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BAM, the main contractor for the National Children’s Hospital, has submitted claims for additional costs worth “hundreds of millions of euros,” the Oireachtas health committee will hear.
David Gunning, the director of the National Pediatric Hospital Development Board (NPHDB), will tell the committee on Wednesday that BAM “has been poor in executing the project and has been extremely assertive when it comes to claims.
“Since the beginning of this project, there have been hundreds of claims for hundreds of millions of euros and the volume and nature of claims on this project is consuming a significant amount of project team and executive time.”
The committee will hear that, in some cases, these claims have been paid, but also that BAM has submitted funding claims “on matters that we believe are within its contractual obligations.”
It will also tell TDs and senators that it is using “all levers” available to “manage and defend claims to protect the public purse.”
The last time the board was before the committee, in November, it said that the delays caused by BAM’s delay in construction works amounted to four months.
It will say on Wednesday that it increased to six months when the site was shut down in March as a result of Covid-19 restrictions.
Commitment
Mr. Gunning will tell the committee that BAM did not reopen works at the site until July 13, seven weeks after it was allowed to do so, and despite “continued commitment to the NPHDB.”
“Despite ongoing commitment to the prime contractor, we still do not have a valid works schedule that is in line with their contractual obligations,” Gunning will say, adding that the NPHDB is withholding 15 percent of the money billed each month. ” until then, how is a compatible program delivered ”.
Mr. Gunning will say that the NPHDB is “interrogating the programs provided by the contractor and evaluating all current and potential cost pressures on the project.”
The contract for the hospital has a guaranteed maximum price, which Mr. Guinning will tell the committee means that the contractor must deliver the project on time “and within the agreed budget.”
“If you don’t do it for any reason, the construction cost must be borne by the contractor,” he will say. Despite this, BAM has been making the additional claims that Mr. Gunning will describe.
“When the contractor is entitled to the costs under the contract, the NPHDB has been complying with the payments, but climates are being made to obtain funds in matters that we believe are within its contractual obligations,” he will say. “We are using every lever available to us throughout the contract process both to pressure the prime contractor to perform, and to manage and defend against claims to protect the public purse,” he will tell the committee.
While there is a dispute management process that deals with complaints, Mr. Gunning will tell the committee that he is limited in how much he can discuss specific issues at stake due to confidentiality clauses. However, a dispute has reached the Superior Court, in relation to the instruction for the construction of Phase B to begin, issued to BAM by the NPHDB on January 8 of last year.
BAM has disputed the validity of that instruction and the dispute resolution process has failed to find a solution. “To rigorously defend the public purse, the NPHDB has had no choice but to take the matter to the Superior Court,” the committee will hear.
That case is scheduled to continue next month. Mr. Gunning will tell the committee that a statement about the hospital design by BAM will be at the heart of the case.
Phelim Devine, project manager at NPHDB, will say that despite the fact that progress has been “slower than projected,” substantial work has been completed at the 12-acre site.
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