Purpose

This report is seeking approval of the
procurement strategy and authority to procure and award a contract,
to a contractor through a two-stage procurement process utilising a
Pre-Construction Services Agreement for design and enabling works
with the option to accept a bid from the contractor for the
construction works under NEC4 Engineering and Construction Contract
subject to further governance and budget. The report also seeks to
inform members of the land acquisition strategy for the land
required to construct Hereford Western Bypass Phase 1.

Decision

That:
 
a) Cabinet agrees the procurement strategy as
detailed in Appendix 1
 
b) Cabinet agrees the proposed strategy for
the acquisition of land associated with the proposal as detailed in
Appendix 2
 
c) Cabinet delegates authority to the
Corporate Director Economy and Environment to undertake a two-stage
procurement process and award of a Pre-Construction Services
Agreement to a contractor through a compliant framework for the
design and early contractor involvement on the project within the
current approved budget.
 
d) Cabinet delegates authority to Commercial
and Investment Manager Property Services to agree the Heads of
Terms and subsequent acquisition of land, within the approved
budget.
 
e) Cabinet delegates authority to the
Corporate Director Economy and Environment to procure and
enter into contracts with any additional
specialist external consultants and advisors required to support
the project with the approved budget.

Alternative options considered

1.    
A design and build contractor could be procured under a NEC4
Engineering and Construction contract which allows for early
contractor engagement through competitive tender approach through
an open tender approach, however this approach would take
significantly longer and as such is unlikely to enable a
construction start until summer 2027. Given current rates of
inflation in the construction industry any delay is likely to
result in higher construction costs. The council is also currently
continuing discussions with key stakeholders, such as Network Rail
and National Highways to finalise approvals; having a construction
contractor in place at an earlier date enables approvals of
temporary works to be discussed in a timely manner so that all
approvals are in place ahead of a decision to proceed to
construction.
 

2.    
The design could be undertaken under existing arrangements with
Aecom or Balfour Beatty Living Places prior to tendering the
construction phase only. This approach would take significantly
longer to deliver as a result of needing to complete all third
party approvals and designs finalised prior to tendering for
construction. Any contractor amendments for buildability or value
engineering, and third-party approvals of temporary works would
have to be done after award of the construction contract resulting
in contractual compensation events and increased costs. This
approach would result in a delay in tendering for the construction
phase which is likely to result in higher construction costs given
rates of inflation. The lack of early contractor engagement in the
process would also reduce the cost certainty as a result of
increased likelihood of changes required during the construction
phase.