Content

RESOLVED:
 
1. Agree to the use
of a two-stage tender with a Pre-Construction Services Agreement
(PCSA) via the Find a Tender Restricted Procedure, for the
selection of a main contractor to deliver a mixed 3 Page 69 housing
development of up to 55 new homes on the Frampton Park Estate.
 
2. Delegate
authority to the Group Director, Climate Homes and Economy, in
consultation with the Group Director of Finance and the Director of
Legal, Democratic and Electoral Services to:
 
a) Enter a
Pre-Construction Services Agreement (PCSA), which may include but
is not limited to work relating to design, value engineering,
surveys, utilities, demolition and enabling works.
 
b) Enter a main
building contract and if appropriate any preceding or parallel
demolition or enabling works contract with the preferred contractor
or one or more suitable specialist early works contractors, upon
satisfactory completion of the PreConstruction Services Agreement (PCSA
stage).
 
c) Should a position
representing acceptable performance and/or value for money not be
reached by the preferred contractor at any point during or upon
conclusion of the Pre Construction Services Agreement (PCSA) stage,
to enter into the contracts described at (a) and (b) above, as
appropriate, with the reserve bidder appointed during the first
stage of the two stage tender.
 
Reasons For
Decisions
 
Overview of the Frampton Park Estate
project
 
5.1. The Frampton Park project is a mixed
tenure housing development that forms part of the Housing Supply
Programme. It is located in the Victoria Ward in the London Borough
of Hackney. This report outlines the proposed process for procuring
a principal build contractor to deliver this new housing, along
with associated landscaping and public realm works.
 
5.2. The Council was granted planning
permission in June 2022 for the delivery of new homes on two sites.
The Frampton Park Community Hall site constitutes Phase 1 of the
redevelopment, with the Tradescant
House Garages site constituting Phase 2. The locations are shown on
the plan below, with the Phase 1 site in green and the Phase 2 site
in yellow.
 
5.3. The Frampton Park Community Hall site is
located above an existing residential block known as Woolridge Way,
and is bounded to the west by Petiver
Close and to the east by Well Street.
It currently comprises a community hall, garage block and Council
cleaning depot. The Council has planning permission to deliver 51
new, mixed tenure homes on this site.
 
5.4. The Tradescant House Garages site is located further to
the east, along the unnamed estate road that joins the two sites.
This site includes a disused underground parking structure and
garages as well as the undercroft of
Tradescant House. The Council has
planning permission to deliver 18 new homes on this site: five
Hidden Homes for social rent within the undercroft of Tradescant House and 13 homes for outright sale in
the Bookend Building to be appended to the side of the existing
Tullis House.
 
5.5. When the scheme previously went to CPIC
in July 2021, the complexity of Phase 2 was such that it made the
cost of the scheme unviable. Nevertheless, it was agreed that the
scheme would go out to tender as a single stage procurement, using
the Find a Tender competitive Procedure
with Negotiation, to test the market, with the view that additional
value engineering could be undertaken if required. However, tender
returns subsequently received for other Hackney housing schemes
later that year came in significantly over budget and in early
2022, the procurement of a contractor to build the new homes on
Frampton Park was put on hold while options to improve the
financial viability of the scheme were explored.
 
5.6. A significant amount of work has taken
place over the past two years to improve the financial viability of
the scheme. In October 2022, AECOM were appointed to review the
scheme and their final report in March 2023 made a number of
recommendations to secure design efficiencies and reduce costs.
 
5.7. For Phase 1 (Atrium Building), these
included recommendations relating to staircase design, facade
detailing and curved balustrading, as well as the size of the
atrium space and units, which were generally oversized compared to
London Plan requirements.
 
5.8. For Phase 2, it was noted that the
Bookend Building is less efficient in its layout than the Atrium
Building. In addition, the footprint of the building is too small
to accommodate the revised fire safety requirements. It was
therefore agreed with the Assistant Director of Housing
Regeneration and Delivery that Phase 2 would be put on hold,
enabling a focus on delivering Phase 1, and achieving approval to
proceed with Phase 1 via internal Gateway processes and CPIC.
 
5.9. East Architects were therefore instructed
to explore how the original design of the Atrium Building could be
adapted to meet new regulatory requirements and to propose design
amendments to improve the viability of the project. The build costs
and valuations relating to each proposed design were updated,
taking into account predicted interest rates, sales price forecasts
and tender/build cost inflation forecasts. This approach, including
the current focus on Phase 1, was ratified at the internal Gateway
2A meeting for the scheme in January 2024.
 
5.10. The proposed option takes into account
enhanced regulatory requirements around building safety, by
incorporating two lifts and two staircases to all floors within the
design. It proposes amending the atrium space within the Atrium
Building to a ‘stretched lozenge’ shape, which
rationalises the atrium shape, increasing its size and making the
flat layouts more efficient, thereby improving the financial
viability. A proposed additional floor section at fourth floor
level allows the incorporation of four additional homes, with an
updated, planning compliant tender mix. It is proposed that
additional design updates to allow the scheme to be resubmitted to
Planning will be included within the requirements of the Pre
Construction Services Agreement.
 
5.11. The estimated costs for the construction
of this option have been provided by AECOM and can be found in
Exempt Appendix 1 under Option 2B.
 
5.12. The Council will meet the full
development costs of the scheme and act as developer for the social
rent, shared ownership and outright sale homes. Further design work
will be required under a Pre
Construction Services Agreement (PCSA) to further develop
the Phase 1 scheme to respond to updated regulatory requirements
and to secure further savings through value engineering.
 
5.13. This report seeks agreement from CPIC to
commence the procurement of a main build contractor for this
scheme, via a two stage procurement process with a Pre Construction Services Agreement (PCSA). The
form of contract for the PCSA will be the Joint Contracts Tribunal
(JCT) Preconstruction Services Agreement (General Contractor) 2016
with London Borough of Hackney amendments. The form of contract for
the main build works will be a Joint Contracts Tribunal (JCT)
Design and Build Contract 2016 with London Borough of Hackney
amendments. The details of the procurement process are set out in
5.21-5.27.
 
5.14. The outsourcing route is recommended
because the Council does not have the ability to carry out works to
build new homes in house.
 
Alternative Options (Considered and
Rejected)
 
5.31. As noted in 5.22, the pre-tender
estimate for the Phase 1 works is above
the UK Public Procurement Threshold for Works
of £5,372,609 and is subject to the Public Contracts
Regulations 2015. This means that the opportunity must be
advertised on Find a Tender or procured from a suitable framework
contract.
 
5.32. The option to procure a contractor via a
single stage route has been considered and rejected. The single
stage route is considered unsuitable due to the additional design
work needed to bring the scheme up to current regulatory standards
and the value engineering required to bring the scheme to a
financially viable position. The two stage process allows the
Council to benefit from contractor buildability knowledge and
access to supply chains during the PCSA period, giving greater cost
certainty at the end of the PCSA period.
 
5.33. The option to procure a contractor via a
framework has been considered
and rejected, because the use of a framework
reduces competition, limiting the pool of potential contractors to
which the Council has access. It also presents a risk of receiving
insufficient bids for the scheme.
 
5.34. The following procedures available via
Find a Tender have also been
considered and rejected:
 
? Open Procedure: The Invitation to Tender
issued and any supplier may submit a tender. This is not considered
suitable for the Frampton Park scheme. It may result in the Council
receiving a large number of tenders, lengthening the assessment
process without adding value. Conversely, this approach may put off
some contractors who would otherwise bid for the scheme, as soft
market
testing has indicated that contractors tend to
prefer to be part of a smaller bidding pool.
 
? Competitive Dialogue Procedure: Any supplier
may submit a request to participate by providing the information
for qualitative selection. Following assessment, suppliers invited
may participate in the dialogue and final tenders are invited once
the dialogue process is complete. This is generally used where a
client cannot specify their requirements or cannot assess without
dialogue what the market can offer in terms of technical, financial
or legal solutions.
This is not appropriate to the Frampton Park
scheme as it is not a complicated scheme and the design updates and
value engineering will be covered within the Pre Construction
Services Agreement.
 
? Competitive Procedure with Negotiation: Any
supplier may submit a request to participate by providing the
information for qualitative selection. Following assessment,
invited suppliers may submit an initial tender which shall be the
basis for the subsequent negotiations. The Council will negotiate
with tenderers the initial and all subsequent tenders submitted by
them, except for the final 11 tender, to improve their content.
This can be a time-consuming process and it is not considered
necessary for the Frampton Park scheme.
 
5.35. The option to not appoint a reserve
bidder has been considered and rejected, as having a reserve bidder
enables the Council to retain some competitive tension with the
preferred bidder; and, provides a procurement-compliant alternative
to the preferred bidder in the event that the design/price is not
in line with the Council’s budget and expectations for the
project.