Agenda item

(The Director of Housing) To consider the attached report (CHB-005-2013/14).

That the Works Contractors for the Housebuilding Programme be procured using the current and any future East Thames EU-compliant Framework Agreement.

The Assistant Director of Housing presented a report regarding the Procurement of Works Contractors.

He advised that a significant part of the House-building Programme was the procurement of the construction works. The Council’s Contract Standing Orders required the Council to undertake competitive tenders for all works over £50,000. However, in addition, EU procurement rules applied to all works contracts where the value was (currently) in excess of £4,348,350.

Members noted that in order to obtain the best value for money, it was proposed that the Council would seek to appoint a Works Contractor on a single contract for each phase of works. This would not necessarily reach the EU limits on a phase by phase basis, but would over the whole of the Programme. As part of the Council’s Development Agency Agreement with East Thames, East Thames had the responsibility for procuring the Works Contractor on behalf of the Council. However, East Thames had already undertaken an EU-compliant procurement exercise to select a list of approved Framework Contractors from which all contractors for their own House-building Programme was tendered and had offered the Council, as part of their tender for Development Agent, the opportunity to use this Framework Agreement, to avoid the necessity of the Council incurring the time and expense to produce a similar document.

The Cabinet Committee was advised that East Thames had taken legal advice from their Solicitors, Trowers & Hamlins, who had confirmed to the Council that the Council could legally use their Framework Agreement, and that its use by the Council would comply with EU procurement rules.

The Assistant Director reported that the Framework Agreement was based on a list of approved Contractors, who had all applied to join the Approved List to undertake construction works, based on a traditional JCT Design and Build Contract. The list was broken down into two separate contracts, one for contracts below £5m and one for contracts above £5m. The estimated value of the Council’s works packages would determine which list of contractors would be invited to tender. There were at least two local contractors on each of the Approved Lists.

The Assistant Director further advised that invitations to tender would be issued to all contractors on the list, who would then provide a competitive bid, which would therefore satisfy Contract Standing Orders.

Decision:

That the Works Contractors for the Housebuilding Programme be procured using the current and any future East Thames EU-compliant Framework Agreement.

Reasons for Decision:

The procurement of works for the House-Building Programme would require the Council to undertake an EU-compliant tender exercise. However, East Thames have already undertaken an EU-compliant tender exercise, which would be available for the Council to use.

Other Options Considered and Rejected:

(1)        To undertake a separate EU procurement exercise, specific to just the Council’s House-building Programme. This would be time consuming and costly.

(2)        Not to undertake an EU procurement exercise, and to let individual works contracts for each site. This would not generate savings through economies of scale and would be much more resource intensive to undertake. It would significantly  delay the period between receipt of planning permission and starting on site.