The Hackney Procurement Board approved the award of a contract for domestic electrical testing and inspections. This decision aims to address a significant backlog of essential safety checks in residents' homes.

Domestic Electrical Testing and Inspections Contract Award

The Board approved the award of a contract to Supplier A for domestic electrical testing and inspections. The contract, valued at £2.2 million including VAT, will run for an initial period of one year with an option to extend for a further year, making a total contract period of two years. This decision is crucial for Hackney Council to meet its commitment to the Housing Regulator to recover the backlog of electrical testing and inspections within the next two years.

The report presented to the Board highlighted that the council's Direct Labour Organisation (DLO) currently undertakes approximately 1,300 electrical tests per year, which is insufficient to address the growing backlog. There are an estimated 15,000 electrical inspections requiring action, a figure that has risen significantly. To rectify this, the council plans to increase the DLO's allocation to 7,000 tests and engage external providers for an additional 11,000 tests. This contract with Supplier A will cover 5,000 of those external tests.

The council has been working with external contractors through pilot programmes to assess the viability of a hybrid operating model, combining the DLO's capacity with external support. These pilots were successful, validating the operational and financial efficiency of this approach. The report also noted that the backlog had grown during the tender process, necessitating an additional external contract. To address this urgency, a direct award via the Fusion 21 framework to the contractor who completed the pilot was proposed, with an anticipated value of up to £900,000. This additional contract will be addressed under a separate tender process.

The report outlined several alternative options that were considered and rejected. These included increasing in-house provision, which would require significant interim staffing and resources; undertaking an open tendering exercise, which was deemed too time-consuming; and using existing Hackney frameworks, which were not yet sufficiently developed to meet the immediate need. The option of doing nothing was rejected due to the risk to residents and the commitment made to the Housing Regulator.

Funding for the contract is to be met from the Housing Revenue Account (HRA), with a dedicated budget of £1.7 million allocated for the 2026/27 financial year. The contract cost is considered affordable within this existing budget.

The procurement process followed a mini-competition call-off from the Fusion 21 - Heating, Renewables and Electricals Framework, Lot 7. The evaluation criteria weighted quality at 35%, social value at 15%, and commercial offer at 50%. Supplier A was the highest-scoring bidder, demonstrating strong performance across all areas, including a competitive commercial offer that was approximately 50% lower than the highest bid received and also lower than rates paid during the pilot contract.

The contract includes Key Performance Indicators (KPIs) to monitor performance, covering areas such as customer satisfaction, safety, cost predictability, and social value. The contractor is required to adhere to strict standards, with a minimum number of Green (target standard) KPIs and no Red (below minimum acceptable performance) KPIs.

The social value commitments from Supplier A include job creation for local residents, mentoring sessions for young people, donations of time and equipment to local community initiatives, and employability advice. The council's commitment to sustainability is also integrated, with requirements for the contractor to minimise emissions, use sustainable materials, and manage waste efficiently.

The decision to award this contract is considered a Key Decision and will come into force after five clear working days, unless called in by at least five non-executive members.