Content

Salford City Council – Record of
Decision
 
I Paul Dennett, City Mayor, in exercise of the powers contained within the
Council Constitution,
do hereby approve:
 
·     
an exception to Contractual Standing Orders as
permitted within the City Council Constitution for the reason(s)
highlighted in the table below and the award of the Contract for
the Irwell Street Phase 1 scheme, as detailed in the table
below:
 

Detail required

Answers

Title/Description of Contracted
Service/Supply/Project

Irwell Street Phase 1

Name of Successful
Contractor

English Cities Fund

Supplier Registration Number

(to be supplied by Corporate
Procurement)

LP007969

Type of organisation

(to be supplied by Corporate
Procurement)

Other

Status of Organisation

(to be supplied by Corporate
Procurement)

Non-SME

Contract Value (£)

£1,176,406.71 (ECF Costs)
£194,579.90 (SCC Costs)
£267,421.78 (QRA)

Contract Duration

30 months (6 months construction and 24-month
aftercare)

Contract Start Date

10/11/2023

Contract End Date

09/05/2025

Optional Extension Period 1

Not applicable

Optional Extension Period 2

Not applicable

Who will approve each Extension
Period?

Not applicable

Contact Officer (Name &
number)

Simon Telford

Lead Service Group

Place

Reason for CSO Exception: The goods / services /
works are only obtainable from one provider and there is no other
provider available to allow genuine competition

Tick if it applies

Reason for CSO Exception: The execution of works or
the supply of goods or services is controlled by a statutory
body

Tick if it applies

Reason for CSO Exception: Delivers Best Value to the
Council

Tick if it applies

Reason for CSO Exception: Special education, health,
or social care contracts, if it is considered in the
Council’s best interests and to meet the Council’s
obligations under relevant legislation

Tick if it applies

Reason for CSO Exception: The execution of works or
the supply of goods and services is required so urgently as not to
permit compliance with the requirements of competition

Tick if it applies

Reason for CSO Exception: Security works where the
publication of documents or details in the tendering process could
prejudice the security of SCC and Salford residents

Tick if it applies

Reason for CSO Exception: Procurements made through,
or on behalf of, any consortium, local authority, statutory or
similar body, provided that tenders or quotations are invited and contracts placed in accordance with
national or EU legislation.

Tick if it applies

Funding Source

Combination of Above (please detail below)

Ethical Contractor (EC): Mayor’s Employment
Charter

 AE Yates (Main Contractor)
 

EC: Committed to sign up to the Charter

EC: Accredited Living Wage Employer

 
 
The reasons are:
An exception is  requested for the Council to enter into a
contractual legal agreement with English Cities Fund (ECF) setting
out their financial contribution to the scheme and arrangements for
delivering the scheme. This includes the main construction costs
and ECF’s contract administration costs and legal
costs.
 
This approach is recommended for the following
reasons:
Reason for CSO Exemption
(1) - The goods/ services/ works are
only obtainable from one provider and there is no other provider
available to allow genuine competition.
 
The scheme is immediately adjacent to ECF’s
Plot A3 development with the planning red line boundary, from the
development, extending into the highway. The development is subject
to an existing S278 agreement to deliver separate highways works
adjacent to the building on Irwell Street and Stanley Street. This
results in a close interdependency between the two schemes.
Construction works and access requirements for the Eden building,
including the S278 works, extend into the anticipated construction
boundary for the Irwell Street scheme.
 
A co-ordinated approach will ensure the S278 work
associated with the development integrates with the highway and
public realm for the Irwell Street scheme, including where there is
any overlap in the construction programmes. There will also be a
requirement to manage the interface with the fit out of the Eden
building. ECF has maintained involvement in the project throughout
the development phase, via an existing commission to progress the
scheme designs to RIBA stage 3. This work has included input as a
key stakeholder into the Stage 4 design, providing cost consultancy
support and assistance with market testing. This work, and their
role in delivering the adjacent S278 works, ensures ECF was
best-placed to oversee the procurement
process and manage the contract for the scheme.
ECF’s continued involvement ensures embedded
knowledge within the project team is maintained and there is a
seamless transition to the delivery phase. It ensures that the
highway/public realm works being delivered as part of the Eden
development integrate with future phases of the scheme.
 
Furthermore, the funding of the scheme includes a
financial commitment from ECF towards the delivery of the scheme.
As a result of this financial commitment and interface with the
adjacent Eden works there are significant benefits in ECF’s
continued involvement. There are also advantages in external
delivery to reduce resource commitments within the Council at a
time when there is a significant pipeline of infrastructure schemes
in the city.
Reason for CSO Exemption
(2) - The proposed approach Delivers
Best Value to the Council competition.
 
As outlined above, the proposed approach would
ensure a more efficient model of delivery with reduced risk of
project delay, and therefore cost savings, when compared to
alternative delivery models. ECF’s knowledge of the project
provides the opportunity to provide cost savings within the
transition to project delivery and the management of the contract.
The inclusion of a competitive tender process for the main contract
ensured tender submissions were assessed against their economic
value.
 
A key financial benefit for the Council is that it
would reduce exposure to financial risk. Under the proposed  arrangement ECF
procure the works through their bespoke contract. Risk ownership
would largely be transferred to the contractor to minimise the
potential for overspend.
 
For the above reasons, Option 2 is considered to
present the best value to the Council. Evidence of where this
approach was successfully used can be seen on the nearby New Bailey
Gateway Phase 1 scheme. For this scheme ECF were appointed to
deliver the highways and public realm works with the works
delivered on time and within budget.
 
The Council and ECF have successfully managed to
secure a funding package for the Irwell Street scheme (refer to
Source of Funding). This includes a financial commitment  from ECF
towards the delivery of the scheme and the funding of adjacent S278
works. This joint investment and shared objectives for the scheme
ensures there will be a shared emphasis on achieving both quality
and value during delivery.
 
Options considered and rejected were:
That the Council’s in–house technical
services team would oversee the procurement of a suitable highways
contractor to deliver the scheme through an existing framework or
in open competition. The Council would be responsible for contract
management and oversee co-ordination with works at the adjacent
Eden building.
 
Assessment of risk:
Medium: At this stage of the project
the key risk is availability of funding. The scheme has funding to
progress the development of the full scheme (Phase 1 Irwell Street
and future phases). The delivery of the Irwell Street scheme will
be subject to securing Active Travel Fund (3) funding, up to a
£1million maximum commitment, through submission of a
business case. Additional funding has been identified for the
outstanding balance from a local contribution and developer
contributions (refer to Source of Funding).
 
The
evolution of the highway network in the city centre and potential
impacts on junction capacity will be monitored as the scheme
progresses. SCC is working closely with TFGM’s modelling
staff and Manchester City Council to assess the potential impacts
of network changes in the city centre.
 
A
further risk is interface with adjacent schemes and ensuring that
schemes integrate and complement each other. This includes the
adjacent Eden development. Co-ordination of works and alignment of
construction programmes will be crucial to manage impacts. This
also includes co-ordination with other highways works in the city
centre, in particular where construction programmes overlap. A
co-ordinated approach for traffic management will be necessary to
minimise disruption. SCC has commissioned TfGM to undertake traffic
modelling to understand the impact of traffic management, during
the construction phase, on the highways network.
 
If
the scheme does not progress then there
will remain a gap in the walking and cycling network at this
location. Strategic improvements to this gateway location, and
integration with the adjacent footway and landscaping improvements
for the Eden building will not be realised.
 
Delays to the project award
would mean that the construction programmes for completing the Eden
building and the scheme would not align. It would also extend the
period of highways disruption at this location as a result of the
current temporary traffic management on Trinity Way.
 
The source of funding is: The
following table summarises the proposed funding sources for the
scheme:
 

Funding Source (Scheme Delivery)

£

ATF
Grant

£1,000,000.00

ECF 
Contribution towards S278
works

£100,000.00

ECF
Contribution

£75,000.00

SCC -  reallocation of grant
funding

£190,000.00

SCC - Balance from
S106

£273,408.39

Total

£1,638,408.39

 
Legal advice obtained -
Supplied by the Shared Legal Service 08.09.2023:
Ordinarily when commissioning contracts for the procurement of
goods, services, or the execution of works the Council as a
‘contracting authority’ must comply with the Public
Contract Regulations 2015 (PCR) as well as the provisions of its
own Contractual Standing Orders (CSO’s), Financial
Regulations and the duties of Best and Social value. In addition,
whilst these services fall below the financial threshold for works
contracts under PCR, contracting authorities are still required to
treat contractors equally and in a non-discriminatory way and act
in a transparent manner, failing which the award of a contract may
be subject to legal challenge.
 
However, in exceptional circumstances where CSO’s permit,
the Council may dispense with strict compliance of its CSO’s,
and the report sets out the reasons for the request for the
exception, in accordance with paragraph 3.1 of CSO’s. Whilst
exceptions to CSO’s may be authorised by an approval from the
Procurement Board, and in this instance by City Mayor on the
recommendation of Procurement Board as the amount exceeds
£1million, there is still a risk of challenge from aggrieved
providers if the usual tender process has not been followed on the
basis that it ought to have been advertised and put out to
competition.
 
The
risk of challenge increases with the value and duration of a
proposed contract being awarded. The report sets out the reasons
for procuring ECF to deliver the construction works for the scheme
following a tender exercise, overseen by ECF, to confirm the main
contractor. The report highlights the potential benefits and social
value to the Council if this approach is taken and states the
reasons for why an exception will be sought from Procurement Board
for the appointment of ECF. This includes the potential for
financial benefits and the fact that ECF are already on site in
delivering the Eden Building.
 
The
Council is also under a best value duty to carry out its functions
economically, efficiently and effectively with the objective to
achieve value for money in all public procurement. The Council has
considered two options for project delivery. It has concluded that
the proposal to award the contract to ECF for them to deliver the
scheme would be of least risk and of most benefit to the
Council.
 
Detailed reasons for justification of the exception are set out
in the report, including value for money considerations, a required
co-ordinated approach to ensure the associated s278 work integrates
with the highway and public realm for the Irwell Street scheme, and
the significant logistical and delivery challenges should different
contractors be required to work alongside each other in a
constrained space.
 
Also
the appointment of ECF is the most efficient method of delivering
significant time and cost savings as the incumbent team has already
carried out significant work to understand the highway and public
realm requirements associated with the development. Their
appointment would avoid unnecessary additional and duplicitous
costs and ensures a more efficient model of delivery.
 
In
selecting the main contractor ECF undertook a restricted
procurement process, similar to the approach used with the New
Bailey Gateway Phase 1 works. The procurement process was
undertaken by ECF’s consultant team who, in conjunction with
the Council’s Procurement Team, sought bids for undertaking
the works using a restricted tender process with appropriate
published evaluation criteria, to be considered on a MEAT basis as
set out in the report.
 
It
is important that the Council complies with the terms of any
conditions contained in the grant funding agreement with GMCA (in
particular ensuring that the funding is only used for eligible
expenditure) and any timescales around expenditure and reporting
are adhered to, otherwise the Council may be at risk of clawback of
the funding for failure to comply.
 
The report also refers to some
of the funding for the works coming from s106 funds. The
expenditure must be in accordance with the terms of the relevant
planning obligations. Should the Council allocate S106 funding
outside of the conditions within the agreements, or outside the
timescales, or in breach of applicable Regulations, a developer may
challenge that decision and claim back contributions.
 
Financial advice obtained - Supplied by Hollie Faulkner, Finance Manager
(Place and Service Reform) 11.09.2023:
The
Council made a Tranche 5 funding submission to the Greater
Manchester Mayor’s Cycling & Walking Challenge Fund on
the 5th of April 2019 for an ‘Active Centres, Corridors &
Neighbourhoods Project’ in City Centre Salford. In June
2019, the Council was advised that its
submission had been successful and that it had been awarded project
development funding to progress designs and business cases.
Following a period of project development, the project team are now
looking to progress with the delivery of the scheme at Irwell
Street. The latest estimate for the full cost of
delivering the scheme is £1,638,408.39. The proposed sources of
funding for the scheme are:
 

-      
£1,000,000 – Grant Funding from the
Active Travel Fund 3, subject to full business case approval, to be
claimed through the agreed quarterly claims mechanism.
 

-      
£175,000 - ECF contribution, including S278
works, agreed in principle pending grant funding full business case
approval.
 

-      
£273,408.39 -  Agreed and received S106 Contributions Ref:
14/64851/FUL, allocated as per Property and Regen Report 22nd
February 2021.
 

-      
£190,000 – Confirmed reallocation of
underspend of DfT Pinch Point Grant
 
The full business case is to be
submitted for approval with final costs in October 2023. No
purchase orders to be raised until the Grant Funding and ECF
contributions are fully approved.
 
Procurement advice obtained - Supplied by: Heather Stanton,
Category manager xt 6241:
The main construction contract
was tendered as a restricted tender. The procurement process was
undertaken by ECF’s consultant team with oversight from
SCC’s Procurement Team to oversee this to ensure compliance
with SCC standing orders and PCR’s 2015.
 
HR advice obtained: N/A
 
Climate
change implications obtained - Supplied by: Simon Telford in
consultation with Michael Hemingway (07.09.2023):
The
scheme and the development of the Bee Network in city centre
Salford will support mode shift from private car to walking and
cycling. One of the scheme’s central objectives is increasing
walking and cycling. More sustainable travel choices will help to
reduce transport related emissions.
 
The
introduction of green infrastructure and sustainable urban
drainage, complementing the green credentials of the adjacent
Eden building, will also support sustainable drainage and make
the area more resilient to the impacts of climate
change.
 
Contact details:
Contact Officer: Simon Telford
Telephone number: 07799677214
 
Please delete from the bullets
below any which are not relevant:
·     
This matter is not subject to consideration by
another Lead Member.
·     
The appropriate Scrutiny Committee to call-in the
decision is Growth & Prosperity
 
 

Signed:    Paul
Dennett     Dated:     27 September 2023.
           
      City
Mayor
 

FOR DEMOCRATIC SERVICES USE
ONLY
 
*          
This decision was published on 29 September 2023
*          
This decision will come in force at 4.00 p.m. on 7 October 2023
unless it is called-in in
accordance with the Decision Making
Process Rules.