APPROVAL FOR EXCEPTION TO COMPETITIVE TENDERING UNDER STANDING ORDER 24. RELATING TO CONTRACTS AND TENDERS

Service UnitSequential number

Children and Young People's Services - Strategy, 270 Quality and Improvement

Project TitleProject Manager

Old Town First School and Nursery Extension and Nicola Keynes - CYPS SQI

Children's Centre Project Graham Burt - Mouchel Parkman

Background Information

See Appendix A attached. – 5 Contracts totalling £432,150 requiring exception to tender

Budget

On 7th November 2006 Children’s Services Overview Group recommended that the Leader of the Council be asked to approve a revised budget of £2,697,696.

On 26th June 2007 Children's Services Overview Group recommended to Cabinet and Council that a revised budget of £3,574,902 be approved. Cabinet will consider this recommendation at its meeting on 17th July and Council on 24th July.

Date Approved 7.11.06

Proposal for Approval

Amount

£2,697,696

Spent to Date

£333,983

This exception is sought to continue appointments of Design Team consultants already made further to approval sequential number 139:

Architect

Services Engineer

Brewer, Smith and Brewer WSP

This exception is also sought to approve the appointment of additional members of the Design Team as follows:

CDM Co-ordinator Project Manager Quantity Surveyor Structural Engineer

Nisbet Safety Systems Ltd

Mouchel Parkman/Hornagold and Hills Nisbet LLP

AKS Ward

Reason(s) for not tendering

The project has, since 2005, been subject to unforeseen delays due to design changes and the failure to agree a guaranteed maximum price with the selected contractor under a 2 Stage tender process. The project is now under changed project management processes and there is an urgent need to confirm appointments made to progress the project. The named consultants have either been previously appointed to work on the original project or are currently working or have been associated with the Borough on other projects. Construction work has started on the school site and there is an urgent need to confirm these appointments so that contracts can be completed with the consultants team. Further details are attached. All contracts will be completed with the advice and assistance of Legal Services.

Any further delays in the commencement of the project because of the extra time needed to go through the normal competitive tendering process would have the following risks/consequences:

  • the provision of a Children's Centre on the site could be jeopardised with the possibility of the loss of considerable Government grant of £588,000
  • the school is growing by one form of entry each year from September 2006 and for September 2007 it has been necessary to provide temporary accommodation at an additional cost of £50,000 to the LA. It is therefore essential that the project is completed in time for the September 2008 intake to avoid the need for further temporary accommodation as this would not fit on the site and would lead to further additional cost
  • the parents of pupils at Old Town First School are becoming increasingly annoyed and frustrated with the disruption that the delays have caused the school and there has been some negative publicity in the Press generated by complaints from parents. Further delays could result in an escalation of these complaints.

Furthermore, there is a risk that a competitive tendering process could result in the appointment of an architect or specialist consultant who have had no previous involvement in the project which could result in further delays as any newly appointed consultant would need time to familiarise themselves with the background to and detail of the project.

and exception sought (see Standing Orders for full text)

Approval is sought to waive the requirement for competitive tendering under Standing Order 23 by applying the following exception referred to in Standing Order 24 summarised as follows:

x

o o o o o

x

o o

a) Negotiated tender with existing contractor.

In addition to initial approval by Head of Service Unit and Head of Financial Services approval by the Portfolio Holder or Cabinet is required. Please return this form to Legal Democratic Services to obtain approval by the Portfolio Holder or Cabinet.

b) Supply of goods/materials/services if:

(i) sold only at fixed price;

(ii) prices controlled by trade organisations or government order;

(iii) limited number of contractors but reasonable number of these invited to submit tenders; (iv) set up by other organisations (contracting procedures equivalent to Borough of Poole).

Requires approval from Head of Service Unit and Head of Financial Services. c) Unforeseeable and required urgently.

Requires approval of Portfolio Holder or Cabinet after approval is sought from Head of Service Unit and Head of Financial Services. Please return this form to Legal Democratic Services to obtain approval by the Portfolio Holder or Cabinet.

d) Repairs, supply of parts or updates for existing machinery, computers etc. Requires approval from Head of Service Unit and Head of Financial Services. e) Original estimate less than £25,000 (quotation procedure followed). Requires approval from Head of Service Unit and Head of Financial Services.

Approval

Head of Service Unit

Head of Financial Services

Portfolio Holder (only under 24a and 24c)

Date

Date

Date

25/7/07

26/7/07

REASONS FOR NOT TENDERING

  1. As a result of increases to the estimated costs of the project, in November 2006 Children's Services Overview Group recommended that the Leader of the Council be asked to approve additional funding of £146,175 from within the Education Capital Programme budget as a portfolio holder decision in order that a guaranteed maximum price for the contract could be agreed with the Contractor. This brought the revised school extension budget to £2,137,696 and the total overall budget, including the Children's Centre project cost estimate of £560,000, to £2,697,696.
  1. In January 2007 Legal Services reported to the Strategic Director (Children's Services) that construction works had not started on site because a contract had not been agreed with the Contractor. This was largely because of a difference of agreement between the Contractor and Property Services with regard to the risks and costs covered by the guaranteed maximum price. However, there was also disagreement with regard to additional sums claimed by the Contractor in respect of outstanding accounts for works carried out in the summer of 2005 and 2006, costs incurred for negotiation of the prices for the first and second scheme designs and legal costs.
  1. In March 2007 the Strategic Director (Children's Services) held a meeting with the Contractor, together with officers from Property Services and Legal Services, from which he felt that the Contractor was still committed to the project and was seeking to reach agreement with the Council on the terms of the contract and on the guaranteed maximum price. Therefore, he agreed to continue discussions with the Contractor with a view to reaching an agreement so that the project could move forward.
  1. The Strategic Director (Children's Services) took the decision at the beginning of April to appoint Mouchel Parkman/Hornagold and Hills, external consultants, to replace Property Services as project managers and cost consultants for the project. He took this decision because of failures in the project management service provided by Property Services. The circumstances have been the subject of an internal audit report.
  1. The new project manager reviewed the project and recommended to the Project Board in May that a "traditional" procurement route be adopted in place of the previous strategy of 2 stage "design and build" form of procurement.
  1. The project manager advised that the advantages of this change were that the Design Team, whose contracts with the Council would under a design and build contract have been novated to the Contractor, would now continue to be contracted to the Client (Borough of Pool e) and be able to ensure that the Client, DfES and User requirements were satisfied in a controlled way. In addition, the quality and durability of the scheme was likely to be enhanced, the Client would not lose the independent advice of the original Design Team and would not have to appoint alternative consultants to provide technical advice. Under design and build the Contractor takes over the responsibility and liability for design.

PROPOSAL TO EXTEND THE APPOINTMENT OF CONSULTANTS APPOINTED FOLLOWING A TENDER PROCESS - 24 A) AND C)

  1. On 8th April 2005 Councillor Woodcock, Portfolio Holder for Education, approved an exception to competitive tendering under Standing Order 24 c) to appoint the design team (architect, structural engineer and mechanical and electrical engineers) by obtaining four quotations for each discipline, rather than undertaking a full tender exercise as required by Standing Orders. A copy of this approval sequential number 139 is attached.

The following consultants were appointed through this process:

Brewer, Smith and Brewer - Architects

  1. Brewer, Smith and Brewer were appointed as architects to the project in April 2005.

Their appointment was up to RIBA Stage D with the intention that they would be novated to the contractor for stages E to L.

  1. Following the decision to adopt a traditional procurement route in place of the previous strategy of "design and build" it is now proposed that BSB should be employed by the

Borough of Poole for all stages of the project and that their appointment should be extended to cover the role of Design Team leader and contract administrator.

10. / BSB have submitted a fee proposal as follows:
Earlier schemes to Stages DIE / 53,455
Planning for temporary building / 500
Current main project Stages D to L / 54,000
Sub-total / 107,955
Adjustment for contract sum £2.4m / 10,800
Sub-total / 118,755
Landscape architect / 1,240
Contingency - extra 2 days works / 825
Total / 120,820

It is proposed that the RIBA standard form of appointment should be used.

WSP - Services Engineers

  1. WSP were appointed as mechanical and electrical engineers to the project in April 2005. The terms of their appointment are unclear because the appointment was handled by WT Hills and all records are currently held by them.
  1. Following the decision to adopt a traditional procurement route, it is now proposed that WSP should be employed by the Borough of Poole for all stages of the project.

13. WSP have submitted a fee proposal as follows:

Earlier schemes to Stages DIE Current main project stages D to L

Sub-total

Adjustment for contract sum £2.4m

Total

30,697 38,420

69,117

3,842

72,959

It is proposed that the ACE - performance duties - standard form of appointment should be used.

Nisbet Proiect Safety Ltd - CDM Co-ordinator

  1. Nisbet Project Safety Ltd were appointed by Property Services when they took over the project management from WT Hills in January 2006. Previously WT Hills had taken the role of Planning Supervisor. Details of their appointment are held by Property Services the writer is unclear whether competitive quotations were sought.

15. Nisbet have submitted a fee proposal as follows:

Earlier schemes to Stages DIE Current main project Stages D to L

Sub-total

Contingency

Total

2,925 1,914

4,839

484

5,323

PROPOSAL TO APPOINT CONSULTANTS WITHOUT FOLLOWING A TENDER PROCESS - 24 C)

Mouchel Parkman - Proiect Mana!:lement

  1. In January 2007 a decision was taken by Jane Portman, SUH of School Advice and Support Services, with support from Management Team, that for a period of at least one year and until the future structure and organisation of Property Services has been decided, no further capital projects should be passed to Property Services by SASS.

It was decided that project management services should be procured through the Transportation Services partnership with Mouchel Parkman or through the direct appointment of external consultants.

  1. When the Strategic Director (Children's Services) took the decision at the beginning of April to replace Property Services as project managers and quantity surveyors for the project, it was necessary to appoint alternatives immediately. Mouchel Parkman were asked if they could provide these services with immediate effect and they were able to confirm that they could through their project management consultancy trading as Hornagold and Hills. The new project manager, Graham Burt, attended the project review meeting held at Upton House on 17th April 2007.
  1. Since Mr Burt's appointment the project has moved forward at great speed and with a renewed sense of partnership and confidence. Regular and full reports are made to the Core Group and Project Board and there is clarity about the financial position and timetable for the project. The Design Team are co-ordinated effectively to draw on the expertise and strengths of each of the disciplines represented.

19. Mouchel Parkman/Hornagold and Hills have submitted a fee proposal as follows:

Pre-contract to August 2007 - time charges Post-contract -lump sum

Sub-total

Contingency for post-contract

Total

55,663 67,894

123,557 20,000

143,557

It is proposed that the RICS standard form of appointment should be used.

  1. The rates quoted by Mouchel Parkman are as per those set out in the OGC Organisational Consultancy - Organisational Development - Education and Children's Services Framework.

Nisbet LLP - Quantity Surveyor

  1. When Mouchel Parkman were asked to take over the project management in April 2007 they were also asked to provide cost consultancy services. However, although Mouchel Parkman were able to find a suitable project manager, they did not have a quantity surveyor available. Therefore, they proposed that Nisbet LLP, a company with whom they had worked previously on a number of projects and who they considered provided a high quality service, should be appointed. In addition, Nisbet LLP have an office in Poole town centre and have worked for the Borough of Poole many times, including the Hamworthy Schools project. Nisbet LLP confirmed that they had the capacity to provide this service and were able to start work on the project at the end of April.
  1. Since their appointment, Nisbet LLP have produced a detailed cost plan for the project, based on the costings obtained by Raymond Brown Construction through the "best value" exercise and from their professional knowledge of benchmarked costings for similar schemes. There is now a professional quantity surveyor working on the project who has the confidence of the Design Team and the client. Decisions and recommendations can be made by the Core Group and Project Board based on detailed reports and professional advice.

23. Nisbet LLP have submitted a fee proposal as follows:

Pre-contract to August 2007 - time charges

18,000

Post-contract - lump sum

Sub-total

Contingency for pre/post-contract

Total

24,000 42,000

6,000

48,000

It is proposed that the RICS standard form of appointment should be used.

  1. The rates quoted by Nisbet LLP are the same as the rates set out in the Dorset County Council "Modernising Schools Project" Framework.

AKS Ward - Structural Engineer

  1. When the Design Team was set up for the original scheme in April 2005, Graham Garner and Partners (GGP) were appointed as structural engineers following the four quotations exercise described above. Raymond Brown Construction indicated that they did not intend to novate the services of GGP and wished to appoint the consultants of their choice, AKS Ward, as structural engineers following novation of the design. In fact the design was never novated and AKS Ward were employed by RBC to undertake design work in preparation for the project getting underway.
  1. AKS Ward are a local company based in Poole who have worked for the Council on many occasions.
  1. The design of the steel structure for the school extension is needed to reach agreement on a contract sum with Raymond Brown Construction and orders were issued by the Council to AKS Ward in May 2007 to instruct them to start working with the architects on this design work. It is now proposed that AKS Ward should be employed by the Borough of Poole for all stages of the project.

28. AKS Ward have submitted a fee proposal as follows:

Earlier schemes to Stage C Current Main Project Stages D to L

Sub-total

Adjustment for Contract Sum £2.4m

Total

14,500 26,928

41,428

5,386

46,814

It is proposed that the ACE standard form of appointment should be used.

  1. Graham Burt of Mouchel Parkman and Chris Timlin of Nisbet LLP have advised that the rates quoted by AKS Ward, when benchmarked against rates charged by similar structural engineering practices, represent value for money.

APPENDIX A

BACKGROUND

A.1 This project is to enlarge the accommodation of the School to accommodate an

increase in the Published Admission Number (PAN) from 30 to 60 to provide additional school places for children expected to come forward as a result of the housing developments in the Town Centre. The increased PAN will take effect on 1stSeptember 2006 and the enlarged school will have a capacity of 240 pupils. School Organisation Committee approved these proposals on 25th July 2005.

A.2 A budget for this project of £1 ,891 ,521 was approved by Cabinet in April 2005 as part

of the Education Capital Programme 2005-06. This budget was based on the quantity surveyor's costings of the initial project design developed through a feasibility study.

A.3 A design team comprising an architect, quantity surveyor and other consultants was

appointed and work on the detailed design of the scheme got underway. The Headteacher, governors and staff of the school were fully consulted in the design process and an agreed design was achieved in early May 2005. The cost profile of the project, compiled by the design team, was shown to be achievable within budget at this time.

A.4 As the anticipated date of completion of the project was August 2006, the Project

Manager recommended that a design and build procurement process would be appropriate. This embraces the "Achieving Excellence in Construction" agenda in that it brings early contractor involvement and so brings the contractor's input and expertise to the design process.

A.5 In May 2005 following a tender process, Raymond Brown Construction (RBC) were

identified as the preferred contractor on the basis that they submitted the lowest preliminary costs and profit, whilst presenting the greatest understanding of the project requirements. A letter of intent was issued to RBC following this process.