{meta} Decision - Approval for an Exception to Contractual Standing Orders to enable One Heritage Tower Limited to award a contract for public realm works on Council owned land adjacent New Bridge Street, Greengate

Decision details

Decision status: Recommendations Approved

Is Key decision?: No

Is subject to call in?: Yes

Decision:

Salford City Council - Record of Decision

 

I Councillor Hinds, Lead Member for Finance and Support Services and chairman of the Procurement Board, 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 public realm works on Council owned land adjacent New Bridge Street, Greengate, Salford as detailed in the table below:

 

Detail required

Answers

Title/Description of Contracted Service/Supply/Project

Public realm works to provide improved riverside walkway on Council owned land as an element of the works contract for delivery of One Heritage Tower residential development.

Name of Successful Contractor

Midgard Limited

Supplier Registration Number

(to be supplied by Corporate Procurement)

05718686

Type of organisation

(to be supplied by Corporate Procurement)

Private Limited Company

Status of Organisation

(to be supplied by Corporate Procurement)

SME

Contract Value (£)

c.£364,000 project element

Contract Duration

Works programmed at end of 4-year build programme.

Contract Start Date

01/12/2022

Contract End Date

01/11/2026

Optional Extension Period 1

Optional Extension Period 2

Who will approve each Extension Period?

Choose an item.

Contact Officer (Name & number)

Lead Service Group

Choose an item.

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

Reason for CSO Exception: Procurements made through, or on behalf of, any consortium, local authority, statutory or similar body, provided that tenders or quotations are invited and contracts placed in accordance with national or EU legislation.

Tick if it applies

Funding Source

Choose an item.

Ethical Contractor (EC): Mayor’s Employment Charter

 

EC: Committed to sign up to the Charter

EC: Accredited Living Wage Employer

 

The reasons are

·         One Heritage Tower Limited are developing the land in their ownership under an approved residential planning consent (subject to completion of a Section 106 Agreement), to include improvements to the walkway land fronting the river required as a planning condition, which they are going to lease from the Council.

·         One Heritage Tower Limited will be appointing a contractor to develop this area with the inclusion of the walkway land. The walkway works, at a cost estimated at £364,000, will be included in one works package as part of One Heritage Tower Limited’s tender process to appoint a contractor.

·         An exception to CSO’s for works to the walkway land will offer value for money for the Council as the developer will be undertaking the public realm works at its own expense and by undertaking a tender process for the full scheme with the walkway works included the developer will secure economies of scale and only be dealing with one contractor. 

 

Options considered and rejected were

 

To complete the land transaction without an explicit obligation on the developer to complete the public realm works.

 

Assessment of risk

Low. The works will be undertaken at One Heritage Tower Limited’s cost under a building licence and Agreement for Lease. The works will not be commenced until a Section 106 Agreement has been completed and the lease will only be granted on delivery of the public realm works to an agreed timescale and specification.

 

The source of funding is

Works to be funded by the developer, One Heritage Tower Limited.

 

Legal advice obtained

 

Supplied by Tony Hatton, Shared Legal Service

 

Ordinarily when commissioning contracts for the procurement of goods, services or the execution of works the Council as a ‘contracting authority’ must comply with the Public Contracts Regulations 2015 (PCR) as well as the provisions of its own Contractual Standing Orders (CSO’s), Financial Regulations and the duties of Best and Social value. In addition, the PCR require that contracting authorities treat candidates equally and in a non-discriminatory way and act in a transparent manner, failing which the award of a contract may be subject to legal challenge.

 

In exceptional circumstances the Council may dispense with strict compliance of its CSO’s, and the report sets out the reasons for the request for the exception, in accordance with paragraph 3.1 of CSO’s. Whilst exceptions may be authorised by an approval from the Procurement Board, there is still a risk of challenge from aggrieved providers if the usual tender process has not been followed on the basis that it ought to have been advertised and put out to competition.

 

The risk of challenge increases with the value and duration of a proposed contract being awarded. The report sets out the reasons for the need to enter this contract, the benefits and value to the Council, and also states the reasons for the request for exception, such as offering value for money as the developer will be undertaking the public realm works at its own expense and by undertaking a tender process for the full scheme, and with the walkway works included the developer will secure economies of scale and only be dealing with one contractor..

 

Whilst the value of the works in the report are below threshold the PCR require that contracting authorities treat candidates equally and in a non-discriminatory way and act in a transparent manner, failing which the award of a contract may be subject to legal challenge.

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 permit the developer to award the contract as part of the whole works package to be of least risk and of most benefit to the Council.

 

Financial advice obtained

Supplied by: David R Mills – Interim Strategic Finance Manager

There is a premium payment on commencement of a 999-year lease term with respect to this land, and the developer will be undertaking the public realm works at their expense.

 

Procurement advice obtained

Supplied by: Deborah Derbyshire x 6244

As with any exception there is always the risk of challenge but in this case the risk is relatively low.  As the walkway is owned by the Council and will be leased to the developer on completion of works, with rights reserved to the Council for public access to the walkway, it makes sense for the developer to include the walkway within the full scheme of works by appointing one contractor through their own procurement process which will ensure that SCC obtain value for money.  By approval of the exception from the Procurement Board the report will therefore comply with the contractual standing orders.

 

HR advice obtained N/A

 

Climate change implications obtained

Considered as part of the earlier report to Property & Regeneration Briefing approving lease terms.


 

Documents used

The following documents have been used to assist the decision process.

 

(if the documents disclose exempt or confidential information, they should not be listed, but the following wording shall be inserted: "(The relevant documents contain exempt or confidential information and are not available for public inspection)”: -

Contact details

Contact Officer:        John Nugent, Property Services

Telephone number: 0161 779 6072

 

Please delete from the bullets below any which are not relevant

 

·         This matter is not subject to consideration by another Lead Member.

·         The appropriate Scrutiny Committee to call-in the decision is the Growth & Prosperity

 

Signed:         Cllr Bill Hinds           Dated:       14 September 2022.

                        Lead Member

 

FOR DEMOCRATIC SERVICES USE ONLY

 

*           This decision was published on 14 September 2022

*           This decision will come in force at 4.00 p.m. on 22 September 2022             unless it is called-in in accordance with the Decision Making Process Rules.

 

Publication date: 14/09/2022

Date of decision: 14/09/2022

Decided at meeting: 14/09/2022 - Procurement Board

Effective from: 23/09/2022

Accompanying Documents: