Further to Minute 69 of the meeting held on 19 February 2018, the Director of Environment and Neighbourhood Services submitted a report seeking approval to award a contract as part of the project to replace the existing water storage facility, water supply mains and distribution pipework at the Coley High Rise Flats in Wensley Road, incorporating the installation of a new fire suppression sprinkler system to each block of flats.  The report also sought approval for a revised allocation of capital expenditure to the works.

The report explained that a full design, specification and schedule of works documents had been carried out and planning approval obtained. A procurement exercise had been undertaken using the Fusion21 Framework, which was specific to the type of works which the Council wished to carry out and gave direct access to pre-approved specialist contractors.  Unfortunately only one tender return had been received, from United Living, in the sum of £3,354,375.  Following the Grenfell Tower fire there had been a continued growth in demand for this type of large volume works, and contractors had a shortage of available resources to tender and undertake works.  There had consequently been an increase in the expected costs of the new water storage facilities and the sprinkler installations and various associated works from specialist nominated suppliers.

The report explained that a retendering exercise via the framework could be undertaken, but that it was unlikely that a better response or cheaper tender would be received, and given the urgent nature of the works it was not an option to wait and see if the market would rebalance at a future date.  Where only one or limited tender responses had been received the framework agreement allowed for a post tender value engineering process, and the tenderer had indicated that they would be open to this process, for which there would be no cost to the Council.

The report therefore sough authority to enter into a value engineering exercise with United Living and, subsequently, to award the contract for the works.  A reduction in spend would be sought without compromising the effectiveness of the systems, but spend approval was sought up to the full tender sum.  Works on site were expected to commence in June 2019 and the contractors had proposed a reduced contract period to complete the work within 12 months.

Resolved –

(1)     That the Head of Housing and Neighbourhood Services, in consultation with the Lead Councillor for Housing, be authorised to enter into a negotiation and value engineering exercise for the works as tendered and award the contract for the replacement of water storage, mains water supply and distribution pipework and the installation of fire suppression sprinkler systems at flats at Coley High Rise, Wensley Road;

(2)     That a revised capital expenditure of up to £3.35m in the Housing Revenue Account across the financial years 2019/20 and 2020/21 be approved.