Issue - meetings

Report of the Director of Finance. Cabinet Member for Finance and Local Investment.

The report seeks approval to commence procurements to establish a portfolio of pan-London Frameworks and Dynamic Marketplaces via the London Construction Programme.

The Cabinet Member for Finance and Local Investment introduced the report which sought approval to proceed in the LCP establishing a new suite of contract vehicles to replace the expiring ones listed in the attached report. The Councils’ Contract Standing Order 7.04 (a) required Cabinet approval where the Council was intending to lead on any joint procurement activity that was likely to involve a key decision.

The proposed new suite of frameworks would cover the following categories of: Housing, Education and Major works.

The Cabinet Member further highlighted the purpose of the LCP was to establish collaborative contract vehicles in the contract construction sector, such as frameworks and dynamic purchasing systems. the benefits of this proposed decision which were as follows:

• Increased revenue of £1.35m
• 90% of contracts went to small or medium sized businesses
• Achieved several awards
• Assisted Council with capital programme and achieving Council priorities
• Facilitated embedding social value into contracts
• Has requirements for the use of local labour and apprentices, including hard to employ groups, payment of the London Living wage, enhanced modern slavery checks and mental health awareness and staff well-being policies.
• Enables refresh of contract vehicles and would introduce new dynamic models in 2024.

In response to questions from Cllr das Neves and Cllr Cawley- Harrison the following was noted.

-      There was recognition of some issues in the construction sector and as part of the consultation process, the procurement team spoke to both the supply chain and internal and external stakeholders and members on best how to address this. It was noted that, as a way forward, frameworks will now commence at £5m, whereas previously they commenced at £1m and this had created a bit of pressure and capacity issues within that process. It was explained that the benefit of making this change was that contracts below £5m would predominantly be run through the dynamic marketplace which is geared towards specifically supporting SMEs so that they can effectively bid for contracts. This process would also facilitate them to understand their own capability and capacity within that sector and therefore mitigate against situations where they are overstretching in their contract bids to provide services and projects. In addition, there would be ongoing checks across the entire supply chain and monthly monitoring.

-      The sensitivity projections set out at section 4.7 were based upon the contract values that revenue can be generated from. It was explained that the revenue was generated by applying a levy and that levy was based upon the contract value. Therefore, consideration to how the contract can generate revenue based upon previous projections and performance was very carefully and stringently considered. There would have to be an unpredicted catastrophic failure of the LCP not to make profit effectively in terms of the contracts going forward.

RESOLVED

In accordance with Contract Standing Order 7.04 (a):

1. To approve the replacement of the existing LCP pan - London Major Works Framework with frameworks in housing, education and major works categories;

2. To approve the establishment  ...  view the full minutes text for item 13