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RESOLVED:
 
1.  To approve the procurement of a framework with a
value of up to £24m for capital lifts works over the 4 year
framework period. Page 59
 
2.  To approve the procurement of a 4 year (2+1+1)
Framework Agreement for Capital Lifts works to appoint a minimum of
3 contractors.
 
3.  To delegate the contract award for the Framework
Agreement and 1st year call off contract to the Group Director,
Climate Homes and Economy, following consultation with the Group
Director, Finance and Corporate Resources, and the relevant Cabinet
Members, Housing Services & Resident Participation, and
Insourcing & Customer Services. This is to allow sufficient
time frames for due diligence in ITT evaluation and Leaseholder
consultation to commence as soon as practically possible.
 
4.  To note that the report on the contract award for
these works will be reported to the Cabinet Procurement and
Insourcing Committee (CPIC).
 
Reason(s) For
Decision
 
1. 
The current interim contractual arrangement was put in place in
June  2021, and is currently
being delivered by Apex Lifts Limited. This contract was
established to allow PAM to cover the interim period while a new
framework was being procured to include both Lift Repairs and Lift
Capital Works. This was proposed by two previous business cases.
However, this contract is only delivering repair and maintenance,
and no capital renewal works are currently being delivered. This
has resulted in LBH being unable to invest accordingly in its lift
stock. 
2. 
The business delivery strategy detailed in the two previous
business cases have been deemed inadequate by the Service as a
result of a change in the strategy to now have two separate
delivery strategies; 1) A Lift Capital Works  Framework Agreement and 2) A Lift Servicing,
Repairs and Maintenance (revenue) Contract.
3. 
The purpose of the development of a separate delivery strategy for
Lift Capital Works Framework Agreement is to provide the Council
with an effective and efficient delivery mechanism to address the
backlog of capital investment works, maximising the number of lift
renewal projects to be delivered per annum, and to contribute to
broader Council ambitions of creating a fairer, safer and more
sustainable Hackney.
 
Alternative Options
(Considered and Rejected)
 
In order to consider options for this
procurement, the project team carefully considered some key
decisions relating to contract types, and the context of wider
housing strategy;
 
Option 1 - Let
multiple 10 year Term Contracts
Consideration was given to using longer
partnering contracts for these works as part of this procurement
exercise. These contracts have significant advantages, including
delivery efficiency savings, increased social value and greater
certainty for supply chain partners.
 
However, such contractual arrangements take a
minimum of two years from developing initial proposals to contract
mobilisation. In the absence of an existing arrangement, it is
imperative to implement a solution in a much shorter time-frame.
For this reason, it was concluded that this option is not as viable
as others identified, and, therefore, rejected.
 
Option 2
–  Letting one Term Contract
The option of letting a single term contract
was considered.  However, this was
quickly discounted because of the lack of an alternative contractor
should they not perform, and also the lack of recent capital
investment has meant that there is likely to be too much work for a
single contractor to undertake.  It was
concluded that this option is not as good as others identified,
and, therefore, rejected.
 
Option 3 -
Insourcing the entire contract
Technical resources with very specialist
qualifications would be required for the lift renewal and
installation works.  There is very
limited time available to scale up to recruit such a team and
it  is not clear this would be
possible.
The specialist nature of lift parts would also
require the council to put in place new supply chains sufficient to
cover the wide range of brands and types of lifts in the borough.
This is likely to be prohibitive and presents a very significant
risk to successful investment in lift renewal programme.
 
A further barrier is that it is not possible
to consult with leaseholders on the appointment of the
DLO.  This would mean that works subject
to a Section 20 notice (above £250/unit) would not be fully
rechargeable without additional procurement work, or a dispensation
from the First Tier Tribunal (which is unlikely to be
forthcoming).  This would be too
significant a financial loss to the council as would not allow to
recover costs incurred.
This option would also mean that the council
would take full responsibility for design work and for the health
and safety of operatives which is a very significant risk for the
Council.
 
Option 4 - Framework
of 3 Contractors for Lift Capital Works
The preferred option involves letting a
Framework Agreement of 4 years duration and including 3
contractors.  Where any of these
contractors fail to perform, the Council could remove or suspend
them pending improvement, and award the works to another contractor
on the framework.  Lift renewal projects
could be allocated on an annual basis or mini-tendered between all
contractors on the framework allowing for competitive
pricing. 
 
The preferred option involves letting a
framework contract of 4 years duration and including 3 contractors.
The first lift renewal programme of 39 lifts  will be split between the 3 top contractors on
contract award. Any of these 
contractors fail to perform, the council could suspend or remove
them, and award the works to the next contractor on the
framework.  Future Lift renewal projects
will be awarded based on ranked KPI scores, with the option of a
mini-tendered process between all contractors on the framework.
 
This option allows the Council to manage the
risk of under performance and allow
management of capacity across framework contractors.
 
Option 5 -
Appointment via an External Framework
Due to the requirement for leasehold
engagement, the strategic nature, value of the contract and
specialist area, an external framework is not deemed to be a
suitable option for this requirement. 
For these reasons, it was concluded that this option is not as good
as others identified, and, therefore, rejected.