Committee Reports::Report No. 15 - Institute for Industrial Research & Standards::01 July, 1986::Appendix

Appendix 4

Report of the Minister for Industry, Trade, Commerce & Tourism to the Dáil on 30 May, 1984.

On 27th January, 1983, I announced in the Dáil that I would have an indepth Enquiry carried out into the cost overrun on the IIRS Administration/Information Technology Building (“A” Building) at Ballymun. The Building which was commenced in 1979 was due for completion in 1982. However, in August of that year, it became clear that while the funds allocated to the Building were almost entirely spent, the work was far from complete. The Enquiry was undertaken by the Minister of State at my Department, Mr. Edward A. Collins, T.D., with the assistance of a Panel of Advisors.

The Report of the Enquiry is confidential and I do not intend to publish it.

The Enquiry established that:-

(i)When the first stage of the IIRS Ballymun Building Programme commenced in 1974, involving work amounting to £992,000, a contract was placed on the basis of competitive tenders. It also provided for the retention of the contractor for Stage 2 of the work which related to the “A” Building, subject to satisfactory performace. This is a common practice and can be the most cost effective met.

(ii)The contract for the “A” building was based on a Bill of approximate Quantities (this provided an outline sketch of the estimated work and material that would be required but where the design of the project had not been finalised). The use of unfinished design work and incomplete costings, together with the retention of the contractor for Stage 2 of the Building Programme was not an appropriate method of undertaking such a large capital project.

(iii)The Design Team headed by the outside Architect grossly underestimated the cost of the building and did not bring this to the notice of the Institute until August, 1982. The Department was only then advised.

(iv)The Board of the Institute apparently gave only very cursory consideration to the “A” Building project and accepted seriously defective reports on its progress and cost.

(vi)The Board and some members of senior management at the Institute must be held to be negligent for (a) failing to have the project fully designed and costed at a preliminary stage; (b) failing to examine in detail and to recognise the serious errors and inadequacies in reports furnished to them or to oversee the project properly; (c) failing to interpret information available to them which would have brought to light the under-estimation by their professional advisor; (d) operating an unsatisfactory method of determining the annual estimate for the Institute’s Building Programme.

(v)My Department did not concern itself with relating requests for funds to the estimated overall cost of the Building and must bear responsibility for not seeking the fullest possible information on the project.

The Enquiry has clearly established that there were major deficiencies in planning and monitoring the construction of the Building. I will shortly discuss with the Board of the Institute the question of appropriate disciplinary procedure. The Report of the Enquiry set out procedures to be followed by my Department and the semi-State bodies under its aegis on future Building Programmes. These procedures have been adopted with a view to avoiding a similar occurrence.

Because of the manner in which the Building was planned, the changes to the design that were made during construction and the degree of extravagance in fitting out parts of the Building, the final cost of £7.9m. will exceed the cost of similar Government accommodation. However, in its present condition the second phase of the Building is unusable and, unless the situation is rectified, it would represent a wasteful use of Exchequer funds. Accordingly, the Government have agreed that the Building should be completed and fitted out at a cost of £1.422m. This amount had been provided in the 1984 Estimates for this purpose.

The level of office accommodation exceeds the current needs of the Institute. I have requested the Institute to examine the possibility of using the excess space for laboratory use and to report to me at an early date.