Agenda item

To consider the attached report (CHB-005-2019/20).

(1)             That, TSG Building Services PLC be awarded the contract to undertake the construction of 5 properties, Chequers Road and Bushfields, Loughton in the sum of £1,365,481 together with the proposed construction period of 48 weeks.

(2)             That, TSG Building Services PLC be awarded the contract to undertake the construction of 3 properties, Chester Road, Loughton in the sum of £747,395 together with the proposed construction period of 34 weeks.

(3)             That TSG Building service PLC therefore recommend acceptance of the tender submitted by TSG Building Services PLC be awarded the contract to undertake the construction of 6 properties, Queensway, Ongar & Millfield, Higher Ongar in the sum of £1,372,925.

Deborah Fenton, Service Manager, Housing Management and Home Ownership presented a report to the Cabinet Committee advising that the report sought approval for the recommendations for Phase 4 as stated in the report.

The Council’s house building programme was due to enter phase 4 of 6, to undertake the next phase of the council house building programme, it was necessary to undertake a tender exercise taking cost and quality into account to satisfy the Council’s Procurement Rules.

Package 1, Phase 4 – Chequers Road (Site A) and Bushfields, Loughton

As Part of the Epping Forest District Council’s Housebuilding Programme, Airey Miller Limited undertook a competitive tender process. The Tenders were received on the 27 September 2019 and opened on the 10 October 2019. Four companies were invited to tender with three accepting and one declining. All tenderers submitted a list of clarifications with the tender returns.

TSG Building Services PLC were the most competitive tenderer, based on cost and their clarifications were reviewed in detail. The clarifications have been deemed as low to medium risk.

Package 2, Phase 4 – Chester Road, Loughton

As Part of the Epping Forest District Council’s Housebuilding Programme, Airey Miller Limited undertook a competitive tender process. The Tenders were received on the 27 September 2019 and opened on the 10 October 2019. Four companies were invited to tender with three accepting and one declining. All tenderers submitted a list of clarifications with the tender returns.

TSG Building Services PLC were the most competitive tenderer, based on cost and their clarifications were reviewed in detail. The clarifications have been deemed as low to medium risk.

Package 3, Phase 4 – Queensway, Ongar and Millfield, High Ongar

As Part of the Epping Forest District Council’s Housebuilding Programme, Airey Miller Limited undertook a competitive tender process. The Tenders were received on the 4 October 2019 and opened on the 10 October 2019. Four companies were invited to tender with three accepting and one declining. All tenderers submitted a list of clarifications with the tender returns.

TSG Building Services PLC were the most competitive tenderer, based on cost and their clarifications were reviewed in detail. The clarifications have been deemed as low to medium risk.

Councillor A Patel asked if penalties had been put in place for late completion.

Mr J Cosgrave, Interim Housing Development Manager advised that there were liquidated damages which were limited to any anticipated housing income rental that would be lost if any of the units were delayed.

Councillor A Patel asked in terms of the build specification were the Council asking for an NHBC level specification, as noted in the report, the building control requirement was not tied in with the Council’s in-house building control.

The Interim Housing Development Manager stated that in terms of the build quality specification it was in accordance with the building regulations so whether it was the Local Authority or NHBC Standards they would be at the same level of building control standards.

Councillor A Patel stated that his understanding was to get an NHBC warranty on a property were greater than what would typically be through building control.

The Interim Housing Development Manager advised that the NHBC was a warranty insurance provider and both the Local Authority and NHBC administrate two aspects, one was in terms of the building control requirement, which was a statutory requirement and the second, which the NHBC have, were insurance warranty conditions, which were born out of their insurance experiences that are more robust than is covered under the building control requirement. Local Authority building control have a similar approach but use a separate warranty provider.

Councillor A Patel asked if the Council had tied in their in-house building control to be the approved building control for these developments.

The Interim Housing Development Manager advised that this process would be activated once the contracts had been signed. The inspection and warranty provision was a separate statutory function.

Councillor A Patel stated in terms of learning from the previous delays the Council have come across in Phases 1, 2 and 3, are you satisfied that the Contractor is liquid and that the issues which previously happened will not happen again.

The Interim Housing Development Manager advised that looking back through the historical events of the previous Phases 1-3 that lessons had been learnt. Phase 4 was a completely different process, there was a new employers agent and due diligence team of consulting engineers and advisers and the quality of the due diligence appeared to be much more robust. The Phase 4 contracts are more reliant upon a design and build responsibility being passed to the contractor even though a great deal of the work has been thought through and processed within the technical information provided.

Councillor A Patel asked in terms of the soil and the contamination surveys were they down to the contractor to provide or have the Council provided this information.

The Interim Housing Development Manager advised that as part of the process for Phase 4 the site investigations have been carried out by the Council’s Development Team of advisors who have produced technical site investigation recommendations that have been novated to the Contractor and who will then be responsible for the information provided and ensure that they are satisfied as well.

Decision:

(1)             That, TSG Building Services PLC be awarded the contract to undertake the construction of 5 properties, Chequers Road and Bushfields, Loughton in the sum of £1,365,481 together with the proposed construction period of 48 weeks.

(2)             That, TSG Building Services PLC be awarded the contract to undertake the construction of 3 properties, Chester Road, Loughton in the sum of £747,395 together with the proposed construction period of 34 weeks.

(3)             That TSG Building service PLC therefore recommend acceptance of the tender submitted by TSG Building Services PLC be awarded the contract to undertake the construction of 6 properties, Queensway, Ongar & Millfield, Higher Ongar in the sum of £1,372,925.

Reasons for the Decision:

The Council’s Procurement Rules requires a Cabinet decision when awarding contracts in excess of £1m. However, the Cabinet have delegated authority to the Council Housebuilding Cabinet Committee to agree all tenders associated with the Council’s house-building programme as set out in its Terms of Reference. Authorisation to enter into a Build Contract is required to enable a start on site to be made and for these properties to be delivered.

Other Options Considered and Rejected:

To award the contracts to any other contractor that has tendered for the works.