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JOINT REPORT OF STRATEGIC DIRECTOR FOR SUSTAINABLE REGENERATION AND OPERATIONS DIRECTOR URBAN VISION
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TO SUSTAINABLE REGENERATION SCRUTINY COMMITTEE –3rd October 2011
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TITLE:Re-thinking Construction Partnering: Value for Money – New Build and Refurbishment Projects
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RECOMMENDATION:That Sustainable Regeneration Scrutiny Committee notes the Value for Money principles for demolition projects as outlined in this report where the principles of Sir John Egan’s report ‘Rethinking Construction’ (1998) has been applied.
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EXECUTIVE SUMMARY:
In February 2011 Members were provided with anover-arching report on the background to Re-thinking Construction and how this had been developed by the Council. Members may recall that the Council has a number of categories of construction or construction related services that have been subject to the partnering principles.
This report focuses on the New Build and Refurbishment projects, in effect this type of work covers three categories of framework partnering that are divided into value groups; details of which are in paragraph 2.1. The benefits and value for money gained through the partnering relationship are detailed within the report.
It was agreed earlier this year that these reports would be submitted quarterly, due to arrangements around recess and dates of meetings this report is being submitted along with one relating to Civil Engineering and Highways.
Re-thinking Construction is the Council’s Construction Partnering Programme, managed on a daily basis by Urban Vision Partnering Limited so as to use the technical skills and knowledge required for the construction projects that are undertaken.
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BACKGROUND DOCUMENTS:
(Available for public inspection)
Report to the Lead Member for Development Services entitled “Procurement of Construction”- 10th March 2003
Report to the Lead Member for Housing entitled “Procurement of Construction”- 21st March 2003
Report to the Lead Member for Development Services entitled ‘’Re – thinking Construction Progress Report’’ – 7th July 2003
Report to Sustainable Regeneration Scrutiny Committee – 7th February 2011; 9th May 2011
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KEY DECISION:NO – report submitted for information
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KEY COUNCIL POLICIES:
- Connecting People to Opportunities, Salford’s Sustainable Communities Strategy; and
- Procurement Strategy.
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EQUALITY IMPACT ASSESSMENT AND IMPLICATIONS: There are no direct implications
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ASSESSMENT OF RISK: Low
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SOURCE OF FUNDING: Each project issubject to separate funding arrangements
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LEGAL IMPLICATIONS : There are no direct legal implications
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FINANCIAL IMPLICATIONS: Each project is subject to separate budget reporting
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OTHER DIRECTORATES CONSULTED:All Directorates participate in the governance structure for this form of partnering and in their respectiveproject meetings
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CONTACT OFFICERS:Pauline Lewis Tele. No.0161 686 6281
Simon Hardy 0161 779 6035
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WARD(S) TO WHICH REPORT RELATE(S): No direct implications
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Background
1.1In 1998 Sir John Egan produced his report, Rethinking Construction where he
significantly identified the need to replace competitive tendering with long term
relationships based on clear measurement of performance and sustained
improvements in Quality and Efficiency, in other words advocating, “Partnering”,
as a way forward. The Council first advertised and implemented the
recommendations on procurement of construction and construction-related
projects in 2003 two of theNewBuild and Refurbishment projects were included
as part of the portfolio of worksubject to the advertisement placed in the
European Journal, the third categorywas advertised later following a
reassessment and projection of potential futureneeds.
1.2This strategy continued to ensure the Council was compliantwith recommendations in the Government’s National Procurement Strategy.
1.3It should be acknowledged that officers in the Council and/or those seconded to Urban Vision have gained considerable knowledge about construction partnering through the management of the existing frameworks. This knowledge and experience is being used to assist other local authorities who have implemented, or are in the process of implementing, the same or similar models to the one Salford City Council adopted.
2.0 The Categories and Companies appointed to categories
2.1 To ensure that there was a manageable distribution of work across the range of new build and refurbishment projects three categories of work were created. The first two categories advertised in 2003 were:
CATEGORY / CONSTRUCTION PARTNER APPOINTEDNew Build and Refurbishment (Value range £125k-£500k) / Seddon Construction Limited
New Build and Refurbishment (Value range £125k-£500k) / Warden Construction Limited
New Build and Refurbishment (Value range £500k - £5m) / Cruden Construction Limited
New Build and Refurbishment (Value range £500k - £5m) / Seddon Construction Limited
2.2A rigorous selection process was undertaken which focussed on the key drivers for change and where the tendering process elevated Qualityabove Price.The appointment of these companies was approved by Lead Member Planning for a period of five years with the potential, at the Council’s sole discretion, of extending the appointment for a further two years.
2.3As the Council approached major changes in funding arrangements, particularly in respect of the building of schools (Building Schools for the Future Programme) a decision was taken that a further category for significant new build and refurbishment would support the Council in its aspirations for development and regeneration throughout the city. It was also recognised that in general there were benefits to be gained from another category being created as there were projects emerging that would be outside the existing scope of partnering frameworks; to maximise the benefits of these developments a partnering approach was considered preferable. Therefore approval was sought for the creation of a category for significant new build and refurbishment with a value range of £5m-£30m, the same rigour and drivers were used in the selection process. The period of this appointment is shorter than the original advertisement as European Directives had been amended; restricting the length of time a framework can operate. Frameworks are now limited to an operational period of four years with no extensions permitted.
2.4 The companies appointed to this category are:
CATEGORY / CONSTRUCTION PARTNER APPOINTEDNew Build and Refurbishment (Value range £5m-£30m) / Seddon Construction Limited
New Build and Refurbishment (Value range £5m-£30m) / Laing O’Rourke Limited
New Build and Refurbishment (Value range £5m - £30m) / Cruden Construction Limited
2.5Governance arrangements for collaborative working in the partneringarrangements are through separate Principals Group and Framework Management meetings. Clients from across the Council attend these meetings and they are a key focus for communication, debate and collaboration.
3.0 Project allocation
3.1Projects are initially allocated to a specific framework based on:
- Type of work
- Estimated value or budget of work.
3.2 If the work is of a ‘specialist nature’ or a ‘one trade project’ then consideration is
given to tendering the works to avoid paying a Contractor simply for managing
such a specialist/single trade Contractor. Each project which could fall into this
category is assessed individually.
3.3 Once a project has been allocated to a specific framework it is then allocated to a
specific contractor within that framework after taking into account the following
factors:
- Open discussion with the Contractors for their views, time permitting
- The Contractors experience in that type of work
- The Contractors capacity during the proposed project programme
- Clients viewpoint
- An equal sharing of the work between the framework contractors if possible.
3.4 Quarter 1 2011 (1st January 2011 – 31st March 2011)
This section shows the allocation of work to individual partners for Q1 2011
distributed as indicated in section 2.0.
New Build Framework (£125K - £500k)Partner / Period / No. Projects Allocated / Value of projects allocated / % of Works
(value) / Comment / Further information
Seddon / Q1 2011 / 1 / £495,776 / 100% / St Sebastian’s Community Hub
Warden Construction / Q1 2011 / 0 / £0 / 0% / Target Cost used for value of projects allocated.
Major New Build Framework (£500,000 - £5Million)
Partner / Period / No. Projects Allocated / Value of projects allocated / % of Works
(value) / Comment / Further information
Cruden / Q1 2011 / 0 / £0 / 0% / Target Cost used for value of projects allocated.
Seddon / Q1 2011 / 0 / £0 / 0% / Target Cost used for value of projects allocated.
Major New Build Framework (£5Million - £30Million)
Partner / Period / No. Projects Allocated / Value of projects allocated / % of Works
(value) / Comment / Further information
Cruden / Q1 2011 / 0 / - / 0% / -
Seddon / Q1 2011 / 0 / - / 0% / -
Lang O’Rourke / Q1 2011 / 0 / - / 0% / -
3.5 Quarter 2 2011 (1st April 2011 – 30th June 2011)
This sectionshows the allocation of work for individual partners for Q2 2011, again based on methodology detailed above. The allocation periods are start on site dates. The significant reduction in the number of projects commenced reflects the current construction climate.
New Build Framework (£125K - £500k)Partner / Period / No. Projects Allocated / Value of projects allocated / % of Works
(value) / Comment / Further information
Seddon / Q2 2011 / 0 / £0 / 0% / Target Cost used for value of projects allocated.
Warden Construction / Q2 2011 / 0 / £0 / 0% / Target Cost used for value of projects allocated.
Major New Build Framework (£500,000 - £5Million)
Partner / Period / No. Projects Allocated / Value of projects allocated / % of Works
(value) / Comment / Further information
Cruden / Q2 2011 / 0 / £0 / 0% / Target Cost used for value of projects allocated.
Seddon / Q2 2011 / 0 / £0 / 0% / Target Cost used for value of projects allocated.
Major New Build Framework (£5Million - £30Million)
Partner / Period / No. Projects Allocated / Value of projects allocated / % of Works
(value) / Comment / Further information
Cruden / Q2 2011 / 0 / - / 0% / -
Seddon / Q2 2011 / 0 / - / 0% / -
Lang O’Rourke / Q2 2011 / 0 / - / 0% / -
4.0Projects completed Quarter 1 2011
4.1 This section shows the projects completedacrossall three categories for
Q1 2011 and Q2 2011. The closedownmeetings may not have occurred for
some of these projects.
New Build Framework (£125K - £500k)Partner / Period / No. Projects Completed / Value of projects (Target Cost) / Value of projects (Estimated Final account)
Seddon / Q1 2011 / - / - / -
Warden Construction / Q1 2011 / - / - / -
Major New Build Framework (£500,000 - £5Million)
Partner / Period / No. Projects Completed / Value of projects (Target Cost) / Value of projects (Estimated Final account)
Cruden / Q1 2011 / 4 / Greenheys Rd. £1,332,276 / Greenheys Rd:- 13nr new Code 4 Standard houses
£1,578,093
Newcombe Dr. £780,390 / Newcombe Drive – 6nr new Code 4 Compliant houses
£1,941,978
Manchester Rd. £597,360 / Manchester Rd – 6nr new Code 4 Standard houses
£693,022
Light Oaks £1,337,725 / LightOaksPrimary School – new kitchens & ICT suite
£1,195,000
Seddon / Q1 2011 / 7 / Bridson St. £2,165,300 / Bridson St – 20nr new Code 4 Standard houses
£2,165,850
Cemetery Rd £524,190 / Cemetery Rd.- 5nr new Code 4 Standard houses
£699,021
The Withies £1,174,100 / The Withies – 14nr new Code 4 Standard houses
£1,182,486
Duchy Rd £738,150 / Duchy Rd.- 6nr Code 4 Compliant houses
£820,330
Meadowgate Rd £415,740 / Meadowgate Rd.- 4nr new Code 4 Standard houses
£480,326
Gainsborough £3,359,415 / Gainsborough St. - The external improvement of 330nr terraced properties in 10nr blocks.
£3,039,708
Wellington St £1,369,826 / Wellington St.- The external improvement of 132nr terraced properties in 10nr blocks
£1,470,524
Major New Build Framework (£5Million - £30Million)
Partner / Period / No. Projects Completed / Value of projects (Target Cost) / Value of projects (Estimated Final account)
Cruden / Q1 2011 / - / - / -
Seddon / Q1 2011 / - / - / -
Lang O’Rourke / Q1 2011 / - / - / -
4. 2 Projects completed Q2 2011 (1st April 2011 – 30th June 2011)
4.1 As above, this section shows the projects completedduringQ2 2011, again the
closedown meetings have yet to take place on these projects.Recent
completionsinclude the remainder of the Local Authority housing and the new
Wheatersfield school now known as the RiverviewSchool. The Q1 and Q2
periods noted here have together delivered a large number of completions with a
collective value of approximately £33,029,399
4.2 Broughton Community Hub and Agecroft Crematorium have also recently been
completed but as their completion dates fall in July they will be detailed in the Q3
period, and subject to future reporting to this committee.
New Build Framework (£125K - £500k)Partner / Period / No. Projects Completed / Value of projects (Target Cost) / Value of projects (Estimated Final account)
Seddon / Q2 2011 / - / - / -
Warden Construction / Q2 2011 / - / - / -
Major New Build Framework (£500,000 - £5Million)
Partner / Period / No. Projects Completed / Value of projects (Target Cost) / Value of projects (Estimated Final account)
Cruden / Q2 2011 / 2 / HolyFamilyPrimary School
£4,150,000 / £5,050,000
Demolition of existing school & construction of a new 1,619sq.m. one form entry primary school plus new synthetic sports pitch.
Avon Close £1,761,960 / £918.860
Avon Close – 15nr new Code 4 Standard dwellings
Seddon / Q2 2011 / - / - / -
Major New Build Framework (£5Million - £30Million)
Partner / Period / No. Projects Completed / Value of projects (Target Cost) / Value of projects (Estimated Final account)
Cruden / Q2 2011 / - / - / -
Seddon / Q2 2011 / - / - / -
Lang O’Rourke / Q2 2011 / 1 / Riverview School
£13,322,967 / £11,400,000
New two form entry CommunityPrimary Schoolwith a capacity for 480nr pupilsand a children’s centre. Floor area of 3,300sq.m. on two storeys.
5.0 Projects completed since May 2010
5.1 In this section information has been provided to show the projects completed for
individual partners for the last five quarters within each of the Frameworks. The
closedown meetings will have occurred on a number of these projects. Contract
Values are either final account or forecast final account figures.
Projects completed in the period 31st March 2010 to 30th June 2011Project / Partner / Contract Value / Start / Completion
Liverpool Shops / Seddon / £124,365 / 12.01.2010 / 10.05.2010
FitCity Broughton / Cruden / £946,523 / 30.11.2009 / 17.05.2010
Lower Kersal Sec. School / Cruden / £1,527,973 / 05.08.2009 / 18.05.2010
Liverpool Road Corridor / Seddon / £151,285 / 18.01.2010 / 02.07.2010
Carnegie Library Phase 4 / Seddon / £1,413,249 / 10.08.2009 / 17.05.2010
WestwoodParkPrimary School. extension / Cruden / £332,050 / 06.04.2010 / 19.07.2010
Innovation House / Warden / £236,489 / 14.06.2010 / 27.08.2010
AlbionHigh School / Warden / £172,576 / 12.07.2010 / 03.09.2010
SwintonTown Hall / Warden / £353,601 / 28.06.2010 / 17.09.2010
LarkHillPrimary School conversion / Cruden / £315,330 / 26.07.2010 / 01.10.2010
Agecroft Crematorium Phase 1 / Seddon / £250,000 / 02.08.2010 / 14.10.2010
Eccles Town Hall DDA works / Warden / £268,473 / 07.06.2010 / 27.10.2010
HolyFamilyPrimary School / Cruden / £5,050,000 / 10.08.2009 / 01.04.2011
Light Oaks
P. School / Cruden / £1,190,729 / 26.07.2010 / 11.03.2011
Wellington Street / Seddon / £1,355,141 / 01.06.2010 / 01.03.2011
Gainsborough & Douglas Street / Seddon / £3,134,880 / 09.11.2009 / 18.03.2011
LA New build
Greenheys Road / Cruden / £1,578,093 / 26.04.2010 / 21.03.2011
LA New build
Newcombe Drive / Cruden / £918,860 / 17.05.2010 / 28.02.2011
LA New build
Avon Close / Cruden / £1,941,978 / 17.05.2010 / 19.04.11
LA New build
Manchester Road / Cruden / £693,022 / 20.09.2010 / 31.03.2011
LA New build
Bridson Street / Seddon / £2,165,300 / 10.05.2010 / 21.03.2011
LA New build
Cemetery Road / Seddon / £524,190 / 10.05.2010 / 28.01.2011
LA New build
The Withies / Seddon / £1,174,100 / 05.07.2010 / 28.03.2011
LA New build
Meadowgate Rd. / Seddon / £415,740 / 02.08.2010 / 14.03.2011
LA New build
Duchy Road / Seddon / £738,150 / 26.07.2010 / 28.03.2011
Barton Moss S.U.
Enabling Works
Phase 3 / Seddon / £147,072 / 04.01.2011 / 09.03.2011
Barton Moss S.U.
Advanced Works / Seddon / £610,458 / 28.01.2010 / 09.03.2011
WheatersfieldPrimary School
(Now Known as RiverviewSchool) / Laing O’Rourke / £13,322,967 / 04.01.2010 / 21.06.2011
6.0Projects in Pipeline and allocated
6.1 This section provides information on projects in the pipeline and where possible
the allocated partner.
Projects in Pipeline & AllocatedProject / Description / Partner / Contract Value / Projected Start
Primary School Capital Programme - EcclesPrimary School / New construction / Seddon / £6.0m / On hold.
Salford Museum & Art Gallery / Refurbishment & remodelling of the listed building. / TBA / £13m approx / Start 2012
Lark Hill CP School / 8 Class base extension to the existing school / Cruden / £450,000 / Start TBA
SouthTower, MediaCity / 50,000sq.ft office fit out over 6 floors / TBA / £1.9m / Start TBA
CadisheadPrimary School / Re-roofing project / Wardens / £155,000 / Start August 2011
The Hub – Higher Broughton / A 3,750 sq.m. community centre providing a trampolining hall, changing rooms, library, community space and Sure Start facilities. / Laing O’Rourke / £9,500,000 / Finish 18.07.2011
Agecroft Crematorium
Phase 2 / Extending and re-equipping the existing facility. / Seddons / £250,000 / Finish 22.07.2011
Local Authority New build
Bracken Avenue / Bracken Ave – 16nr new Code 4 Standard dwellings / Cruden / £2,129,199 / Finish
31.08.2011
7.0 Health and Safety
7.1Health and Safety is a high priority on all the Council’s contracts and a formal
Health and Safety and Environmental report is submitted to the Council Client on
a monthly basis. As of June 2011 this report will be submitted quarterly to the
Client, the decision being taken on the basis that the process for producing such
reports is very demanding on resources, and given the high level of success in
reducing incidents it was felt that to monitor such issues quarterly basis is both
timely and in line with delivery of process efficiencies; whilst maintaining the
Council’s statutory responsibilities for health and safety in its construction
projects.Again for these frameworks the Council has been able to evidence a
high standard of Health and Safety on its projects which has drawn favourable
comments from the Health and Safety Executive Inspectors.
7.2 The sharing of Health and Safety information takes place by the regular issue of
Health and Safety Alerts to all parties involved. The forums of the Project
Meetings, the Framework Meetings and the Principals Meetings also act as a key
communication tool for circulating all relevant Health and Safety information.
7.3 Recent Framework Management Group meetings have reviewed the necessity of
providing projects with realistic space for site compound, site set up and welfare
facilities, thereby improving site safety. Allied to this it has been noted that the
Health & Safety Executive are currently focussing on lead-in times for projects
particularly with regard to how early planning enhances the site safety of
construction projects.
8.0 Sustainability
8.1Sustainability and recycling have been a key issue for partnering. National sustainability initiatives continue to drive partner contractors to greater efficiencies by reducing site waste and encouraging the recycling of waste,
8.2Whites recycling plant claim to recycle 100% of construction waste received with
the small amount that cannot be recycled is converted into fuel pellets. However
there are waste materials such as insulation, plasterboard, kitchen waste and
light plastics for which there are currently no commercially viable recycling
facilities.
Proposals that reduce the volume of such waste are being explored by
the partners as part of their continuing efforts to enhance the sustainability of
all construction operations.
8.3Parallel initiatives include the monitoring of the carbon footprint of each
construction site with the objective of achieving effective waste minimisation for
the following categories: -
- Fuel – Measure and reduce direct fuel usage on site for static and mobile plant including commercial vehicle movements.
- Electricity – Measure & reduce the KWh power usage on site for equipment and temporary accommodation
- Water – Meter & reduce consumption by use of weekly targets
- Waste – Provide on site space for the separation of waste. Record the percentage of waste taken of site that is recycled
- Bio diversity – Use of materials only from sustainable / renewable sources.
8.4Architects and designers are aware that recycling outcomes and the reduction of
Salford City Councils carbon footprint are significantly influenced by their
decisions. A holistic approach to sustainable designand appropriate material
specification are key early considerations thatare implemented with the objective
of improving carbon savings..