Decision Maker: Cabinet Procurement and Insourcing Committee

Outcome: For Determination

Is Key Decision?: Yes

Is Callable In?: No

Date of Decision: October 6, 2025

Purpose: The procurement of void works for General Building Contract 3  

Content: RESOLVED:   1. To approve the contract award of specialists contractors for Void Works for the Building Maintenance and Regeneration Voids as follows:   a)  Voids Lot 1, Regeneration Voids of a budget value of approximately £1.97m per year, and over the whole contract term, a value of approximately £7.88m (Excl VAT), £9.45M (Incl Vat)    b)  Voids Lot 2, Building Maintenance Voids of a value of approximately £1.85m per year and, over the whole contract term, a value of approximately £7.40m (Excl VAT), £8.88M (Incl VAT)   Reasons For Decision    Following a compliant procurement process under the Public Contracts Regulations 2015, the prevailing procurement legislation at the time of launching the procurement, this report recommends the award of contracts for specialist void works to the two highest scoring bidders for Lot 1 and Lot 2 respectively. These medium-term contract arrangements will replace the previous expired contracts and address the increased demand for void works whilst supporting the in-house service to ensure continuity of service delivery.   The procurement results demonstrate excellent value for money for the Council and will enable the continued delivery of works by specialist contractors, providing essential support to the Direct Labour Organisation (DLO) in completing these tasks. The void works are delivered through a mixed economy approach utilising both the in-house repairs team and external contractors working alongside the DLO. This diversified delivery model has proven highly effective, achieving strong value for money, maintaining competitive tension, providing flexible resources to meet varying workloads, and accessing specialist trades not available within the in-house capacity.   The quality of repair services remains fundamental to Council operations and the enhancement of key performance indicators. Therefore, the Council's commercial team is committed to continuing this successful partnership approach with specialist contractors to support both the void works programme and the DLO's operations.   The compliant tender process has identified two preferred bidders whose proposals offer the best combination of quality, value, and service delivery capability. This report therefore recommends proceeding with contract awards to both successful tenderers.   Approach:   Following the completed procurement strategy utilising a Public Contracts Regulations 2015 above-threshold restricted procedure, comprising a pre-selection (SQ) stage and tender (ITT) stage, the recommendation is to award contracts to the two highest scoring bidders who have met the minimum standards set for the specific quality assessment method statement questions. This approach has demonstrated the greatest value for money for the council.   The procurement utilised a pricing model based on the National Housing Federation's Schedule of Rates version 7.2, which is an industry standard. Tenders were evaluated on the basis of 70% price and 30% quality, ensuring a balanced assessment of cost-effectiveness and service quality.   Benefits of the Approach:   ·  Operational Resilience: The dual contractor approach provides essential backup provision when capacity issues may arise with the internal DLO, ensuring continuity of service delivery.   ·  Enhanced Capacity: Additional resource capacity is now available to support the housing emergency plan when required, providing the council with greater operational flexibility.   ·  Increased Throughput: The ability to process a larger volume of voids through the distribution of work between internal and external resources will improve overall service efficiency.   ·  Workforce Optimisation: The use of external contractors alongside directly employed operatives facilitates the optimal utilisation of directly employed operatives' time. That is, operative numbers can be set at a level to ensure that they will always have sufficient work (their time can always be fully utilised) and external Contractors used to facilitate any surges in demand and / or resource any unforeseen events.   ·  Risk Mitigation: Dividing the contract into two separate lots significantly reduces the risk of service disruption due to supplier failure, providing the council with greater security of supply.   This procurement outcome supports the council's strategic objectives whilst delivering proven value for money through a compliant and competitive process.   Alternative Options Considered and Rejected   Following evaluation of procurement options during the business case stage, the restricted procedure was selected and has now been successfully completed, with the two highest scoring bidders identified for contract award.   Option 1: Open Procedure - This route was considered during the business case stage but rejected due to the potential to receive submissions from over 30 suppliers, creating an unmanageable evaluation burden within the available timeframes. Given that current services operated through single tender actions expiring at year-end, and with General Build Contract 1 in mobilisation phase providing only limited resilience, the extended duration of an open procedure would have compromised service continuity. The regeneration voids single tender action was due to expire at year-end, which would have resulted in no contractor capacity and halted delivery of essential works.   Option 2: In-house Delivery/Insourcing - Utilising the DLO exclusively was considered during the business case but rejected as the DLO lacked capacity to perform works ranging from small to large scale. Deploying the current workforce, which had not expanded within targeted parameters, would have reduced operative availability in other essential trades. The service area review which is planned to be completed in 2025 includes an expansion plan to increase insourcing capacity. The selected procurement approach supports the insourcing strategy by providing external support whilst the DLO grows incrementally.   Option 3: Framework Utilisation - Framework procurement was considered during the business case but rejected as it failed to demonstrate best value for money. The contract value would have incurred framework fees ranging from £187,500 to £312,500 (typically 1.5% to 2.5%), with partnership fees of 2%. The competitive procedure has achieved better rates on the schedule of works without additional percentage fees.   Option 4: Existing Contract Utilisation - Incorporating these works within General Build Contract 2 was considered during the business case but rejected. The size and value would have prevented permissible variation under Regulation 72 of the Public Contracts Regulations 2015. Separate monitoring was also preferable as the projects are managed by different teams.   Option 5: Do Nothing - This option was rejected during the business case as external contractor support was essential. The DLO could not deliver all regeneration voids and required external support for larger building maintenance voids to prevent loss or rental income to the council.   The selected restricted procedure has successfully addressed these constraints whilst ensuring service continuity and delivering the anticipated value for money through the identification of two preferred bidders for contract award