Purpose

The purpose of this report is
to seek approval via delegated decision to award the contract for
the appointment of 2 contractors to deliver on the Fire Safety
Remedial works across Croydon Council homes and assets.
 

Content

For the reasons set out in the
report, the Corporate Director of Housing AGREED
to:
 
Award two contracts for the
provision of Fire Safety Remedial Works Contract to bidder (A) and
bidder B, named in the part B report for a five (5) years contract
with a 6 months break clause notice at three (3) years and four (4)
years for the overall contract value stated in Part B of this
report.
 
Note the two contracts are
based on two lots -  ‘North’
and ‘South’ geographical locations split 50/50. Bidder
A, as the top scoring Bidder will be offered the choice of which
lot they would like to be allocated to (North or South), while
Bidder B as the second placed bidder will be allocated the
remaining lot.
 
Note that the names of the
successful bidders will be released after the award
decision.
 

Reasons for the decision

Since 2018, there has been a
shift in focus towards Fire Safety works in accordance with the
Regulatory Reform (Fire Safety) Order (RRO) and the challenges
associated with procuring specialist contractors in this field.
This shift is prompted by the urgent need to address fire and
building safety concerns and ensure compliance with regulations,
particularly in the wake of the Grenfell Tower tragedy and
heightened scrutiny on fire safety standards.
 
The Fire Safety team within the
Council’s Housing Service has identified a volume of remedial
works captured during Fire Risk Assessments which require
completion. The use of 2 competent contractors will ensure
allocation of this workstream, with priority to high-risk
properties at the commencement of contract delivery. This strategy
was aligned with benchmarked information gathered from expert
experience using similar organisation level of spend, to ensure
paced delivery and standardisation using detailed
specifications.
 
The scope of work under the
award is required as an essential spending requirement for LBC to
meet its statutory and policy objectives – not awarding or
delaying would impact each.
 
The procurement exercise has
followed the appropriate procurement processes with close working
with both the Council’s procurement team, their technical
advisor and legal services to ensure compliance with both the
Public Contracts Regulation 2015 (PCR) and the Council’s
Contract Standing Orders (CSOs).
 
The Cabinet Member for Homes
approved the recommended procurement strategy for delivery of
tender exercise to appoint contractors for the Fire Safety Remedial
Works Contract ref: PB-2425-000042-S.
 

Alternative options considered

Aligned with the
Council’s Commissioning Framework and considering the
decision between making or buying services, we have evaluated the
following options:
 
Do Nothing:
 
Taking no action on the
required fire safety works is not a viable option for the Council.
Neglecting these essential measures would lead to non-compliance
with fire safety regulations, exposing residents to significant
risks and potentially severe legal repercussions. The Council
possesses crucial information and data on its housing stock, which
forms the basis of its Housing Strategy. Prioritizing
customer-centric services, including improvements to housing stock,
is imperative for ensuring residents' safety and well-being.
Therefore, failing to address fire safety concerns would not only
compromise compliance but also undermine the Council's commitment
to providing safe and habitable living conditions for its
residents.6.2 In-House Delivery unfortunately would not be
feasible:
 
The council does not possess
the necessary capability, expertise, and staffing resources to
undertake the specified work internally. Establishing or recruiting
a full complement of specialist staff for in-house delivery would
incur greater costs than outsourcing the requirement.
 
Selecting a Term
Contractor:
 
Although the Council currently
has three potential term contractors available, appointing any of
them is impractical due to capacity constraints. The resources
within these term contractors may struggle to meet the project
requirements within the specified timelines and, importantly, may
not be cost-effective.
 
Open Tender Route:
 
Open tender process will
provide opportunity to engage directly with Tier 2 contractors who
have hands on knowledge and experience of the required works, this
is a regulated area of works and can only be delivered by certified
contractors, this will limit the volume of interest in the market.
Having engaged the market and benchmarked with other local
authorities, it is clear that there is
adequate interest to tap into, however the time required to deliver
the end-to-end process will limit the Council’s ability to
deliver on already identified urgent matters.  The impact of inflation in the current market may
negatively impact the budget due to internal and external economic
factors. This approach is therefore not considered a favourable
route to procurement.
 
Mini Competition via a
Framework:
 
Intensive engagement with
various framework providers such as Fusion 21 Framework/LCP
Framework/NHS Shared Business Services, indicated availability of
pre-qualified contractors, the Section 20 notices would need to be
factored into the mini competition process to ensure compliance.
There is a risk that consultation responses from S20 could
invalidate the mini competition process, this is because S20
consultation response may require the Council to seek estimates
from nominated contractors who may not be part of the established
framework.  Detailed analysis of various
frameworks offered highlighted that call-off agreements from
suitable frameworks has a number of
pre-qualified housing works -related contractors, and the framework
setup is compliant with regulations. In addition, the frameworks
tend to have larger Tier 1 contractors, which typically
sub-contract works to tier 2 contractors. This is likely to result
in higher costs than contracting directly with tier 2 contractors.
Due to the disadvantages of S20 consultation and contractors list
this is not the preferred option.
 
Mini Competition via a
DPS.
DPS works in a very similar way
to a framework other than the fact that additional suppliers can be
added to a DPS over the duration of the DPS. There are again
various DPS providers – although not as numerous as
frameworks. A new Section 20 notice process would need to be
completed; however, this is a compliant way of consultation as any
nominated suppliers as part of the consultation can be directed to
the DPS to seek to be added to the DPS, allowing them to bid as
part of the mini-competition process if they meet the DPS
requirements. 
 
The preferred DPS identified is
the LCP DPS. This DPS is considered simple and a suitable delivery
route that offers economies of scale across the delivery of the
programme of works. Nominated supplier/s will be onboarded to the
system upon meeting all regulatory compliance, which most suppliers
should easily attain as a functioning entity. The DPS has a good
blend of both Tier 1 and Tier 2 suppliers by ensuring a suitable
range of contractors are available, while S20 compliance is
supported.  The DPS system requires a
call off process which involves a mini competition, offers
competitive pricing and in addition the NHF SOR will be used for
standard items. The Council has built a good working relationship
with the DPS management.
 
Tenders received have provided
good quality of submission in terms of delivery experience and
value for money.
 
There are applicable charges
for use of the LCP DPS set at 0.5% charges on the overall invoiced
value following an award of contract; with the rate negotiable as
the spend value increases. The LCP DPS charge is considered to
offer more value for money than other available Framework
charge. 
 
The
LCP DPS was considered a more favourable option; and is therefore
the Council’s preferred option.