Content

Salford City Council – Record of
Decision
 
I Paul Dennett, City
Mayor, in exercise of the powers
contained within the Council Constitution do hereby approve:
 
·     
an exception to Contractual Standing Orders as
permitted within the City Council Constitution for the reason(s)
highlighted in the table below and the award of the Contract for
construction works for the Chapel Street East (Phase 1) and New
Bailey Gateway (Phase 2) project, as detailed in the table
below:
 

Detail required

Answers

 

 

Title/Description of Contracted
Service/Supply/Project

Chapel Street East (Phase 1) and New Bailey Gateway
(phase 2) project.

Procurement Reference Number (DN and
CR, supplied by Procurement)

 

Name of Successful
Contractor

AE Yates

Supplier Registration Number

(to be supplied by
Procurement)

00415632

Proclass Classification No.

(to be completed by
procurement)

 

Type of organisation

(to be supplied by
Procurement)

Private Limited Company

Status of Organisation

(to be supplied by  Procurement)

Non-SME

Contract Value (£)

           
 

Total Contract Value including extensions
(£)

£4,255,583.98

Contract Duration

48 Weeks

Contract Start Date

22/04/2025

Contract End Date

12/02/2026

Optional Extension Period 1

n/a

Optional Extension Period 2

n/a

Who will approve each Extension
Period?

Choose an item.

Contact Officer (Name &
number)

Lee Evans

Lead Service Group

Place

Reason for CSO Exception: The goods / services /
works are only obtainable from one provider and there is no other
provider available to allow genuine competition

Tick if it applies ?

Reason for CSO Exception: The execution of works or
the supply of goods or services is controlled by a statutory
body

Tick if it applies ?

Reason for CSO Exception: Delivers Best Value to the
Council

Tick if it applies ?

Reason for CSO Exception: Special education, health
or social care contracts, if it is considered in the
Council’s best interests and to meet the
Council’s obligations under relevant legislation

Tick if it applies ?

Reason for CSO Exception: The execution of works or
the supply of goods and services is required so urgently as not to
permit compliance with the requirements of competition

Tick if it applies ?

Reason for CSO Exception: Security works where the
publication of documents or details in the tendering process could
prejudice the security of SCC and Salford residents

Tick if it applies ?

 
The reasons are:
Following
withdrawal of the previously appointed contractor on 4 December
2024. An alternative contractor is urgently required to work with
the City Council to deliver the Chapel
Street East (Phase 1) and New Bailey Gateway (phase 2) project. A
direct award to AE Yates is the only viable option to
deliver the commitments made on the project within the specified
timescales in 2025/26 which are not able to be extended due to
funding deadlines and coordination with planned neighbouring
highway works.
 
Options considered and rejected were:
Full
Retender – This option was rejected due to:

1. 
The length of time required to undertake a third
full procurement exercise would extend the delivery timescales
beyond the window of opportunity for delivering the scheme
resulting in high risk to deliverability and risk of grant funding
clawback.

2. 
The STAR 2021/25 Highway Services Framework lot 7
used previously has expired, alternative frameworks have been
investigated but accessing these would require amendments to the
contract documents for which the time implications are considerable
and would not fit with delivery timescales as per point 1
above.
 
Assessment of risk:
High: Any significant delay to
appointing a contractor and  subsequent
contract award increases deliverability and funding risk to the
Council.
 
The source of funding is:
The total
value of the contract with AE Yates is £4,255,583.98. There
are additional project costs associated with
project management, remaining pre implementation (development)
work, delivery costs outside of the main contract, post opening
costs including monitoring and evaluation and an allowance for QRA
and contingency. The project is being funded from various sources
of grant and developer contributions. The detail of the costs and
funding sources are included within the part 2 report (Approval for
an Exception to Contractual Standing Orders to award a contract for
construction works for the Chapel Street East (Phase 1) and New
Bailey Gateway (Phase 2) project).
 
Legal advice obtained:
Supplied by Tony Hatton, Solicitor Group Leader, Commercial
Legal and Democratic Services:
When
commissioning contracts for the procurement of goods, services or
the execution of works, the Council must comply with the
requirements of the Public Contract regulations 2015 (PCR) and its
own Contractual Standing Orders (CSO’s) failing which the
decision may be subject to legal challenge from an aggrieved
provider. The risk of any such challenge naturally increases in
tandem with the scope of services, value of the contract and/ or
proposed length of a contract, and the number of potential
providers of the service.

 

The report seeks approval for the direct
award of the contract for the Chapel Street East and New Bailey
Gateway Project to AE Yates. Whilst he total value of the works is
above the threshold for procuring works, sole sourcing and/or
direct award of a contract may be made in limited circumstances, as
provided for in regulation 32 of the PCR (negotiated procedure
without prior publication of notice). The relevant grounds in Reg
32 are as follows:

 

“(b)…where the works,
supplies or services can be supplied only by a particular economic
operator for any of the following reasons:-

(ii) competition is absent for technical
reasons, 

(iii) the protection of exclusive
rights…. 

but only….where no reasonable
alternative or substitute exists and the absence of competition is
not the result of an artificial narrowing down of the parameters of
the procurement; or

 

(c)
insofar as is strictly necessary where, for reasons of extreme
urgency brought about by events unforeseeable by the contracting
authority, the time limits for the open or restricted procedures or
competitive procedures with negotiation cannot be complied
with.

 

A standalone open advertised tender
process or a call off from a compliant framework agreement (where
entitled to call off as a named user) would more easily satisfy the
requirements of the public procurement rules and minimise and
mitigate the risk of any challenge by suppliers who believe have
not been given an opportunity.

 

As mentioned above, in terms of a direct
award to one particular supplier and sole sourcing there are grounds under
the PCR 2015 allowing for such in certain circumstances, a
negotiated procedure without prior publication of a notice, which
allows a contracting authority to negotiate a contract with one or
more suppliers.

 

In view of
the circumstances surrounding the tender and contract award
processes involved with this project, namely having received only
two submissions for project delivery and one subsequently
withdrawing from the process, the most relevant and applicable
ground to use in these circumstances would be Reg 32(2)(a) of the
PCR 2015, negotiated procedure without a notice may be used
where no suitable tenders, no suitable tenders, no requests to
participate …. have been submitted in an open or restricted
procedure process (provided the initial conditions of contract
are not substantially altered).

 
Also, Regulation 32(2)(c) of the PCR allows for award
without prior for reasons of extreme urgency brought about by
events unforeseeable by the Council and where there isn't time to
run the usual competition process(c)  insofar as is strictly necessary
where, for reasons of extreme urgency brought about by events
unforeseeable by the contracting authority, the time limits for the
open or restricted procedures or competitive procedures with
negotiation cannot be complied with; and… the circumstances invoked to justify
extreme urgency must not in any event be attributable to the
contracting authority.
 
If
relying on the urgency exemption, the Council would need to be able
to demonstrate that:

1) 
There are genuine reasons for extreme urgency,
e.g.: 

?  
Grant Funding timescales to ensure the project
proceeds.

?  
The Council is reacting to a current situation that
is a genuine emergency - not planning for one.

2) 
The events that have led to the need for extreme
urgency were unforeseeable, e.g.:

?  
the original contractor withdrawing from the process
at extremely short notice and was not something which the Council
should have predicted.

3) 
It is impossible to comply with the usual timescales
in the PCRs, e.g.:

?  
there is no time to run an accelerated procurement
under the open or restricted procedures or competitive procedures
with negotiation;

?  
there is no time to place a call off contract under
an existing commercial agreement using a framework.

4) 
The situation is not attributable to the contracting
authority, e.g.:

?  
The Council has not done anything to cause or
contribute to the need for extreme urgency.
 
The
Council is also under a best value duty to carry out its functions
economically, efficiently and effectively with the objective to
achieve value for money in all public procurement. The Council has
considered the circumstances in this matter and concluded that the
recommendation to award the contract to AE Yates is considered to
be of least risk and of most benefit to the Council, and the
Council has genuine, legitimate reasons for the direct award of the
contract.
 
Where
necessary, it is important that the Council complies with the terms
of the Growth Deal 2, Mayor’s Challenge Fund and Active
Travel Fund grant funding agreements with TfGM (in particular
ensuring that the fund is only used for eligible expenditure) and
any timescales around expenditure and reporting are adhered to,
otherwise the Council may be at risk of TfGM seeking clawback of
the funding for failure to comply.
 
Some of
the funding may also come from s106 monies as well as grant
funding, and so any expenditure must be in accordance with the
terms of the relevant planning obligations or risk a claim back of
contributions for failure to comply.
 
As the
value of the contract exceeds £1 million, approval for the
award should be made be by the City Mayor acting on the
recommendation of the Procurement Board.
 
Financial advice obtained:
Supplied by Daniel Hillman,
Senior Accountant:
The total
value of the contract with AE Yates is £4,255,583.98. There
are additional project costs associated with
project management, remaining pre implementation (development),
delivery costs outside of the main contract, post opening costs and
an allowance for QRA and contingency.
 
The
project is being funded from various sources of grant and developer
contributions. The detail of the costs and funding sources are
included within the part 2 report (Approval for an Exception to
Contractual Standing Orders to award a contract for construction
works for the Chapel Street East (Phase 1) and New Bailey Gateway
(phase 2) project).
 
Procurement advice obtained
Supplied by Heather Stanton, Category Manager, SCC
Procurement
Having
gone out to tender for this project with 2 submissions (one of
which was excluded because it was a very late bid) and consequently
awarded to Eric Wright who decided to withdraw. We have approached
the 2nd bidder AE Yates once again as they were the only other
bidder for this contract. The other 2 contractors on the framework
had declined to bid. There are complications with regards the
funding streams being available should we go out to tender again
and I have been made aware of another project which needs to be
completed following this one hence why we have gone down the
exception route.
 
HR advice obtained: N/A
 
Climate change implications obtained:
Supplied by Lee Evans, Group Leader Sustainable Travel in
consultation with Michael Hemingway, Principal Officer Climate
Change:
The
schemes and the development of the Bee Network in city centre
Salford will support mode shift from private car to walking and
cycling. One of the objectives of the schemes is supporting walking
and cycling and greater public transport use. More sustainable
travel choices will help to reduce transport related emissions. As
part of the quality assessment, tenderers were asked to provide
details of how the environmental impacts will be managed and
monitored on this contract.
 
Documents used
The following documents have
been used to assist the decision process:
·     
Part 1: Open to the public: Approval for an
Exception to Contractual Standing Orders to award a contract for
construction works for the Chapel Street East (Phase 1) and New
Bailey Gateway (Phase 2) project.
 
The relevant documents contain
exempt or confidential information and are not available for public
inspection:
·     
Part 2: Closed to the public: Approval for an Exception to
Contractual Standing Orders to award a contract for construction
works for the Chapel Street East (Phase 1) and New Bailey Gateway
(Phase 2) project.
 
Contact details:
Contact Officer:  Lee
Evans          
Email: lee.evans@salford.gov.uk
 
Please delete from the bullets
below any which are not relevant:
·     
The Lead Member for Planning, Transport and
Sustainable Development has been consulted and is supportive of the
proposed contract.
·     
The appropriate Scrutiny Committee to call-in the
decision is the Growth & Prosperity Scrutiny Panel.
 
 

Signed:    Paul
Dennett       Dated:    10 February 2025.
           
       City
Mayor
 

FOR DEMOCRATIC SERVICES USE ONLY:
 

This decision was published on
11 February 2025
This decision will come in force
at 4pm on 18 February 2025
unless it is called-in in accordance with the Decision Making
Process Rules.