Public Procurement Contracts
Dail Éireann — 2026-04-16
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Jack Chambers (FF), Dublin West

A special purpose vehicle is a separate legal entity established for a specific, predefined financial objective. From a public sector perspective, there can be risks with regard to long-term liabilities for defects, maintenance failures or operational issues. The Government has already taken action to address some of these risks. With respect to public works projects, SPVs are extensively used in the area of public private partnerships. They occasionally arise in conventional delivery models in the form of subsidiaries or joint ventures. They may also feature in housing delivery models such as turnkey or development agreements where private developers establish SPVs for specific developments. However, these agreements are contracts to purchase, rather than what would be considered a traditional construction contract.
While SPVs are a legitimate means to limit a business’s liability, careful scrutiny is required in the procurement process so as to ensure that the successful tenderer has the capacity to undertake the contract to completion and to bear the liability that is placed upon them under the contract. Where public private partnerships are concerned that liability can extend to 20 years or more beyond construction of the asset. The PPP company is liable for the maintenance and operation of the asset as well as its handover upon completion to a predetermined standard.
The financial standing of the PPP company and individual members of any joint venture are assessed and minimum financial thresholds for individual members of a joint venture may be specified. In the case of a member of a joint venture or a tenderer who is a subsidiary, if they are unable to meet the financial requirements of the tender, they would normally be required to provide a parent company guarantee. The terms of the contract define the extent of liability that the successful tenderer is required to bear. Under the standard public works contract, that liability may extend to a period of six to 12 years after completion of the asset. The choice will normally be predetermined by the level of complexity associated with the project. The terms of the contract also specify the levels of insurance that the successful tenderer is required to maintain for the duration of the contract.
The standard form of public works contract requires the contracting authority to set a financial cap on liability. Contracting authorities may specify a lesser or greater amount depending on the risk or complexity of the project.

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Source: Houses of the Oireachtas. Licensed under CC BY 4.0 (https://creativecommons.org/licenses/by/4.0/). The Official Report is revised after first publication; the fetch timestamp below identifies the version quoted.

Record URI: https://data.oireachtas.ie/akn/ie/debateRecord/dail/2026-04-16/debate/main
Retrieved: 2026-08-14T04:54:49+00:00
Sitting date: 2026-04-16