Decision details

Date of Decision:

30 July 2020

Decision Maker:

(Including Job Title)

Tom Bell (Assistant Director of Housing)

Specific Delegation:

(If any)

On 21 October 2019, Cabinet approved the development of 171 new homes across three town centre sites.

Cabinet authorised the “Assistant Director of Housing to undertake any necessary procurement and award tenders for contracts associated with the delivery of the proposed scheme.”

Brief Description of Decision:

To enter into a construction contract with Willmott Dixon Construction Ltd (WDCL) for the development of new housing at the following sites:-

-         Sheffield Road car park

-         Millfold House, Westgate

-         Henley’s Garage, Wellgate

Reasons for the Decision:-

The decision is necessary to implement the decision of Cabinet in October 2019 to develop 171 home across three sites in the town centre.

Since January 2019, the Council has worked with WDCL to develop these schemes to construction stage. The long pre-construction period has allowed significant site investigation work to take place, which has reduced or eliminated many of the employer risks to which the Council is exposed.

The Council received the final price submission from WDCL on 1 May 2020. The Council’s cost consultants Gleeds Cost Management have scrutinised and challenged the submission to ensure that the Council achieves value for money. The agreed contract price is within the capital budget approved by Cabinet and leaves some contingency to deal with unforeseen costs that may arise.

The Contract follows the standard format NEC Option A as per the original tender via YORbuild in 2018. It has been drawn up by Freeths Solicitors on the Council’s behalf, with assistance from Gleeds. The Council’s Legal Services have been consulted throughout, providing advice where required.

A session was also held with Council Finance officers to assess the outstanding employer risks in the context of the approved budget. Factored analysis of those risks shows that the contingency should be sufficient to cover them.

Two key areas for discussion during contract negotiations were the risks associated with COVID-19 and EU Exit. The COVID-19 risk will be shared between the parties, with WDCL accepting the risk up to the end of 2020 and the Council being liable from 2021 onwards. The Council will be liable for any increased costs that arise from any increased tariffs resulting from the terms of the UK’s exit from the European Union but the contract requires WDCL to use all reasonable endeavours to identify alternatives to materials imported from the EU, if required, in order to avoid additional costs.

The Council has previously entered into two contracts with WDCL relating to the 3 Sites project: a Professional Services Contract (PSC) and a Short Form Contract (SFC) for site enabling works. Both contracts are subsumed by this construction contract. The value of the purchase order to be raised reflects that some of the works within the contract have already taken place under previous purchase orders. It also includes contingency to allow for compensation events under the contract, up to the value of the budget approved by Cabinet in October 2019.

Details of alternative options considered and rejected:

The alternative option is to retender the scheme to try and achieve a better price. This would delay construction by several months, putting external grant funding at risk as completion dates would not be met. There is no guarantee that a better price could be achieved. The cost could increase due to construction inflation.

Conflicts of interest declared by any Executive Member consulted by the decision maker which relates to the decision:

n/a

Dispensations Granted:

(If any)

n/a

Reports or parts of reports considered

Report to Cabinet, 21 October 2019: “Delivering town centre housing on Council sites.”