Monday , November 29 2021

The children’s hospital contractor is looking for “hundreds of millions more”


The main contractor at the National Children’s Hospital has lodged claims against the BAM’s “hundreds of millions of euros” in additional costs, the Oireachts health committee will hear.

David Gunning, chief officer of the National Commission for the Development of Pediatric Hospitals (NPHDB), will tell the committee on Wednesday that BAM “has not provided any training on the execution of the project and has been very assertive in the face of claims.

“There have been hundreds of millions of claims since the start of this project for hundreds of millions of euros and the large volume and nature of claims for this project consumes a lot of time for executives and project teams.”

The Commission will hear that in some cases these claims have been paid, but also that BAM is making funding requests for “matters that we believe are within contractual obligations”.

He will also tell TD and the Senators that he is using “all the levers at his disposal” to “manage and defend claims, to protect public money.”

The opening statement shows that management was told by BAM in November last year that it was four months behind schedule. That increased to six months after the site closed in March as a result of Covid-19 restrictions.


Mr Gunning will tell the committee that BAM will not reopen the works until July 13, seven weeks after the permit was granted, and that it has “made a constant commitment to the NPHDB”.

“Despite our ongoing commitment to the main contractor, we continue to invalidate the works program that is in line with the contract obligations,” Gunning said, adding that NPHDB retains 15% of the monthly billed money as a compatible program is delivered.

Gunning will say the NPHDB “interrogates the programs provided by the contractor and assesses all current and potential cost pressures on the project.”

The hospital contract is guaranteed at a maximum price, and Guinning will tell the committee that the contractor must deliver the project “and within the agreed budget” within the specified timeframe.

“If it does not do so for any reason, the cost of construction will be borne by the contractor,” he will say. However, BAM has been making extraordinary claims that Gunning will describe.

“When the contractor is entitled to the costs of the contract, the NPHDB makes payments, but they are financing the climate in matters that we believe are within the scope of the contractual obligations,” he will say. “We are using all the levers available to us through the contract both to give performance to put pressure on the General Contractor and to manage and defend claims to protect public money,” he told the committee.

Although there is a dispute management process to deal with claims, Gunning will tell the committee that it can discuss specific issues at stake as a result of confidentiality clauses. However, a lawsuit has been filed in the High Court regarding the instruction to begin construction of Phase B construction by NPHDB on January 8 last year to BAM.

The BAM has debated the validity of this instruction, and the conflict resolution process has not found a solution. “To defend the rigor of public money, the NPHDB has been left with no choice but to bring the case to the Supreme Court,” the commission will hear.

The case is set to continue next month. Mr. Gunning will tell the committee that BAM will have a claim about the design of the hospital at the heart of the case.

NPHDB project director Phelim Devine will say that although progress is “slower than anticipated”, significant work has been completed on the 12-hectare site.

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