Decision Maker:

Outcome: For Determination

Is Key Decision?: Yes

Is Callable In?: Yes

Date of Decision: October 7, 2024

Purpose:

Content: RESOLVED:   1.  To approve the proposed procurement strategy to procure capital work contracts for planned capital works via a mini-competition off an external framework, Fusion 21 (Lot 1 – Refurbishment, Construction, New Build & Modular Buildings framework or Lot 9 - Building Improvements framework), and appoint up to 4 contractors for the contract term as set out below in Table 1. 2.  Delegate the sign-off of the contract award for the successful contractors' call-off from the Framework to the Group Director of Climate Homes and Economy. 3.  Delegate the subsequent approval for the individual works packages ‘Commencement Agreements’ to the Chair of the Housing Investment Board. 4.  Note that the contract award report for these works will be submitted to the Cabinet Procurement and Insourcing Committee (CPIC).   Table 1: Framework contracts duration and estimate value     Contract Duration Preferred Contractor Works type Estimated Value 4 Year (2 years with an option to extend for up to two 12 months periods) Up to 4 main contractors Planned Internal and External Works £45m/ annum     Reasons For Decision   1.  The reasons for proposing this capital work procurement option are set out to include consideration of: ·  The need for the Council to fulfil its legal obligations as a landlord for the maintenance of its homes and estates; ·  The opportunity for capital investment works to contribute to broader Council ambitions of creating a fairer, safer and more sustainable Hackney; ·  The ambition is to ensure our homes and estates are places residents are proud of.   2.  The key deliverables for this procurement are:   ·  Procuring construction services to ensure the Council can invest in homes to fulfil its legal obligations as a landlord; ·  Procuring these contracts in line with the provisions of the new Housing Asset Management Strategy 2019-2027; ·  Provision of cost-efficient, quality-driven related works across the entire housing stock, which are focussed on the greatest investment need, and meet all relevant technical standards; ·  Appointing contractors who are suitably flexible in their scope to respond effectively to resident consultation suggestions for works to homes and estates; ·  Maximising the indirect social value from these contracts through local employment, community investment and resident satisfaction with the quality of their homes and local area; ·  Ensuring that capital works can support the Council’s broader sustainability objectives, such as the air quality action plan, as well as improving the energy efficiency of homes to reduce fuel poverty; ·  Ensuring compliance with the Council's Standing Orders, Regulatory Procedures, and the Council’s Corporate Policy.     Alternatives Considered and Rejected   Option 1 - Consider moving to a Long-term Capital Work Partnering Contracts   1.  Contract 1 ended in August 2019; the lockdown and limited internal resources contributed to the delay in re-procuring the new capital work framework contracts. 2.  The team reviewed procurement time for an Open or Restricted procurement exercise. This option would take over 12 - 18 months to achieve, whereas the external framework route could be completed in 4 to 6 months. At this point in time, the framework route is preferred because of the urgent need to mobilise new contractual arrangements. 3.  The Council must continue the capital investment programme to prevent delays in major repairs and ensure that essential safety projects are carried out promptly. Delays in capital projects could also lead to extra strain on repair budgets. Certain capital projects are being carried out using external framework contracts, mostly with no recharge for leaseholders. Therefore, not proceeding with the proposed Planned Capital Works - Term Contracts for Property and Asset Management would significantly reduce capital investment over the next two years. 4.  While this option may, in the long term, provide a better route to delivering our capital work programmes, it was rejected at this point due to the length of time it would take to get contractors on the ground and the risks associated with the need to deliver much-needed capital improvement work and essential fire safety work.   Option 2 –  Procure a Stand Alone Contract for each Project   5.  The option of carrying out individual procurement exercises for each project was rejected as this would involve significant work in carrying out public procurement exercises, which require additional staff time. This option involves an individual tender process to let any capital work. Furthermore, this would include the two-stage leasehold consultation, where work is subject to recharge, which means extended contract mobilisation onsite. 6.  Generally, this option requires more resources than the preferred option to use an external framework and would take much longer to procure resulting in extended wait time for tenants for much needed capital improvement work . 7.  For the reasons above, this option was rejected as the main course of action, though the Council may elect to pursue it if conditions arise.   Option 3 – Insourcing the Works to the DLO   8.  The option of in-sourcing the planned capital works is not viable. The scale of the work and risks associated with it makes it neither desirable nor possible to restructure the DLO in time to carry out this work. This option was rejected.