. Ryan F.R.I.C.S.

CHAIRMAN, QUANTITY SURVEYORS DIVISION.

* made available to the Sub-Committee