The Cabinet has approved proposals to address the impact of price inflation on materials in the delivery of public building projects.
Minister for Public Expenditure and Reform Michael McGrath presented measures to Government that included reducing the fixed price period for tenders from 30 to 24 months.
Difficulties have arisen for a large number of contractors who have committed to a fixed price tender but experienced unprecedented cost increases in materials such as wood and steel.
It is understood that several ministers are worried about the impact of this inflation on the delivery of the €165 billion National Development Plan.
It is understood that several ministers are worried about the impact of this inflation on the delivery of the €165 billion National Development Plan.
Minister McGrath also proposes a mechanism to compensate contractors when material costs increase by more than 15%.
It is intended that the State will also be in a position to benefit from a fall in material prices should that arise.
There will also be a way of adjusting tender prices in the period leading up to the awarding of a contract to take account of the rising cost of materials.
