The National Children's Hospital Ireland (NCHI) project is the most significant capital investment programme undertaken in the healthcare system in the history of the State. Timely completion of the project is a Government priority, everything possible is being done to ensure this world-class hospital will open as quickly as possible, on behalf of children, young people, and their families.
The main cause of delay has been the contractor BAM’s failure to adequately manage and resource the project and maintain effective quality assurance processes in the delivery of the works. The National Paediatric Hospital Development Board (NPHDB), on behalf of the State, continues to engage with BAM across all aspects of the project and is utilising all available contractual and legal levers to secure timely completion and protect the State’s interests.
Lessons learned from the project have been arrived at and captured from the findings of commissioned project reports, most notably the independent 2019 PwC report, the HSE’s experience, and direct engagement with the NPHDB. These lessons have been shared with the Department, across Government and the wider public sector. This has included strengthening the Public Spending Code and its subsequent replacement the Infrastructure Guidelines (2023), updates to the PW-CF1 contract and in the progression of other major capital projects, including revised approaches to establishment the new National Maternity Hospital (NMH) project.
Public procurement rules are set through a combination of EU law, Irish legislation, and Government procurement policy. The foundation of Irish public procurement law comes from European Union Directives i.e. Directive 2014/24/EU (general public sector procurement), Directive 2014/25/EU (utilities sector), Directive 2014/23/EU (concessions). These directive establish principles such as Transparency,
Equal treatment, Non-discrimination, Proportionality and Competition.
These directives are given legal effect in Ireland through statutory instruments, including:
European Union (Award of Public Authority Contracts) Regulations 2016 (S.I. No. 284 of 2016)
European Union (Award of Contracts by Utility Undertakings) Regulations 2016 (S.I. No. 286 of 2016)
European Union (Award of Concession Contracts) Regulations 2017 (S.I. No. 203 of 2017).
These regulations set out the legal procedures public contracting authorities, including the Department of Health and HSE must follow when purchasing goods, services, or works above the relevant EU thresholds.
The Capital Works Management Framework (CWMF) is the Government's framework for managing the procurement and delivery of public works projects. It provides a standardised set of contracts, guidance, templates, and procedures for public sector bodies spending public funds on construction projects. Health capital projects follow the CWMF processes and guidance.
The relocation of the National Maternity Hospital (NMH) from Holles street to Elm Park project is a large and complex capital investment project. Design of the NMH is complete and NMH main works will be delivered as an employer-designed contract under the CWMF PW-CF1 form of contract in line with the requirements of the Infrastructure Guidelines.
Learnings from the experiences of the NPHDB, the HSE and my Department on the NCHI project brought about proposed amendments to the PW-CF1 contract for the NMH project. In February 2024 these proposed changes were brought to the Government Construction Contract Committee (GCCC) for approval. Changes and revised approaches agreed by the GCCC included:
• Implementation of a pre-construction services agreement (PCSA) for the period between the identification of the preferred main contractor tenderer and the signing of the construction works contract. This process recently concluded on the NMH project.
• A time limit of 60 days within which to refer disputes to arbitration.
• Different rates of delay costs applicable to the contractor for different periods or parts of the Works.
• A minimum value of cost before a claim can be triggered has been increased from €500 to €2,500. This should limit the volume of minor claims.
My Department and the HSE continues to use experience gained from the NCHI capital project on other projects including the NMH project. There is continued ongoing engagement between the NMH project team and the NCHI Project Director. The NMH project team has established an NCHI Lessons Learned register to ensure recommendations from its ongoing engagement with the NCHI team are recorded and addressed, as appropriate.
No major infrastructure project can be entirely free from risk. The experience from the NCHI project and the changes it informed are intended to strengthen governance, improve project oversight, enhance risk management, and support more effective delivery of major health infrastructure investments in the future.