Decision

RESOLVED to:

1. Approve the commencement of a two stage design and build procurement for Kings Hall Leisure Centre Refurbishment Project through the Southern Construction Framework Lot 3.
2. Delegate authority to the Group Director, Finance, in consultation with the Hackney Kings Hall Leisure Centre Development Board, in respect of the award of a Pre-Construction Services Agreement (PCSA) to the recommended contractor.
3. Authorise the Director of Legal, Democratic and Electoral Services to agree and enter into all necessary legal documentations relating to a Pre-Construction Service Agreement with the recommended contractor.

CPIC is requested to note that:

1. Following a review of the Stage 3 cost plan by the PCSA contractor, a Full Business Case requesting budget approval for the whole project will be brought back to Cabinet for consideration.
2. Subject to Cabinet approving such Full Business Case, the project will proceed by submitting a planning application and continuing to complete the second stage of the procurement process (including the open book market testing of the Stage 4 design with the PCSA contractor’s supply chain).
3. At the completion of the second stage of the procurement process, a report recommending the award of the main design and build contract to the recommended contractor will be brought back to CPIC for consideration and approval.
4. Reasons For Decision
5. 1 The project team undertook Options appraisal workshops to establish the refurbishment options for Kings Hall Leisure Centre following a feasibility study in 2019. Three options were considered.

·  Create no new facilities and undertake basic repair only.

·  A number of mid level investment options that created some new facilities and brought the leisure centre up to current standards.

·  Maximise the opportunity for new facilities whilst bringing the building and it’s facilities up to current standards (preferred design option).

1. 2 As set out in FCR S126, the decision was taken to progress the preferred design option for the KHLC refurbishment project to the planning stage, in order to gain clarity on the cost of the scheme and the investment case for its delivery. A design team was appointed, and Stage 2 design is in the process of being concluded. During this early design stage, the design team has sought to gain a fuller understanding of the constraints of the building, and its existing context, through the procurement of a range of surveys and consultant reports. This has given an insight into the complexities of the scheme, and the need for early contractor engagement to better understand the most efficient and cost effective way to manage the delivery of the scheme and the risks which it presents as an ageing historic building.
2. 3 This initial business case recommends the progression of a two stage design and build procurement process in order to secure early contractor engagement into the design process. This report also describes a two stage business case process, whereby a Full Business Case would be recommended to Cabinet for approval, once our recommended PCSA contractor had had the opportunity to review the Stage 3 design and cost plan.
3. 4 At this juncture, the options considered were thus as follows:

·  Proceed to develop detailed designs for planning/Cabinet Business Case approval without early contractor engagement

·  Proceed to procure early contractor engagement to help inform the design process as soon as possible, and help inform the Full Business Case to be presented to Cabinet (preferred procurement option - timing)

1. 5 In a scheme of this complexity, there is a high risk that any Full Business Case which was developed without early contractor involvement, would not comprehensively consider the best way to deliver the works and would potentially underestimate the true cost and risks associated with its delivery. It is for this reason that the option to progress to secure early contractor involvement ahead of any Full Business Case is recommended in this paper.
2. 6  The procurement routes which were considered are set out below:

·  Option 1 - Find a Tender Service Procurement

·  Option 2 - Framework Procurement (preferred procurement option - route)

1. 7 Preferred Option
2. 8 Following consideration of the procurement routes open to the Council and the drivers of the procurement, a framework procurement approach is the preferred option.
3. 9 Having considered the frameworks which are available to the Council, the Southern Construction Framework (SCF) Lot 3 has been market tested and selected. This is a tried and tested procurement route (now in its fifth generation), with demonstrable market interest in the scheme, and a pool of contractors who have the skills and expertise to deliver a wet leisure scheme of this complexity.
4. 10 The Council project team is also experienced in procuring via this framework, with the Britannia Leisure Centre also procured using this framework. This familiarity and experience brings confidence to both the contractor teams and council team, ensuring that the focus is on securing the right outcomes from the procurement process.
5. 11 It is proposed to weight the evaluation of the first stage of the procurement 70% Quality to 30% Cost, recognising that the driver of selecting a two stage procurement process is to select a partner who is able to work with the Council in the second stage to open book tender a Fixed Price design and build contract sum.
6. 12 It is also proposed that the project uses the Expressions of Interest responses garnered from the Soft Market Testing exercise as the shortlist phase (MC1), and moves straight to the tender phase (MC2). This is an option presented by the framework and familiar to the contractors.

Alternative Options (Considered and Rejected)

1. 14 The project team undertook a procurement workshop to establish the most appropriate route to procuring a contractor, having first understood the requirements for the project and which procurement routes best suited these requirements.
2. 15 The procurement route must allow for contractors with experience of wet leisure and working on listed buildings. Due to the complexity of the site constraints, and retention of existing historic features, the project team also felt it was important to procure a two-stage design and build contract, to allow the contractor early design sight and for them to bring their delivery experience into the design. This also allows a contractor to provide some early market feedback on the construction costs.
3. 16 Given the specialist experience required for the project, a framework route provides the ability to tap into a pre-selected pool of contractors. The Find a Tender Service arguably provides a perceived wider pool of contractors, but in reality, specialist contractors prefer to operate via known framework contracts, where the costs and risks of bidding are known and clear at the outset. They have a tendered and prequalified competitor pool, with competitors of a similar nature and size. As such, the focus of the procurement review was to consider which frameworks offered a pool of specialist contractors, and the ease of procuring via pre-tendered frameworks.
4. 17 The following frameworks were reviewed:

·  Crown Commercial Service (Lot 4)

·  LHC (London and South East)

·  Pagabo (South East, Lot 3)

·  Procure Partnerships Framework (London)

·  Scape Major

·  Southern Construction Framework (Lot 3) - recommended