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RESOLVED:
 
Agree to the use of
a two-stage design and build contract model with a Pre-Construction
Services Agreement (PCSA) via the Public Contract Regulations 2015
Restricted Procedure or Procurement Act 2023 Competitive Flexible
Procedure (CFP), for the selection of a main contractor to deliver
a mixed housing development of up to 355 new homes on the De
Beauvoir  Estate.
 
Delegate authority
to the Group Director, Climate Homes and Economy, in consultation
with the Group Director of Finance and the Director of Legal,
Democratic and Electoral Services to:
 
Enter a
Pre-Construction Services Agreement (PCSA), which may include but
is not limited to work relating to design, value engineering,
surveys, utilities, demolition and enabling works
 
Enter a main
building contract and if appropriate any preceding or parallel
demolition or enabling works contract with the preferred contractor
or one or more suitable specialist early works contractors, upon
satisfactory completion of the Pre- Construction Services Agreement
(PCSA stage).
 
Should a position
representing acceptable performance and/or value for money not be
reached by the preferred contractor at any point during or upon
conclusion of the Pre Construction Services Agreement (PCSA) stage,
to enter into the contracts described at (a) and (b) above, as
appropriate, with the reserve bidder appointed during the first
stage of the two stage tender.
 
 
Reasons For
Decisions
 
Overview of the De Beauvoir Estate project
The De Beauvoir Estate project is a mixed
tenure housing regeneration that forms part of the Housing Supply
Programme. This report outlines the proposed process for procuring
a construction contractor to deliver the new housing, re-provided
commercial and community floorspace along with associated
landscaping and public realm works.
 
The De Beauvoir New Homes projects are located
on 12 infill sites across the estate, comprising 6 sites in DB1 and
a further 6 sites in DB2. The estate is located to the north of the
Regent’s Canal and south of Downham Road, bordering the
London Borough of Islington to the west and the De Beauvoir
Conservation Area to the north and east. Constructed in the 1960s,
the estate comprises five towers, a number of 4-7 storey deck
access blocks and 2-storey terraced houses.
 
The project emerged in two separate packages,
with design work starting on DB1 in 2018 and on DB2 in 2020,
following acquisition of a piece of privately owned land. DB1
secured full planning in July 2022 (Ref 2021/1906) for 189 new
homes. The DB2 planning application will be submitted in summer
2024.
A comprehensive scheme review and redesign was
conducted in 2022-2023 on both phases to improve the financial
viability, risk profile and deliverability of the scheme as they
were disrupted by Covid and further impacted by cost inflation and
regulatory changes. DB2 is now developed to RIBA Stage 3 and will
deliver around 145 new homes including through demolition of the
small obsolete residential and retail building known as Trinity
Court. A successful resident ballot was carried out on Trinity
Court in 2020.
 
Further design development will take place
during the Pre-Construction Services Agreement (PCSA) stage with
the benefit of contractor buildability, technical and supply chain
input, to arrive at a final detailed design for construction.
 
This report seeks agreement from CPIC to
commence the procurement of a main build contractor for this
scheme, via a two stage procurement process with a Pre-Construction
Services Agreement (PCSA). The form of contract for the PCSA will
be the Joint Contracts Tribunal (JCT) Preconstruction Services
Agreement (General Contractor) 2016 with London Borough of Hackney
amendments. The form of contract for the main build works will be a
Joint Contracts Tribunal (JCT) Design and Build Contract 2016 with
London Borough of Hackney amendments.
 
The outsourcing route is recommended because
the Council does not have the capability to carry out major capital
construction works in-house.
 
The Council will meet the full development
costs of the scheme and act as developer for the social rent,
shared ownership and outright sale homes. The Council’s
established Sales and Marketing Team shall market and sell the
shared ownership and outright sales homes under the ‘Hackney
Sales’ brand, following the established sales policy
including first dibs for local buyers.
 

policy including
first dibs for local buyers.

 
Alternative Options ( Considered and Rejected)
 

The Council’s preferred option is to appoint a contractor
via a PCSA and a JCT 2016 Design and Build contract, with Hackney
amendments. A number of alternative procurement routes have been
considered to achieve these requirements. The matrix of time, risk
and cost has been used to consider each method.

 

A
single stage approach can produce a number of benefits, but also
carries a number of inherent risks. It would enable the Council to
obtain an early contractual commitment on price, but should it
become necessary to make any changes to the brief post-tender this
can undermine the original price. The single stage approach
provides the potential for a clear risk allocation between the
client and contractor, but this may be undermined if the
contractor’s assessment of cost, programme or working method
is initially incorrect. The single stage approach provides the
opportunity for the Council to set a clear timetable, but the need
to clarify proposals, which is often required, can extend the
intended timescale which is a risk to the funding of the project as
it has a bound commitment with the GLA to start on site by March
2026. In addition, receipt of tenders above budget could delay the
project as redesign and re-pricing must be completed before the
contract sum is agreed.

 
3 
The option to not appoint a reserve bidder has been considered and
rejected, as having a reserve bidder enables the Council to retain
some competitive tension with the preferred bidder; and, provides a
procurement-compliant alternative to the preferred bidder in the
event that the design/price is not in line with the Council’s
budget and requirements.