Purpose

The procurement of void works
for General Building Contract 3  

Content

RESOLVED:
 
1. To approve the
contract award of specialists
contractors for Void Works for the Building Maintenance and
Regeneration Voids as follows:
 
a) 
Voids Lot 1, Regeneration Voids of a budget value of
approximately £1.97m per year, and over the whole contract
term, a value of approximately £7.88m (Excl VAT), £9.45M (Incl Vat) 
 
b) 
Voids Lot 2, Building Maintenance Voids of a value of
approximately £1.85m per year and, over the whole contract
term, a value of approximately £7.40m (Excl VAT), £8.88M (Incl VAT)
 
Reasons For Decision 
 
Following a compliant procurement process
under the Public Contracts Regulations 2015, the prevailing
procurement legislation at the time of launching the procurement,
this report recommends the award of contracts for specialist void
works to the two highest scoring bidders for Lot 1 and Lot 2
respectively. These medium-term contract arrangements will replace
the previous expired contracts and address the increased demand for
void works whilst supporting the in-house service to ensure
continuity of service delivery.
 
The procurement results demonstrate excellent
value for money for the Council and will enable the continued
delivery of works by specialist contractors, providing essential
support to the Direct Labour Organisation (DLO) in completing these
tasks. The void works are delivered through a mixed economy
approach utilising both the in-house repairs team and external
contractors working alongside the DLO. This diversified delivery
model has proven highly effective, achieving strong value for
money, maintaining competitive tension, providing flexible
resources to meet varying workloads, and accessing specialist
trades not available within the in-house capacity.
 
The quality of repair services remains
fundamental to Council operations and the enhancement of key
performance indicators. Therefore, the Council's commercial team is
committed to continuing this successful partnership approach with
specialist contractors to support both the void works programme and
the DLO's operations.
 
The compliant tender process has identified
two preferred bidders whose proposals offer the best combination of
quality, value, and service delivery capability. This report
therefore recommends proceeding with contract awards to both
successful tenderers.
 
Approach:
 
Following the completed procurement strategy
utilising a Public Contracts Regulations 2015 above-threshold
restricted procedure, comprising a pre-selection (SQ) stage and
tender (ITT) stage, the recommendation is to award contracts to the
two highest scoring bidders who have met the minimum standards set
for the specific quality assessment method statement questions.
This approach has demonstrated the greatest value for money for the
council.
 
The procurement utilised a pricing model based
on the National Housing Federation's Schedule of Rates version 7.2,
which is an industry standard. Tenders were evaluated on the basis
of 70% price and 30% quality, ensuring a balanced assessment of
cost-effectiveness and service quality.
 
Benefits of the
Approach:
 
· 
Operational Resilience: The dual contractor approach provides
essential backup provision when capacity issues may arise with the
internal DLO, ensuring continuity of service delivery.
 
· 
Enhanced Capacity: Additional resource capacity is now available to
support the housing emergency plan when required, providing the
council with greater operational flexibility.
 
· 
Increased Throughput: The ability to process a larger volume of
voids through the distribution of work between internal and
external resources will improve overall service efficiency.
 
· 
Workforce Optimisation: The use of external contractors alongside
directly employed operatives facilitates the optimal utilisation of
directly employed operatives' time. That is, operative numbers can
be set at a level to ensure that they will always have sufficient
work (their time can always be fully utilised) and external
Contractors used to facilitate any surges in demand and / or
resource any unforeseen events.
 
· 
Risk Mitigation: Dividing the contract into two separate lots
significantly reduces the risk of service disruption due to
supplier failure, providing the council with greater security of
supply.
 
This procurement outcome supports the
council's strategic objectives whilst delivering proven value for
money through a compliant and competitive process.
 
Alternative Options
Considered and Rejected
 
Following evaluation of procurement options
during the business case stage, the restricted procedure was
selected and has now been successfully completed, with the two
highest scoring bidders identified for contract award.
 
Option 1: Open Procedure -
This route was considered during the business case stage but
rejected due to the potential to receive submissions from over 30
suppliers, creating an unmanageable evaluation burden within the
available timeframes. Given that current services operated through
single tender actions expiring at year-end, and with General Build
Contract 1 in mobilisation phase providing only limited resilience,
the extended duration of an open procedure would have compromised
service continuity. The regeneration voids single tender action was
due to expire at year-end, which would have resulted in no
contractor capacity and halted delivery of essential works.
 
Option 2: In-house
Delivery/Insourcing - Utilising the DLO exclusively was
considered during the business case but rejected as the DLO lacked
capacity to perform works ranging from small to large scale.
Deploying the current workforce, which had not expanded within
targeted parameters, would have reduced operative availability in
other essential trades. The service area review which is planned to
be completed in 2025 includes an expansion plan to increase
insourcing capacity. The selected procurement approach supports the
insourcing strategy by providing external support whilst the DLO
grows incrementally.
 
Option 3: Framework
Utilisation - Framework procurement was considered during the
business case but rejected as it failed to demonstrate best value
for money. The contract value would have incurred framework fees
ranging from £187,500 to £312,500 (typically 1.5% to
2.5%), with partnership fees of 2%. The competitive procedure has
achieved better rates on the schedule of works without additional
percentage fees.
 
Option 4: Existing Contract
Utilisation - Incorporating these works within General Build
Contract 2 was considered during the business case but rejected.
The size and value would have prevented permissible variation under
Regulation 72 of the Public Contracts Regulations 2015. Separate
monitoring was also preferable as the projects are managed by
different teams.
 
Option 5: Do Nothing - This
option was rejected during the business case as external contractor
support was essential. The DLO could not deliver all regeneration
voids and required external support for larger building maintenance
voids to prevent loss or rental income to the council.
 
The selected restricted procedure has
successfully addressed these constraints whilst ensuring service
continuity and delivering the anticipated value for money through
the identification of two preferred bidders for contract award