Public-sector entities Cost overruns increase
There has been a 7.5 per cent increase in the number of public-sector entities that have reported cost overruns or contract variations, resulting in $2.59 billion in unprogrammed spending by taxpayers.
The increase was disclosed in the Office of the Contractor General’s 27th annual report, which was tabled in Parliament last week.
The report said in 2013, it requisitioned 200 public bodies, 49.5 per cent of which indicated that there were no cost overruns or variations.
However, this is worse than the previous year when 57 per cent of 198 public-sector entities requisitioned reported no cost overruns or contract variations.
The data submitted by public bodies to Contractor General Dirk Harrison, reveal that in 2013, the combined goods, works and services, contracts were at approximately $19 billion.
The contractor general found that overruns cost taxpayers $499 million and variations resulted in an additional $2.1 billion being spent.
The data indicate that the procurement of works has the highest percentage of cost overruns, followed by goods then services.
And the OCG is again recommending that a greater level of diligence be undertaken at the pre-contract stage of the procurement process to significantly reduce the occurrence of cost overruns and variations.
It says there needs to be greater supervision during the implementation state of the contract.
Meanwhile, Harrison has blamed several project delays in the public sector on poor performance and tardiness by contractors.