State agencies criticised for not shopping around

State capital projects often cost more than they could because State agencies do not carry out detailed research when selecting engineering or construction firms, the Competition Authority said today.

In its final report into the engineering profession the authority found that the profession has low entry barriers and light regulation which promotes competition.

However, the authorities' examination also found that not all buyers of engineering services take full advantage of the competition within the sector, in particular public bodies and smaller buyers.

By obtaining quotations from rival service providers rather relying on professional organisations to provide information, the cost of projects could be reduced and competition enhanced, the authority said.

It also cautioned against basing construction contracts on a percentage of the overall cost of the project, recommending competitive tenders instead.

Mr John Fingleton, chairman of the authority said the "engineering profession in Ireland, and their clients, have benefited from a light regulatory structure."

"This has produced high quality of service domestically and allowed Irish based engineering companies to compete internationally."

"This profession illustrates how competition supported by direct regulation of quality can produce value and quality for customers of professional services," he said.

The report also noted that nine out of ten concerns raised in an interim report by the authority had been addressed by the professional organisations, the Institution of Engineers of Ireland (IEI) and the Association of Consulting Engineers (ACEI).

Before any additional regulation is imposed on the engineering sector, the authority suggested that the Department of Environment should undertake a regulatory impact assessment.

To assist buyers compare the relative quality of engineering services the competition authority suggests an independent complaints body. Both engineers and non-engineers would sit on such a forum.

Today's report is the first of a series into the eight professions - doctors, dentists, optometrists, vets, architects, engineers, solicitors and barristers following an OECD Report in 2001, which suggested competition in the professions could be stronger.