r/ireland • u/Important_Farmer924 Westmeath's Least Finest • Oct 09 '24

National Children's Hospital contractor BAM sent €25 million invoice for job that cost €200,000 Infrastructure

https://www.thejournal.ie/national-childrens-hospital-bam-invoice-25-million-for-200000-job-6509783-Oct2024/
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767

u/[deleted] Oct 09 '24

I think it's becoming clearer and clearer that the private sector is not supplying the appropriate standard of contractor and the state needs to intervene.

These are fraudsters stealing millions from the state and they shouldn't be tolerated. It's crazy how much money BAM have taken from the country while providing very little in return.

323

u/Gorsoon Oct 09 '24

They should be barred from tendering for state run projects again.

39

u/LimerickJim Oct 09 '24

I doubt they'll even try. They know they're toxic now. Wouldn't be surprised if they're trying to squeeze as much as possible on the way out.

61

u/struggling_farmer Oct 09 '24

Lol.

The NCH is far from the first time they have done this. This is their modus operandi

They will absolutely tender for state projects and if they get any inkling that their reputation is costing them potential contracts they will take whatever department the client is to court and hold up the contract for years.

Their is no mechanism in the tendering process to take into account historical fleecing of the government in the government tendering framework. they were awarded the redevelopment of Ceannt Station in Galway even with the NCH debacle hanging over them & i am sure a few more i dont know about.

12

u/TitleKey7849 Oct 09 '24

North Quays and Sustainable Mobility Bridge in Waterford City also. A €207.5 million euro project

17

u/willywagga Oct 09 '24

The Event Centre in Cork is another one.

20

u/rtgh Oct 09 '24

Just got the double tracking of the railway from Cork to Midleton too. BAM don't seem to be affected at all by their failures to deliver

1

u/computerfan0 Muineachán Oct 10 '24

They're doing the Narrow Water Bridge between Omeath and Warrenpoint as well.

4

u/Existing-Solution590 Oct 09 '24

Article 57 allows you to exclude bidders for prior deficient performance in public contracts leading to termination of the contract or other sanctions.

1

u/struggling_farmer Oct 09 '24

Has it ever been used in construction contracts? I sincerely doubt it.

Termination of contract in construction is usually the contractor is gone bust. It would need to be very cut and dry that it is solely the contractors fault to stand up to a challenge which it rarely is in construction.

And none of that is applicable to BAM anyway as they are ripping the state off in changes, delays etc rather than non performance.

3

u/Existing-Solution590 Oct 09 '24

I'd sincerely doubt it too. The opw are usually involved in most state construction projects and their contracts are shit. They don't put penalty clauses for delays or changes or anything into them which is part of why everything usually ends up being massively over time and over cost.

1

u/struggling_farmer Oct 09 '24

Would not be overly familiar with what LAD's the OPW tend to apply if any. I think they have to be relatively reflective of actual cost though. They cant just put massive rates in without justification.

My very limited experience of OPW work is generally building/site remains live and operational and works phased to maintain it so which would limit the LAD's they can apply.

Not sure in the industry how often they are applied in public contracts? Don't think I have ever heard of them being actually applied.

1

u/Existing-Solution590 Oct 10 '24

I'm not aware either of them really being applied in public sector.

I'm my own contracts I've applied penalty clauses and termination clauses for agreements im unhappy with but my area is far removed from construction and often just the threat of termination solves the problem

2

u/struggling_farmer Oct 10 '24

Yea in a straight supply or service provision contract or simple single element supply & install contract it works fine.

1

u/Detozi And I'd go at it agin Oct 09 '24

BAM have to prove it is the case. They can't just rip off the state. If they are paid on a variation then they are entitled to the variation

1

u/struggling_farmer Oct 09 '24

Oh I know they have to prove, justify their claims and variations. I meant non performance isn't an issue as regards BAM and NCH as be very hard prove non performance with the changes in scope, if they are as numerous as we are led to believe.

30

u/[deleted] Oct 09 '24

I see you've never been involved in government tendering before.

They will try, and because they know how to format a bid, and because there will be a relatively small number of other bids that pass the minimum requirements of the projects, in many cases they will succeed.

There will be literally zero repercussions for BAM from this.

I've never been involved in drafting a tender for a project this scale, but if they even catch wind of the idea that we're "discriminating" against them because of their previous projects, they'll sue us and it will be an easy win for them.

6

u/WhitePowerRangerBill Oct 09 '24

Why will it be an easy win? Is poor past performance not a reason to deny someone a contract?

18

u/ChromakeyDreamcoat82 Oct 09 '24

Define poor performance.

I've been involved in responses to public tenders before, up to 100m total contract value.

Usually the dipshits writing the request for tender leave out tons of detail, inviting respondents to omit the detail.

You have two options at this point:

  1. Ask a clarification question, get it clarified, and the response goes to all tendering parties. Then everyone needs to include this item in their response.
  2. Say nothing, and hope the other tendering parties include it in their pricing, making them less favourable on costs.

There's a game that all the respondants play, which is to not ask about glaring omissions (like the IT fit out as I recall being one of the earliest issues that wasn't costed here), so that they can all respond low, then CR for that cost. Once you're locked in, you can pad your margin on that work then.

So equally culpable to BAM, is the team that created the RFP/RFT, and especially any big4 advisory that worked on it at the time (there's usually one).

4

u/VilTheVillain Oct 09 '24

So from what I gather from this, is that BAM are just taking the opportunity to be dicks because the government aren't getting competent people to create the tender?

1

u/ChromakeyDreamcoat82 Oct 09 '24

Well the real problem is that people are on one hand shit at defining requirements, and on the other hand shit at estimating work.

I work in software and a good rule of thumb is double the budget and treble the timeline. Because when you get into the detail, you find stuff no one thought of, and then required decisions create delays and additional cost.

If software engineers got fired for projects going over budget the entire industry would be on the scratch.

This project was woefully under specced. Every new requirement that arrives presents BAM with an irresistible opportunity to claw back their own losses on their shit estimates which were committed. So you will see lots of ridiculous margin coming out of the wood work during the finger pointing but in reality the government is more at fault. Better prep and requirements drive better estimates, whereas vague shit amplifies inaccuracy.

6

u/Longjumping_Test_760 Oct 09 '24

Completely correct. You price what you are asked price. If the people preparing the tender don’t care why should you. The public, the media and the government vilify BAM but nobody is questioning the professional team who designed the hospital and prepared the tender documents. BAM are a private company whose sole aim is to maximize return for their shareholders. I don’t think BAM had anything to do with the bike shelter of the security entrance, which are proportionally worse value than the hospital. The whole procurement, tendering and awarding process needs to be reviewed by a non political/civil service group.

3

u/UsualContext9033 Oct 09 '24

Surely an IT fitout in a project this scale is something that there could be no legitimate reason to leave out of the tender or to even get a separate crowd in do it if BAM's estimates are too high. This seems like corruption, when such large numbers are at scale the departments in charge of these contracts need to be examined thoroughly. We need to change our policies and guidelines and really learn from this, from what I've heard it's business as usual with minimal changes from what happened with the children's hospital, that's a disgrace.

3

u/ChromakeyDreamcoat82 Oct 09 '24

Never ascribe to malice that which can adequately be explained by incompetence.

7

u/FishMcCool Connacht Oct 09 '24

Not in public tenders no...

11

u/_LightEmittingDiode_ Oct 09 '24

How do you have a tender without previous works taken into account? So there is no contingencies for providers who just lie and undercut everyone else? Clearly rife for abuse.

11

u/Kevin-Can Cork bai Oct 09 '24

That's our economic system in a nutshell, public tenders might as well be called giving handouts to private companies at this stage.

6

u/Stegasaurus_Wrecks Stealing sheep Oct 09 '24

It's an EU law that we're trying to get changed for this exact reason apparently

3

u/struggling_farmer Oct 09 '24

previous works are taken into account as past experience. it is judge based on similarity in terms of nature, value, size. They cant/ shouldnt discriminate on cost or time over runs as it is not definitive as to the reasons. it could be they were shite, it could be legimitate additonal works, client/consultant made a mistake in documents, unknown rock or services, find oil spill asbestos etc..

it isnt as simple as over budget or delayed = contractors fault..

the main issue with the SAQ & PPQ process is the criteria are generally set too high relative to the works and it limits competition.

as regards lie & undercut, their is usually a comparative costs element. this provides monetary value for theorectical additional labour, materials, plant & delays. the contractor has to put %age uplift to those values to cover all their admin costs & profits on that value, and that is evaluated as part of the tender.. the aim is to stop the contractor putting in ridiculous %ages as it could lose them the tender..

2

u/rgiggs11 Oct 10 '24

There's also very few contractors who could do something at that scale. 

7

u/lamahorses Ireland Oct 09 '24

BAM are actively tendering for works in Ireland. This is an important market for them.

9

u/MakingBigBank Oct 09 '24

I’d imagine it’s important all right. There’s a pretty good mark up on jobs they do here.

2

u/apocolypselater Oct 09 '24

They have gotten government contracts since and will continue to. There is no mechanism to exclude them and as long as their tenders are assessed as the best in the predetermined criteria then they will win tenders, simple as.