Issue - meetings

(Asset Management & Economic Development Portfolio Holder) To consider the attached report (C-019-2017/18).

(1)        That the final account for the construction of Oakwood Hill Depot in the sum of £2,590,043.64 be noted.

The Portfolio Holder for Asset Management & Economic Development presented an outturn report for the construction of the Oakwood Hill Depot in Loughton.

The Portfolio Holder reminded the Cabinet that, in order to achieve a vacant site to facilitate the construction of the Epping Forest Shopping Park, a number of the Council’s operational services had to be relocated from Langston Road. This was achieved primarily through the construction of a new Depot on Council owned land at Oakwood Hill. The new Depot was commissioned in August 2016. As the defects liability period had now elapsed, and in accordance with the Council’s financial Regulations, this outturn report advised Members that the final account for the construction of the Depot was in the sum of £2,590,043.64, which was in excess of the Tendered Sum, and any learning points for future capital projects.

With respect to lessons learned on the project, the Portfolio Holder stated that it was felt more consistency with respect to client requirements as a result of changing personnel, would have been beneficial. Similarly, whilst Stace PLC undertook the project management aspect, a client Clerk of Works on site might have been able to problem solve with the contractor more effectively, particularly with respect to a number of Health and Safety issues which, if unresolved, would have affected the safe operation of the depot once commissioned.

The Director of Neighbourhoods highlighted the major overspends associated with the project, which were listed in paragraph 12 of the report, of which the biggest was the additional £67,000 spent to provide an out-of-hours security presence. The contract to construct the Depot was let on a Design-and-Build basis, and there had been issues concerning ground protection and contamination. The changing of the Client Officers had been a far from ideal situation during the project, which would have been offset by the Council employing a client Clerk of Works on site. The Portfolio Holder added that the Council originally thought that it had sufficient expertise in-house when the project began.

The Cabinet accepted that lessons could always be learnt from undertaking projects of this size, and the Council had gained an excellent building for use in the years to come.

Decision:

(1)        That the final account for the construction of Oakwood Hill Depot in the sum of £2,590,043.64 be noted.

Reasons for Decision:

The Council’s Constitution required that reports were prepared and submitted to the Cabinet on completion of all contracts where the final expenditure exceeded the approved contract sum by more than the lesser of 10% or £25,000. The increased cost of the construction of the Depot was £204,867, which represented an increased cost of 8.5% over the original tender agreed by the Council.

Other Options Considered and Rejected:

As the final contract sum exceeded the original agreed Tender by more than £25,000 (£204,867) then there was no other option under the Council’s Constitution than to report the overspend to the Cabinet.