By Giannos Poubouris
- Director of OSEOK
Delays in the implementation of public works projects are a long-standing problem, with repercussions that extend beyond the construction sector. Every delayed project means increased costs, a slowdown in economic growth, repercussions for the labor market, and, above all, a delay in delivering vital infrastructure to society.
The discussion surrounding public procurement is, therefore, of particular importance. The point, however, is not to always look for who is to blame whenever a project runs into problems. We need to examine the entire process—from the moment a project is planned through its completion and delivery—and correct the weaknesses and systemic flaws that consistently cause delays.
To this end, OSEOK has been engaged in ongoing dialogue with the General Accounting Office of the Republic for several months now regarding the modernization of the framework. Discussions are still ongoing, and our Federation looks forward to continuing this constructive dialogue and achieving substantive changes that will improve the waypublic works projects are carried out.
The true success of this effort, however, will be judged in practice: by whether the changes will address the systemic problems we encounter today at every stage of a public contract.
The problem begins before the construction site
When a public project is delayed, the discussion often focuses on the construction phase and the contractor. In reality, however, many of the problems that arise during execution have their roots much earlier—from the study and design phases all the way through to the project’s tender announcement.
In Cyprus, there are a large number of contracting authorities, with varying levels of technical competence, experience, and staffing. While ministries and large government departments have organized technical services, smaller contracting authorities do not always have the necessary expertise to manage complex construction projects.
And yet, managing a public contract requires specialized knowledge at every stage: from preliminary design and cost estimation to the preparation of documents, the call for bids, and, later, the monitoring of project execution.
For this reason, OSEOK recommends the creation, under the Public Contracts Directorate of the General Accounting Office, a specialized technical unit, staffed with engineers, that can provide the necessary support to contracting authorities that lack sufficient technical staff. In this way, rather than each smaller authority being required to manage complex procedures on its own, it will be able to draw on centralized expertise and specialized knowledge.
Equally critical is proper and comprehensive planning prior to the call for proposals. A project should proceed only when its scope is clearly defined and its budget aligns with both its actual needs and available financial resources.
In practice, however, we encounter cases where elements are omitted so that the project remains within a predetermined budget, only to be reintroduced later as additional work. When the scope of work for which the contractor has submitted a bid changes along the way, this inevitably affects the cost estimation, the schedule, and the overall management of the project, creating fertile ground for disputes and delays.
Another important factor is the time required for a public project to come to fruition, which can exceed two or even three years. During this time, market conditions and the costs of materials, energy, and labor may have changed significantly. A budget prepared during the initial planning phase, therefore, cannot be assumed to reflect actual costs at the time of the call for bids.
Consequently, sound planning, appropriate technical support, and up-to-date budgets are required so that public works projects can get off to a solid start. Because the more weaknesses that are addressed before awarding the contract, the less likely they are to turn into disputes and delays during construction.
Professional management at every stage
Signing the contract does not mean that the problems have been solved. How it is managed during construction is just as important.
Those responsible for overseeing a public contract must have the appropriate training and experience to respond promptly to issues that arise.
Delays in providing instructions and clarifications or in making decisions can have a ripple effect on the progress of the project. On a construction site, where crews, subcontractors, suppliers, and machinery must be coordinated on a daily basis, even a single delayed decision can affect the overall schedule.
The same applies to payments. Processing them on time ensures the necessary cash flow to continue operations. Conversely, delays in payments can slow down the project’s progress and increase its cost. Ensuring liquidity is, therefore, a fundamental prerequisite for the smooth and timely completion of projects.
In the context of more effective management, it is also necessary to review obligations incorporated into public contracts regarding the oversight of labor issues by engineers. These matters are governed by the legal framework and monitored by the Department of Labor and Labor Relations. Therefore, engineers’ time and expertise must be utilized where they are most needed: in the technical and contractual monitoring of the project, in quality control, in cost management, and in ensuring adherence to the schedule.
Dispute Resolution Mechanisms
Effective dispute resolution is one of the critical issues in the management of a public contract. Inadequate planning, incorrect cost estimates, changes during execution, or delays in decision-making can lead to disagreements between the contracting parties, with direct consequences for the project’s progress.
In the past, we have seen disputes escalate into years-long legal battles or even lead to the termination of contracts. However, even in a well-planned and organized project, disputes are likely to arise. The goal, therefore, is not to assume that they can be completely eliminated, but to ensure that, from the outset, there is a clear and effective process for their timely management and resolution.
OSEOK supports the inclusion in public contracts of alternative dispute resolution mechanisms agreed upon from the outset by the contracting parties. The goal is for issues that arise to be resolved within short and clearly defined timeframes, without automatically leading to time-consuming court proceedings and without disrupting the smooth progress of the project.
A prime example is the arbitration process, which allows a dispute to be resolved in a short period of time. Thus, a specific dispute can be addressed promptly, without disrupting the schedule, payments, and, ultimately, the completion of the project.
From Identification to Solutions
Public procurement reform requires a comprehensive approach that covers the entire lifecycle of a project: from planning and cost estimation through to awarding, managing, and completing the project.
The progress made in the dialogue between OSEOK and the General Accounting Office creates positive prospects for meaningful changes in this direction. OSEOK will continue to participate constructively in the process, submitting specific proposals for a more modern and effective framework.
The goal is not a system that favors one side or the other, but a clear, fair, and functional framework that will allow all stakeholders to effectively fulfill their roles. Because weaknesses in public procurement do not only burden contracting authorities or industry professionals. Their costs are ultimately passed on to the economy and to society itself.
After all, the success of a public contract is judged by its results: high-quality projects, with realistic costs and timelines, that are completed and delivered on time to the society for which they were designed.
