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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:
 
4. 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.
 
5. 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).
 
6. 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.
 
5. 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).
 
5.2 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.
 
5.3 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.
 
5.4 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)
 
5.5 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.
 
5.6  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)
 
5.7 Preferred Option
 
5.8 Following consideration of the procurement routes open
to the Council and the drivers of the procurement, a framework
procurement approach is the preferred option.
 
5.9 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.
 
5.10 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.
 
5.12 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)
5.14 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.
 
5.15 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.
 
5.16 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.
 
5.17 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