Decision

RESOLVED:

Agree to the use of a two-stage design and build contract model with a Pre-Construction Services Agreement (PCSA) via the Public Contract Regulations 2015 Restricted Procedure or Procurement Act 2023 Competitive Flexible Procedure (CFP), for the selection of a main contractor to deliver a mixed housing development of up to 355 new homes on the De Beauvoir  Estate.

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:

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

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 Pre- Construction Services Agreement (PCSA stage).

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 De Beauvoir Estate project

The De Beauvoir Estate project is a mixed tenure housing regeneration that forms part of the Housing Supply Programme. This report outlines the proposed process for procuring a construction contractor to deliver the new housing, re-provided commercial and community floorspace along with associated landscaping and public realm works.

The De Beauvoir New Homes projects are located on 12 infill sites across the estate, comprising 6 sites in DB1 and a further 6 sites in DB2. The estate is located to the north of the Regent’s Canal and south of Downham Road, bordering the London Borough of Islington to the west and the De Beauvoir Conservation Area to the north and east. Constructed in the 1960s, the estate comprises five towers, a number of 4-7 storey deck access blocks and 2-storey terraced houses.

The project emerged in two separate packages, with design work starting on DB1 in 2018 and on DB2 in 2020, following acquisition of a piece of privately owned land. DB1 secured full planning in July 2022 (Ref 2021/1906) for 189 new homes. The DB2 planning application will be submitted in summer 2024.

A comprehensive scheme review and redesign was conducted in 2022-2023 on both phases to improve the financial viability, risk profile and deliverability of the scheme as they were disrupted by Covid and further impacted by cost inflation and regulatory changes. DB2 is now developed to RIBA Stage 3 and will deliver around 145 new homes including through demolition of the small obsolete residential and retail building known as Trinity Court. A successful resident ballot was carried out on Trinity Court in 2020.

Further design development will take place during the Pre-Construction Services Agreement (PCSA) stage with the benefit of contractor buildability, technical and supply chain input, to arrive at a final detailed design for construction.

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 outsourcing route is recommended because the Council does not have the capability to carry out major capital construction works in-house.

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. The Council’s established Sales and Marketing Team shall market and sell the shared ownership and outright sales homes under the ‘Hackney Sales’ brand, following the established sales policy including first dibs for local buyers.

1. policy including first dibs for local buyers.

Alternative Options ( Considered and Rejected)

1. The Council’s preferred option is to appoint a contractor via a PCSA and a JCT 2016 Design and Build contract, with Hackney amendments. A number of alternative procurement routes have been considered to achieve these requirements. The matrix of time, risk and cost has been used to consider each method.

1. A single stage approach can produce a number of benefits, but also carries a number of inherent risks. It would enable the Council to obtain an early contractual commitment on price, but should it become necessary to make any changes to the brief post-tender this can undermine the original price. The single stage approach provides the potential for a clear risk allocation between the client and contractor, but this may be undermined if the contractor’s assessment of cost, programme or working method is initially incorrect. The single stage approach provides the opportunity for the Council to set a clear timetable, but the need to clarify proposals, which is often required, can extend the intended timescale which is a risk to the funding of the project as it has a bound commitment with the GLA to start on site by March 2026. In addition, receipt of tenders above budget could delay the project as redesign and re-pricing must be completed before the contract sum is agreed.

3  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 requirements.