Decision Maker:

Outcome:

Is Key Decision?: No

Is Callable In?: Yes

Date of Decision: February 10, 2025

Purpose:

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.