Agenda item

(Asset Management & Economic Development Portfolio Holder) To consider the attached report (C-011-2016/17).

(1)        That the tender in the sum of £10,218,000 from McLaughlin & Harvey Construction to carry out the construction of the Epping Forest Shopping Park in Langston Road be agreed;

(2)        That an increase also be agreed in the contract sum for Section 278 Highways works in the sum of £908,208 to the contract awarded to Walkers Construction on 11 January 2016;

(3)        That, in liaison with the Portfolio Holder for Asset Management and Economic Development, the Director of Neighbourhoods be authorised to agree any final variation to the Highways Contract, subject to it being within the current capital budget for this element of the project; and

(4)        That the current anticipated opening date for the Shopping Park of August 2017 be noted.

The Portfolio Holder for Asset Management & Economic Development presented a report on the award of the Construction Contract for the Epping Forest Shopping Park.

The Portfolio Holder stated that the re-tendering of the main building contract for the Shopping Park was carried out under European procurement regulations for a two-stage tender. Three tenders were received on 3 May 2016, and were evaluated by the Project Team including interviews with all three contractors on 26 May 2016. The bid from McLaughlin & Harvey Construction scored 92% during the evaluation process, and its bid of £10,218,000 was below the previously estimated pre-tender cost of the Shopping Park construction works prepared by the Council’s quantity surveyors, Ridge & Partners LLP, of £10,500,000.  This cost was allowed for within the projections contained in the Development Appraisal approved by Cabinet on 11 June 2015. Therefore, it was proposed to award the contract for the construction of the Shopping Park to McLaughlin & Harvey Construction.

The Portfolio Holder reported that amendments to the construction programme for the Section 278 works for the Shopping Park had increased the cost of this contract. The report had requested approval for an increase of £343,053 to the original contract sum; however, further amendments requested by Essex County Council had increased the cost of this contract by £908,208 and approval for this increase was also sought.

The Portfolio Holder disclosed that marketing of the Shopping Park continued with strong interest from a number of quarters, and a number of legal agreements for the lease of various units were with Solicitors for completion. The Grounds Maintenance and Fleet Operations Teams had relocated to the Oakwood Hill Depot and the Langston Road Depot had now been vacated. A combination of the delay to the Highways Works and the need to repeat the tender for the main construction contract had led to the opening date for the Shopping Park to be altered to August 2017.

In response to questions from the Members present, the Portfolio Holder stated that the maintenance works scheduled for the roads in that area had now been deferred for a number of years by Essex County Council, whose approval was needed before the Shopping Park could open. The Council was entering into negotiations with Essex County Council regarding the recovery of some of the costs for the Section 278 Works, and the Council would do all it could to recover some of these costs. The Section 278 Works had not yet started on site. It was reiterated that the contract for the Construction works was within the agreed budget and the Council was getting good value for money from this contract.

The Deputy Chief Executive reassured the Cabinet that the Council’s Quantity Surveyors would examine closely any claims for extra monies for the Section 278 works, and there was an adequate contingency provision in the budget for the Shopping Park to cover the additional costs of these works. The Council’s Consultant also pointed out that, even with the additional £908,208 for the Section 278 Works, this contract had not breached the £4.5million limit for contracts having to follow the EU procurement procedure.

Decision:

(1)        That the tender in the sum of £10,218,000 from McLaughlin & Harvey Construction to carry out the construction of the Epping Forest Shopping Park in Langston Road be agreed;

(2)        That an increase also be agreed in the contract sum for Section 278 Highways works in the sum of £908,208 to the contract awarded to Walkers Construction on 11 January 2016;

(3)        That, in liaison with the Portfolio Holder for Asset Management and Economic Development, the Director of Neighbourhoods be authorised to agree any final variation to the Highways Contract, subject to it being within the current capital budget for this element of the project; and

(4)        That the current anticipated opening date for the Shopping Park of August 2017 be noted.

Reasons for Decision:

To award the main construction contract for the Shopping Park and agree a variation to the costs of the associated S278 Highways Work.

Other Options Considered and Rejected:

To not accept the tender from McLaughlin & Harvey Construction; however, this would delay the works being carried out and therefore the opening of the Shopping Park.

Similarly, to not agree the increased provision for the Highways Works would also delay the opening.