Purpose

To approve the procurement strategy for
construction works for the housing development projects comprising
Tranche 1 of Hackney’s New Homes Programme:

Content

RESOLVED:
 
1. 
To approve the procurement strategy for construction
works for the housing development projects comprising Tranche 1 of
Hackney’s New Homes Programme:
 
a. 
Broadway (Orwell and Welshpool), and Regents Court
(NHP1)
 
Procurement of a
single contractor by means of single stage tender for the joint
Design and Build delivery of two nearby construction projects at
Orwell Court garages / Welshpool Street depot (known as Broadway)
in Haggerston and London Fields wards, and at Regents Court garages
in Haggerston ward.
 
The procurement
shall be a competitive call-off from a compliant framework or
Dynamic Purchasing System (DPS) which may include the Notting Hill
Genesis Framework - Development Contractors Lot.
 
b. 
Cropley Court and Buckland Court (NHP2)
 
Procurement of a
single contractor by means of single stage tender for the joint
Design and Build delivery of two nearby construction projects at
Cropley Court garages and Buckland Court garages in Hoxton West
ward.
 
The procurement
shall be a competitive call-off from a compliant framework or DPS
which may include the Notting Hill Genesis Framework - Development
Contractors Lot.
 
c. 
Fellows Court and Weymouth Court (NHP3)
 
Procurement of one
or two contractors by means of single stage tender for the Design
and Build delivery of two nearby projects at Fellows Court garages
and Weymouth Court garages in Haggerston ward. The procurement
shall be structured such that the two projects are separate Lots
whereby the best offer is selected for each, which may lead to the
selection of the same bidder for both.
 
The procurement
shall be a competitive call-off from a compliant framework or DPS
which may include the Westworks Dynamic Purchasing System
(DPS).
 
d. 
NHP5.1 Blackwell Close and NHP6 Morris Blitz
Court
 
Procurement of one
or two contractors by means of single stage tender for the Design
and Build delivery of two projects at Blackwell Close garages in
Kings Park ward, and Morris Blitz former neighbourhood office in
Stoke Newington ward. The procurement shall be structured such that
the two projects are separate Lots whereby the best offer is
selected for each, which may lead to the selection of the same
bidder for both.
 
The procurement
shall be an open market (Procurement Act 2023 compliant)
Competitive Flexible Procedure utilising a Conditions of
Participation (CoP) process followed by an Invitation to Tender. A
maximum of five bidders will be shortlisted through the CoP
process.
 
e. 
NHP5.2 Nye Bevan Estate
 
Procurement of a
contractor by means of single stage tender for the Design and Build
delivery of the development at Nye Bevan Estate garages in Kings
Park ward.
 
The procurement
shall be an open market (Procurement Act 2023 compliant)
Competitive Flexible Procedure utilising a Conditions of
Participation (CoP) process followed by an Invitation to Tender. A
maximum of five bidders will be shortlisted through the CoP
process. This opportunity will also be advertised through the GLA
Small Sites Small Builders portal, in order to fulfill a funding
requirement and to maximise opportunities for smaller organisations
to be prioritised, although all formal procurement will be in line
with the Procurement Act 2023.
 
2 
To delegate authority to the Group Director of Climate,
Homes and Economy, in consultation with the Group Director of
Finance and Corporate Resources and the Director of Legal,
Democratic and Electoral Services, to enter into main building
contracts and if appropriate any preceding or parallel demolition
or enabling works contracts with the preferred contractor for each
project.
 
Reasons For
Decision
 
This report provides to CPIC the business case
and considerations for the procurement of construction works for
the first tranche of Hackney’s New Homes Programme (NHP) -
this first tranche comprises nine housing development sites
containing around 305 new homes. The report describes the analysis
and market engagement undertaken to arrive at a strategy for
procurement and construction delivery of the projects, and sets out
recommendations accordingly. A further report is expected to be
brought to CPIC in due course for the second tranche of the
programme, comprising a further five projects.
 
The NHP was launched by Cabinet in December
2022 (CHE S142) with authority to proceed through the design and
engagement stages, and submit planning applications, initially for
fourteen brownfield ‘anchor’ locations on housing
estates across the borough. The programme has been set up to
deliver around 400 new homes on underused Housing Revenue Account
(HRA) land such as car parks, garages and redundant buildings. 75%
of the new homes are to be for social rent at Council rent
levels.
 
A budget of £10m was authorised by
Cabinet to procure the necessary design and consultancy services,
surveys and investigations; carry out comprehensive community and
stakeholder engagement including establishing Resident Steering
Groups (RSGs) where local appetite exists; engage with the required
statutory authorities including the Council’s Planning
Service; submit planning applications and prepare procurement
documents ready for the tendering of construction contracts. This
‘pre-development’ work is well progressed on the
Tranche 1 projects, and construction procurements are expected to
commence from summer 2025.
 
The following table provides a summary of the
new homes outputs currently expected to be delivered by the
projects covered in this report. It should be noted that, as with
all capital projects, these are subject to planning, detailed
design and financial viability.
 
See paragraph 5.4 of the report.
 
The NHP is being delivered against a set of
seven overarching objectives which are used to ensure decision
making and project delivery remain in line with the original
intent. These objectives and their constituent themes are
summarised in the table below.
 

 

Objectives

Themes

1

Meeting housing
need

· 
Prioritise the delivery of new Council homes for social rent
· 
Ensure the mix and type of homes we build is informed by an
understanding of housing need and demand in Hackney.
· 
Provide homes for outright sale to help pay for the social
homes.

2

Contributing to
Hackney’s sustainability objectives

· 
Deliver environmentally friendly new homes, contributing towards
the Council’s net zero obligations.
· 
Future-proof projects to meet strengthened sustainability
regulations and requirements.
· 
Protect and improve the biodiversity of locations.
· 
Avoid unnecessary demolition of existing homes.
 

3

Creating better
homes and neighbourhoods

· 
Deliver high quality homes that support attractive, functional,
safe and sustainable neighbourhoods.
· 
Build upon Hackney’s reputation for high quality architecture
and characterful buildings, making places where people want to
live.
· 
Create inclusive places for all ages, identities and abilities.
· 
Improve surrounding areas of estates and public spaces, including
greenery and children’s play.
 

4

Involving residents
meaningfully

· 
Implement Housing Services’ Resident Engagement Strategy.
· 
Adopt the Residents Charter and ‘Keeping Communities
Together’ policies.
· 
Involve residents meaningfully through our collaborative approach,
ensuring communities can have their say at every stage of the
process.
· 
Work in partnership with local organisations, TMO, TRAs, schools
and public services to maximise the benefits of new
developments.
 

5

Making best use of
Council resources

· 
Make the best use of underused Council-owned land and
buildings.
· 
Continue our Council-led, not-for-profit approach to housing
delivery, harnessing our experienced in-house teams, with external
support.
· 
Work with the GLA and others to maximise the funding for new
Council homes, to complement the Council’s own resources.
· 
Increase the pace and efficiency of our delivery by implementing
lessons learned from past programmes and other developers.
 

6

Securing value for
money in the short and long term

· 
Ensure viable and deliverable projects that maximise benefits and
safeguard the Council’s financial stability.
· 
Balance upfront capital costs with long-term environmental goals,
cost-in-use and whole-life costs.
· 
Work closely with Housing Services and other teams to ensure new
homes have a cost-effective lifecycle.
· 
Build robust and well-loved homes that will age well and stand the
test of time.
· 
 

7

Supporting an
inclusive economy

· 
Provide new community uses and high street spaces where appropriate
to strengthen local services and economies.
· 
Promote diversity and inclusion in procurement and ensure projects
support green and inclusive growth.
· 
Expand apprenticeship and training placements, both with building
contractors and professional teams

 
A holistic overall strategy has been prepared
for the delivery and procurement of development / construction
works for the NHP, focusing to date on the Tranche 1 schemes for
which detailed arrangements are set out in this report. Work on the
strategy began at a workshop session on 20 May 2024 attended by the
Council’s Procurement Service, project teams, the Programme
Finance Manager, the programme’s two Cost Consultant
practices, and Regeneration Strategic Design colleagues. Two
further workshops (5 August 2024 and 29 October 2024) were held to
develop and finesse the strategy. Further, 8 monthly (latterly
fortnightly) meetings between the Procurement Service and Housing
Regeneration Heads of Service have taken place since September
2024
 
Alternative Options
Considered and Rejected
 
The range of options considered, and their
appraisal, are set out comprehensively on a package by package
basis in sections 5.25 onwards (within the report), and are
therefore not repeated here.
 
Insourcing
This Business Case encompasses nine
construction contracts, for the delivery of new build housing
development of the highest standards of quality and sustainability,
and on complex brownfield sites. The capacity and expertise for
this work does not exist within the Council whereas there is a
large, mature and competitive sector for these works and services
in the market. For these reasons insourcing is not an appropriate
option for further consideration.