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RESOLVED:
 
1.That Cabinet Procurement &
Insourcing Committee (CPIC) approves the selection of the preferred
contractor (Contractor B), as noted in the Exempt Appendix A, and
the issue of the Scape ‘Project Request’ form to
Contractor B to carry out the Feasibility Study to develop the new
teaching pool and ancillary facilities at London Fields
Lido.
 
2 Subject to the satisfactory completion
of the Feasibility Study, that CPIC agrees to delegate the approval
to enter into a ‘Pre-Construction Services Agreement’
with Contractor B referenced in paragraph 5.15, to the Group
Director, Climate, Homes & Economy Directorate in consultation
with the Group Director of Finance and Corporate
Resources.
 
3. That CPIC agrees to delegate the
approval of the Contract Award for the appointment for the main
works (subject to agreement being reached with the Contractor B on
price and supporting information for the building contract) to the
Group Director, Climate, Homes & Economy Directorate in
consultation with the Group Director of Finance and Corporate
Resources.
 
4. Subject to the award of contract in
paragraphs 3.1 and 3.3 above, that CPIC agrees to authorise the
Director, Legal, Democratic and Electoral Services to agree and
enter into all necessary legal documentation in relation
thereto.

 
Reasons For Decision
 
1. The Council has long recognised the
impact that sport and physical activity
can have on the achievement of its vision
/ priorities and, in recent years, has
made improvements to both the quality and
operation of its sport and leisure
facilities. However, we are now at a
watershed in terms of having to make
some decisions about how the facilities
will continue to meet the demands and expectations of the
community, within the context of a changing population and reducing
resources.
2. The future of the Council’s
Sport and Leisure provision has been re-evaluated over recent
years, given the expected changing population, increasing customer
expectations and age and condition of the leisure buildings. The
review process adopted an integrated approach towards the
Council’s leisure facilities that sought to:
 
? Improve the quality of provision to
ensure it continues to meet the
demands and expectations of the
community;
? Remove barriers, improve access and
increase participation;
? Improve the financial and environmental
sustainability of provision; and
? Identify opportunities to attract
inward investment to fund the new or
improved sport and leisure
provision.
3. This Report relates to the appointment
of a preferred works contractor
following completion of a procurement
exercise using the Scape Framework,
for the development of the new teaching
pool at London Fields Lido.
4. As previously mentioned, in September 2022, a
multi-disciplinary consultant team was appointed to project manage
and design the development of a new
enclosed teaching pool at London Fields
Lido. The new pool will provide a
valuable new facility that can be used by
the whole community throughout the
year and will complement the existing and
extremely popular open air 50m
main Lido. The new facility needs to be
sustainable, both financially and
economically, and reduce carbon
emissions.
5. The Project is logistically
challenging, being built within a live site, as both the Lido and
adjacent Parks’ depot will need to remain in use. The new
pool and associated accommodation will also need to be connected to
the existing
building and will require structural
alterations. Pool projects are inherently
difficult, specialist developments and it
is therefore important to employ a
contractor with suitable experience of
this type of project.
6. The total Project Budget is
£4.5m, with £3.9m of this being the
construction
cost. This is below the Public Contract
Regulations - ‘Public Works’ threshold
of £4,447,447, excluding 20% VAT.
There are no additional revenue costs to
the Council associated with the
development of the new teaching pool and
ancillary facilities, as London Fields
Lido is already included within the leisure
management contract with GLL and any
increase in operational costs will be
offset by the additional income generated
by the new teaching pool.
7. COVID, Brexit, and most recently the war in Ukraine and
the cost of living
crisis, are all having a significant
impact on the construction market, with an
upturn in construction activity
coinciding with a lack of available materials and
resources. This has led to significant
price increases and contractors will
therefore prioritise well run, low risk
projects, with a high probability of them
going ahead.
8. A potential recession may slow down
construction activity, however this is only likely to see a
levelling of the market, rather than a wholescale reduction in prices, and it will
inevitably put contractors under financial strain. It will
be
important, therefore, to select a
contractor that is both experienced in the
delivery of wet leisure facilities and
financially stable.
9. As reported to HPB, the original
preferred route for the procurement of a works contractor for the
London Fields Lido teaching pool was to appoint the
contractor through a single stage design
and build procurement utilising an
established framework such as
Constructionline. However, the final
decision
would depend on the available frameworks,
and the appetite of the contractors
for this project and a single stage
design and build procurement route. To
confirm the procurement route, soft
market testing of this approach was carried out to assess the level
of interest and experience of the contractors
available i.e. good leisure and swimming
pool experience.
10. The results of the soft market
testing confirmed that:
 
? There was no appetite for a single
stage procurement route from
contractors with suitable leisure/pool
experience;
? The contractors approached are still
busy with a good pipeline of
opportunities and are only interested in
a two-stage procurement route;
? The project is too small for some of
the contractors; and
? Without being prompted, interested
contractors suggested the use of an
established framework and subsequently
confirmed their interest in
bidding through the Scape
Framework.
11. A ‘Two Stage Develop and
Construct’ procurement route was therefore chosen for the
project, with the Building Contract being procured through the
Scape Framework (England and Wales, £0-£7.5m), which
fully complies with
Regulation 28 of the Public Contracts
(England, Wales and Northern Ireland)
Regulations 2015.
12. Two contractors were appointed to
this Framework. Tenders were requested from both contractors who
were also invited to a Post Tender Presentation Meeting. The
tenders were assessed on a quality only basis, following assessment
of both their tender documents and their post tender presentation
(see Exempt Appendix A for details of the Scape Framework
contractors).
13. The Contractors on the Framework were
provided with as much information
about the project as possible and posed
3-4 questions, such as team/track
record, methodology/programme, added
value and social value. The contractors prepared a presentation in
response to the questions and presented this to our evaluation
panel. The topics/questions were weighted to help with the scoring
and selection, as per the ITT documents that Procurement issued via
ProContract.
14. This process will allow the selection
of a preferred Contractor to work with the Council’s project
team during the pre-construction phase (Stage 1).
15. Once the Contractor has been
appointed, the Scape ‘Project Request’ form
will be issued to the Contractor to
complete a Feasibility Study, which will
include their view on design, enabling
works, demolition, surveys, utilities,
programme, risk, construction logistics
etc., and will provide a cost estimate
and confirm their pre-construction fees
in line with the Scape Framework
Agreement. Assuming this is satisfactory,
the preferred contractor will be
appointed under a Pre-Construction
Services Agreement (PCSA), to work with
the Council’s project team and
price the works once the design has been
developed in sufficient detail (for this
project it will be at the end of Stage 4).
This will be carried out on an open book
basis where the contractor obtains
3-4 quotes for each package. The agreed Overhead &
Profit and management rates set out in the Framework Agreement are
then added to this and the
quotations for each package will be scrutinised by the cost
consultant (F+G) to ensure the Council achieves best value. This is
broadly the same process that the Council followed for the
development of the new Britannia Leisure Centre, albeit through a
different Framework.
16. The Building / Works Contract will then be entered into
with the preferred
Contractor upon completion of the
pre-construction period, tendering the
sub-contractor packages and agreeing a
fixed contract sum for the works
(Stage 2). There is no obligation to
enter into the Building / Works Contract if
an agreement cannot be reached with the
preferred Contractor during the
pre-construction period.
17. As outlined in recommendations 3.2
and 3.3, delegated approval is being
sought for the reasons outlined
below:
? Once the contractor's Feasibility Study
has been completed and considered satisfactory by the Council's
project team, it's important that the preferred contractor is
appointed under a Pre-Construction Services Agreement (PCSA)
without delay, to work with the Council’s project team to
develop the design in sufficient detail to allow the preferred
contractor to tender their subcontractor packages and agree a fixed
contract sum for the works.
Completion of the contractor’s
Feasibility Study is a very quick exercise,
taking 3 weeks and would normally be done
under a PCSA. However, the
Scape Framework requires this to be two
separate instructions, hence the
need to be able to move quickly and
seamlessly into the PCSA following
the successful completion of the
Feasibility Study.
? Due to the current volatility of
construction costs, the contractor's supply
chain needs to be engaged as soon as
possible, to keep costs low and
ensure the project is delivered within
budget. It's worth noting that the cost
of the teaching pool project has
increased by more than 20% since the
project was approved and funding included
in the Council's capital
programme. Any delay in the reporting and
approval process could result
in further cost increases which could
render the project undeliverable.
 
Alternative Options (Considered and
Rejected)
 
1. Alternative options considered and
rejected for the procurement of the works contractor for the new
teaching pool at London Fields Lido were outlined in the Business
Case report presented to HPB:
 
Options outlined at pages 23 and 24 of
the agenda pack.