FOI Request - Boat 'O' Brig Refurbishment

Request 101000205957

Under the Moray Council's 'Contract Procurement Policy' it is my understanding that all Local Authority Contracts over £20,000 should go out to open tender in order to receive at least 5 submissions from interested parties.

All contracts over £50,000 should be advertised on a European Portal in order to comply with 'Best Value Tendering'.

It seems that by awarding the Boat 'O' Brig contract to Morrison's Construction they have clearly stepped outside this standard procurement procedure.

Therefore, could you please advise of the reason/legitimacy for doing so.

Notwithstanding the above I would also ask for;

The current estimated final cost of the total works to include the undernoted elements shown separately.

(1) Re-surfacing/Reinstatement Works of the bridge surface.

(2) Preparation/Re-painting works.

(3) Any/All Associated Ground Works.

(4) Any other areas of projected expenditure not identified above.

(5) Details of Morrisons management fee to include all aspects of their contractual responsibilities.

(6) Projected start and completion dates, bearing in mind and according to Council Committee minutes/press reports has already been extended from the initial start date.

Response 13-01-2014

See excerpt from the Minute of Policy and Resources Committee on 4 June 2013:

18. ACCELERATED CAPITAL EXPENDITURE 2013/14 [PARA 8]

Under reference to paragraph 11 of the minute of the Economic Development & Infrastructure Services Committee dated 30 April 2013, there was submitted a report by the Corporate Director (Corporate Services) asking the Committee to approve an amendment to the Capital Plan for 2013/14 to ensure that Capital Grant for accelerated capital expenditure is fully utilised.

Following consideration, the Committee agreed to approve:-

(i) the substitution of the Boat o‟ Brig project, as detailed in Section 4 of the report, to replace the 2 capital projects previously approved for acceleration from 2014/15 into 2013/14; and

(ii) Option 4, as set out in paragraph 5.4 of the report, as the route to procurement and note the risks associated with the procurement of these works.

The Report to Policy and Resources Committee was confidential but the relevant paragraph 5.4 is copied below. Note the ECI refers to Early Contractor Involvement.

5.4   Option 4 - Extension of Flood Scheme Contractor remit (ECI)

This enables an early start because a team is largely in place and financial systems exist for managing costs and ensuring a firm audit trail. There is also an externally audited benchmarking of costs through the “Target Cost Setting Methodology”.  This was approved by the then Chief Financial Officer and has been used on six previous occasions for major flood schemes to ensure value for money. The downside is that while value for money can be established in terms of the original tender, and the contract includes for such extension, the contract was not intended to be used for this type of project. This option would require the consent of the Head of Financial Services. This option was previously used for emergency repairs following the November 2009 flood event to undertake major repairs to Bridge of Isla and replace a bridge over the Fochabers Burn, which provides benchmark costs comparable for this type of work. The time taken to prepare the design and contract documentation, obtain licences and carry out the works on site would take from May 2013 until the end of February 2014. 

It may help the explanation to see the “Financial Implications” section from the report as copied below:-

(c)   Financial implications

The recommendations of the report aim to maximise the use of additional capital grant from the Scottish Government.

The expenditure proposed falls below the EU procurement thresholds. The proposal would normally require open market procurement in terms of the Council’s internal procurement procedures. Para 3.20 of the Council’s Financial Regulations however  allows the Council’s Chief Financial Officer to approve works being sourced from a single supplier where it is clearly demonstrated that this is appropriate.

Notwithstanding the above I would also ask for;

The current estimated final cost of the total works to include the undernoted elements shown separately.

Current Estimated cost = £1,300,000

1. Temporary works – scaffolding and encapsulation of the bridge £191,442, Removal of existing concrete deck - £114,462, Re-cast new reinforced concrete deck - £ 165,132, Resurfacing (including waterproofing) - £33,747

2. £327,605

3. It is unclear what this includes. As this is a bridge there are no works in the ground.

4. £367,662 -covering Morrison staff costs, risk and fee, site compound rent and running costs, traffic management, design cost for the works (design and build contract). There is also a Council; risk allowance of £65,000 and an allowance of £35,000 for Council staff costs as the norm for capital funded projects.

5. The fee percentage is in accordance with the contractor's tender for the Moray Flood Alleviation Schemes contract awarded under EU Procurement Regulations. The figure is commercially confidential but is included in the overall estimate above.

Morrison's "Compensation Event" submission is a contract within a contract. The contract is commercially confidential. In broad terms the contractor is employed under the New Engineering Contract, Engineering Construction Contract, Second Edition, 2001, published by the Institution of Civil Engineers and incorporating X12. The contract relates to the core clauses for Option A, H, R, T, U and Z. The Council cannot provide a copy of this document because it is under copyright. 

An outline is available at http://en.wikipedia.org/wiki/NEC_Engineering_and_Construction_Contract

6. Start Date: 26 August 2013 and Completion Date: 27 April 2014.

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