https://www.irishexaminer.com/breakingnews/ireland/gp-body-call-for-inquiry-and-describe-17bn-cost-of-childrens-hospital-as-national-scandal-898466.html
Last year we were told this thing would cost €983 million. The current ticker reads €1.7 billion.
How did the cost nearly double in so short a time? Was the original estimate a joke? If it was, why are we continuing with this contractor? If you were getting the kitchen done in your house and the builder told you before Christmas it'd cost ten grand, and then he bowls up and says the cost is now twenty grand, you'd run him.
There's a question to be asked as well about why this is being built in the first place. There will be no new beds - the number of beds in this new 1.7-billion-Euros'-worth of hospital will equal the total number of beds in the existing children's hospitals. Where is the money going? The Phoenix magazine speculated last year that the thing is only being built because the consultants want more, or better, or larger, private consulting rooms so they can make more money. If that's the case, why aren't they run out the same road as the builder?
I'm baffled how this isn't a major story.
To me its a couple of things that could have happened
- cost estimate could have been kept low to help the case for it being built.
- whoever prepared the tender package did not have all items included eg a sprinkler system for the hospital was not allowed for, this is just ridiculous and when a contractor has to include items like this the arm is well stuck in by the contractor and installer.
- the design team have alot to answer for and should be hauled before a committee.
I can't promise this is the case, but my experience of public sector tendering (both UK and Ireland), and should offer a few clues.
1: The request for tenders document will be written by a combination of people, each of who is unqualified to understand the scope of the project. 90% of the document will be procurement waffle, 5% will be background to the tendering organisation. 5% will be a woolly specification of requirements, with the only detail belonging to a handful of items that are readily understood.
2: A maximum project budget will usually have been assigned at this stage, but it will have been guesstimated based on the tender values assigned to other recent public sector projects of a loose similarity, and not devised by a QS, and definitely not devised on the actual costs of delivering those projects.
3: To allow these unqualified people to evaluate each response on what is considered equal terms, there will be a minimum requirements threshold I.e. anyone who meets the minimum criteria in terms of similar experience, financial standing, staffing levels, and genera project commitments, is in with a fighting chance of being appointed. Absolute specialisms in a certain area of business will usually not be weighted higher, as this would be biased against younger companies and diversifying companies.
4: After that, the project would usually be awarded on an equation of approach vs costs, that will be heavily weighted in favour of final cost. To give you an example, Tom gets 5 out of 5 for each question, and his quote is still within the allotted budget. He's clearly an en excellent candidate. Bill gets 4 out of 5 in each question. He's clearly nowhere near as good as Tom, but as long as Bill's final costs are 20.1 % lower than Tom's, then Bill will get the contract.
5: But Tom isn't daft; he's been doing this for years. So he knows how to write his response to make sure he gets full qualitative marks, while ensuring that he commits to very few items over and above the minimum specification. He can take a risk of a higher price than his competitors because he knows he's getting full marks. More importantly he knows that the specification is miles off what the project will take. So he knows that if he wins, he will tie whichever public agency it is up in knots straightaway. After a handful of meetings they will learn the error of their ways, and extend the contract to include everything it should have had in the first place.
6: Bill isn't daft either. He might not know how to build things like Tom does, but he knows that his best opportunity to become super successful like Tom is to win this project no matter what. And he also knows that the specification is going to increase tremendously after appointment, which is where the real project profit is. So he goes in at a price that is borderline obscenely low.
7: The unqualified assessors are a bit worried by this price, so they do some due diligence. They find out that Bill is financially sound, has a strong reputation with good references, and after meeting Bill, have been made clear that Bill will absolutely achieve the quoted specification for the quoted price. They award the contract to Bill, and slap themselves on the back for saving the public purse a bundle of dough.
8: Except all they've done is pick less qualified people to effectively learn how to deliver a major project, at a similar ultimate cost, but on a much longer timeline, had they just went and handpicked genuine expertise and asked them to name their price.
Cant argue with any of that wobbler
Public sector procurement is crazy. A few years ago I got a new patio put in with Tobermore paviers. I was chatting about it to a guy who has been involved in some major public realm projects in town centres costing millions. Bizarrely the cost per square meter for my £6k patio was considerably lower than the cost for the £6m public realm project. Hard to understand
Public sector. Say no more. The reason it isn't a bigger story is that public sector budget mismanagement and incompetence is an expectation.
The initial tender was on the basis of incomplete design but enabled the HSE to appoint the "preferred' bidder.
It came down to 2x contractors/ consortiums Sisk and BAM.
So based on the incomplete design BAM won. They priced a schedule of rates against what was an incomplete design.
This procurement process is flawed and open to abuse as you can "load" the tender. For example if you think that the cables are under measured in the tender and that these are likely to treble or quadruple in the final design you could put a "loaded" or disproportionately high rate against this. If the cost was €10/ m for cable but you had a fair idea it would increase you would put €100/m against this rate. You could reduce over measured items to maintain a low overall tender.
I'm speculating this is what has happened as it appears to be mechanical and electrical costs that have increased (which is a dark art area of the business anyhow). They are in negotiations now based on the final design to get a "guaranteed maximum price", ( they sure are getting that!)
A decent QS or some of the projects board members ought to have spotted disproportionate high rates prior to award and questioned these. Major failure at tender stage. In your kitchen analogy it's akin to your builder pricing his rate for tiling at €500/m2 for 10m2 of tiles knowing you'll be doing 30/m2 if tiling rather than 10.
Added to this Grenfil tower has changed the goalposts on fire regulations which would be another chance for garnering a windfall. I believe fire safety designs have changed since tender.
It looks to me that the procurement process chosen was a knee jerk decision but even with the process they chose the HSE still had the chance at pre award stage to question any high rates.
The only way any independent review on this will be of use is if they compare rates tendered where design has increased to actual cost or to the Sisk tendered rates.
https://health.gov.ie/blog/press-release/government-approves-phase-b-construction-investment-decision-for-new-childrens-hospital-project/
It's in Dublin.
I was recently involved (2015 - 2016) in the construction of the new children's hospital in Perth, Western Australia.
These type of projects (new build children's hospitals) are very rare world-wide, so people were talking about the Dublin hospital at that stage.
The cost of that project was AUD1.2b which is approx EUR760m.
Now this hospital was state of the art; with one of the best operating theatres in the world with 12 multi use theatres(all hospitals, not just children's). There are 298 beds, 75% single rooms; parent's beds in each room; fully robotised pharmacy; 3,500m2 green space; parent accommodation suite etc
All of this was built in Perth, one of the most isolated cities in the world.
Looking at the link provided by highorlow the specs seem to be higher, but not overly so. 380 beds (single rooms, in-parent accomm); 18 OTs; etc.
Irrespective of tendering model, it looks like we are not getting value for money.
Quote from: Tony Baloney on January 20, 2019, 09:31:16 PM
Public sector. Say no more. The reason it isn't a bigger story is that public sector budget mismanagement and incompetence is an expectation.
Hardly news to anyone, but the public sector, in the north at least, is a disgrace. I have some experience of it, and from what I saw no-one cared what anything cost as it wasn't their money.
Quote from: thewobbler on January 20, 2019, 08:49:45 PM
I can't promise this is the case, but my experience of public sector tendering (both UK and Ireland), and should offer a few clues.
1: The request for tenders document will be written by a combination of people, each of who is unqualified to understand the scope of the project. 90% of the document will be procurement waffle, 5% will be background to the tendering organisation. 5% will be a woolly specification of requirements, with the only detail belonging to a handful of items that are readily understood.
2: A maximum project budget will usually have been assigned at this stage, but it will have been guesstimated based on the tender values assigned to other recent public sector projects of a loose similarity, and not devised by a QS, and definitely not devised on the actual costs of delivering those projects.
3: To allow these unqualified people to evaluate each response on what is considered equal terms, there will be a minimum requirements threshold I.e. anyone who meets the minimum criteria in terms of similar experience, financial standing, staffing levels, and genera project commitments, is in with a fighting chance of being appointed. Absolute specialisms in a certain area of business will usually not be weighted higher, as this would be biased against younger companies and diversifying companies.
4: After that, the project would usually be awarded on an equation of approach vs costs, that will be heavily weighted in favour of final cost. To give you an example, Tom gets 5 out of 5 for each question, and his quote is still within the allotted budget. He's clearly an en excellent candidate. Bill gets 4 out of 5 in each question. He's clearly nowhere near as good as Tom, but as long as Bill's final costs are 20.1 % lower than Tom's, then Bill will get the contract.
5: But Tom isn't daft; he's been doing this for years. So he knows how to write his response to make sure he gets full qualitative marks, while ensuring that he commits to very few items over and above the minimum specification. He can take a risk of a higher price than his competitors because he knows he's getting full marks. More importantly he knows that the specification is miles off what the project will take. So he knows that if he wins, he will tie whichever public agency it is up in knots straightaway. After a handful of meetings they will learn the error of their ways, and extend the contract to include everything it should have had in the first place.
6: Bill isn't daft either. He might not know how to build things like Tom does, but he knows that his best opportunity to become super successful like Tom is to win this project no matter what. And he also knows that the specification is going to increase tremendously after appointment, which is where the real project profit is. So he goes in at a price that is borderline obscenely low.
7: The unqualified assessors are a bit worried by this price, so they do some due diligence. They find out that Bill is financially sound, has a strong reputation with good references, and after meeting Bill, have been made clear that Bill will absolutely achieve the quoted specification for the quoted price. They award the contract to Bill, and slap themselves on the back for saving the public purse a bundle of dough.
8: Except all they've done is pick less qualified people to effectively learn how to deliver a major project, at a similar ultimate cost, but on a much longer timeline, had they just went and handpicked genuine expertise and asked them to name their price.
That would be my experience also, almost to the letter.
Thanks everyone who replied to this. I am a wiser man now, if not a happier one.
100 years since the sitting of the First Dáil. I wonder if any them would have bothered if they knew we'd end up at this slobbering.
So.... is Simon Harris gonna get away with this?
Quote from: IolarCoisCuain on January 21, 2019, 09:43:04 PM
Thanks everyone who replied to this. I am a wiser man now, if not a happier one.
100 years since the sitting of the First Dáil. I wonder if any them would have bothered if they knew we'd end up at this slobbering.
"To get the government they have now, I wouldn't have lost a night's sleep" Dan Breen
Quote from: thewobbler on January 20, 2019, 08:49:45 PM
I can't promise this is the case, but my experience of public sector tendering (both UK and Ireland), and should offer a few clues.
1: The request for tenders document will be written by a combination of people, each of who is unqualified to understand the scope of the project. 90% of the document will be procurement waffle, 5% will be background to the tendering organisation. 5% will be a woolly specification of requirements, with the only detail belonging to a handful of items that are readily understood.
2: A maximum project budget will usually have been assigned at this stage, but it will have been guesstimated based on the tender values assigned to other recent public sector projects of a loose similarity, and not devised by a QS, and definitely not devised on the actual costs of delivering those projects.
3: To allow these unqualified people to evaluate each response on what is considered equal terms, there will be a minimum requirements threshold I.e. anyone who meets the minimum criteria in terms of similar experience, financial standing, staffing levels, and genera project commitments, is in with a fighting chance of being appointed. Absolute specialisms in a certain area of business will usually not be weighted higher, as this would be biased against younger companies and diversifying companies.
4: After that, the project would usually be awarded on an equation of approach vs costs, that will be heavily weighted in favour of final cost. To give you an example, Tom gets 5 out of 5 for each question, and his quote is still within the allotted budget. He's clearly an en excellent candidate. Bill gets 4 out of 5 in each question. He's clearly nowhere near as good as Tom, but as long as Bill's final costs are 20.1 % lower than Tom's, then Bill will get the contract.
5: But Tom isn't daft; he's been doing this for years. So he knows how to write his response to make sure he gets full qualitative marks, while ensuring that he commits to very few items over and above the minimum specification. He can take a risk of a higher price than his competitors because he knows he's getting full marks. More importantly he knows that the specification is miles off what the project will take. So he knows that if he wins, he will tie whichever public agency it is up in knots straightaway. After a handful of meetings they will learn the error of their ways, and extend the contract to include everything it should have had in the first place.
6: Bill isn't daft either. He might not know how to build things like Tom does, but he knows that his best opportunity to become super successful like Tom is to win this project no matter what. And he also knows that the specification is going to increase tremendously after appointment, which is where the real project profit is. So he goes in at a price that is borderline obscenely low.
7: The unqualified assessors are a bit worried by this price, so they do some due diligence. They find out that Bill is financially sound, has a strong reputation with good references, and after meeting Bill, have been made clear that Bill will absolutely achieve the quoted specification for the quoted price. They award the contract to Bill, and slap themselves on the back for saving the public purse a bundle of dough.
8: Except all they've done is pick less qualified people to effectively learn how to deliver a major project, at a similar ultimate cost, but on a much longer timeline, had they just went and handpicked genuine expertise and asked them to name their price.
Brilliant post.
Take your pick. Building in a difficult site. Underpriced tenders. Specification changes on award of contract. Inflation. Same as many a job i seen except this is on a very large scale. Too many projects undercosted to get business case approval. Strip the life outa the spec to met that unrealistic build cost. Then its a fight all the way to built the damn thing properly to a modern spec. Been alot less on a green field site! The UUJ building in Belfast lost millions b4 they even got out of the ground! As if trial holes didnt show how bad the ground was. Then a farce of 1 contractor doing ground work and another the actual build. The mind boggles on that cluster f**k up here.
Surely a better location for this would have been a greenfield site either around Tallaght or further out towards say Naas instead of trying to build in such a congested location? Even now, they could change location if it wasn't for political reasons.
Last nights Prime Time shed a lot of light on the over run.
They had 3d footage of the inside of the place, Christ they have more circular walls inside and the atrium and lobbies and all else are way over the top. Obviously no one shouted stop on the design, pure vanity. A sick kid and their family won't have much care on the "state of the art" architecture as long as the kid gets cured. It's not a tourist attraction we are building. Whole thing is baffling.
Something nobody has raised yet (not that I've heard in any case) is what the Contract terms were for the Architects / Lead Designers? I'd be interested to see if the designers Contract was fixed price or a percentage of the so called Guaranteed Maximum Price? If it's the latter then they should be brought to account as this extravagant over design has led in part to the cost over run.
Quote from: highorlow on March 06, 2019, 11:01:33 AM
They had 3d footage of the inside of the place, Christ they have more circular walls inside and the atrium and lobbies and all else are way over the top. Obviously no one shouted stop on the design, pure vanity. A sick kid and their family won't have much care on the "state of the art" architecture as long as the kid gets cured. It's not a tourist attraction we are building. Whole thing is baffling.
Sure that is the case in most bloody public buildings these days.
All style, then no money for substance.
I'd argue the exact opposite for a children's hospital. Look and feel of the place is massively important.
Quote from: gallsman on March 06, 2019, 03:42:31 PM
I'd argue the exact opposite for a children's hospital. Look and feel of the place is massively important.
The place existing and being functional would rank higher.
Morale ain't much use if yer dead.
https://www.rte.ie/news/health/2019/0320/1037457-childrens-hospital/
2 to 3 weeks before this famous report is completed.
This is also disappointing;
QuoteMr Barry, who has yet to be formally appointed by Government, has indicated he does not think there is much scope for making savings on the cost of the project.
Its probably too late to square up the building and remove all those oval shapes whereby millions would be saved, likely that planning would have to be re-submitted.
http://www.newchildrenshospital.ie/design-vision/video/
Looks more like a tourist attraction or 5 star hotel rather than a hospital. Architects lost the run of themselves.