Agenda item

[Report of the Director for Housing, Regeneration and Planning. To be introduced by the Cabinet Member for Climate Change and Sustainability.]

This report seeks approval to award contracts for: DEN technical advisory services to Contractor A for a period of 3 years from 1/11/19 to 31/10/22; and DEN legal advisory services to Contractor 1 for a period of 3 years from 1/11/19 to 31/10/22.

[Cllr Chandwani re-entered the chamber]

The Cabinet Member outlined that the DEN programme was the single largest contribution the Council could make to reducing carbon emissions in Haringey. This procurement of a team of technical, financial, and legal experts would enable the Council to deliver this ambition and would meet the Borough Plan commitment on exploring setting up an energy services company to deliver affordable, low carbon energy over the coming years and this paper makes recommendations for appointments and explains the procurement processes followed.

The Cabinet Member highlighted the scope of work considered here was therefore focussed on Wood Green, Tottenham Hale, Broadwater Farm and the Council’s other housing and regeneration projects many of which would involve decentralised energy networks. If the GLA’s budget expired in 2020, the Council had the option to either vary the new contracts to include the North Tottenham work or to novate the existing North Tottenham contracts from the GLA to the Council.

The Cabinet Member informed this report would allow the Council to agree an initial scope of work and then to instruct follow-on work through the same contract in due course. The scope (and therefore cost) of future work was likely to be determined by work over the next 12-18 months. Once the scope was clarified, a price for the work can be agreed with the consultants before being presented to the Council as part of the decision to proceed and release additional budget.

The Cabinet emphasised this approach would deliver value as it allows:

•        Better rates through aggregating work into a larger contract;

•        More interest from the market in a larger piece of work; and

•        Continuity in advice including lessons learned on one project being applied to another Work to be instructed more quickly with less risk of opportunities being missed due to delay and less internal resource spent re-procuring.

In response to a question from Cllr Connor on why five of the six bidders who engaged with the procurement process declined to bid, it was agreed to provide a written response.

Following consideration of exempt information,

RESOLVED

To approve the implementation of Contract Standing Order 9.07.1c. and award two contracts for:

a)   DEN technical advisory services to Bidder A ,set out in the exempt report for a period of 3 years from 1/11/19 to 31/10/22, with provision for extension for 12-months. The contract allows for work to be instructed incrementally with additional fees determined by the precise scope of work. The contract value over the life of the contract (contract period + extension) is estimated to be up to £1m. The first phase of work which will be instructed has a value of c£270k.

And

b)   DEN legal advisory services to Bidder 1, set out in the exempt report, for a period of 3 years from 1/11/19 to 31/10/22, with provision for extension for 12-months. The contract allows for work to be instructed incrementally with additional fees determined by the precise scope of work. The contract value over the life of the contract (contract period + extension) is estimated to be up to £1m. The first phase of work which will be instructed has a value of c£120k.

Reasons for decision

These appointments contribute directly to delivery of Borough Plan objectives to reduce Haringey’s carbon emissions, to lead on delivery of an energy network within the borough, to explore setting up a local energy company and to develop a plan for Haringey to be Zero Carbon by 2050. They also allow the Council to meet commitments in the Local Development Framework and undertakings within s106 agreements to engage with developers in Wood Green and Tottenham Hale on set-up of DENs.

In each case, the awards are based on an assessment of Most Economically Advantageous Tender (MEAT) as required for contracts of this size. Strategic Procurement confirms the processes set out in the tender documents are suitable and have been followed correctly.

Budget has already been approved (as part of the capital programme) for the first phase of work to be instructed, including an allowance for the accompanying financial advice work packages which will be approved in parallel under Delegated Authority by the Director of Housing, Regeneration & Planning. Future phases of work will follow on only after further decisions to progress the project to the next stage, and will require either confirmation that budget is in place or the seeking of additional budget).

Alternative options considered

Do nothing

This would not deliver a step change in carbon reduction and would not enable the Council to deliver a regional energy savings company as set out in the Borough Plan.

Appoint an in-House Team

This was ruled out as there is a need for specialist knowledge with a limited pool of candidates.  The work also requires a broad skillset and ideally a blend of junior and senior input. This lends itself to a small team of a dozen or so individuals working part-time rather than a small team of in-house staff working more intensively. Outsourcing gives the Council some liability protection through professional indemnity. Also, the external funding streams (such as the GLA’s DEEP Framework and HNDU funding) does not allow for in-house appointments.

Run multiple small procurements on an as and when basis

This would slow down the DEN programme and may not keep pace with linked external projects and funding streams which is likely to see opportunities slip away. And it would be time consuming in terms of officer time. It would not be able to link efficiencies between projects. Therefore it was ruled out.

Use other frameworks to deliver the teams

In terms of the choice of framework, while there are other options, the DEEP framework is preferred. It includes a comprehensive list of firms active in the specialist field of DENs and has the USP that its use allows the GLA to fund some or all of the work. It is a requirement of the GLA’s DEEP funding (which runs to March 2020 and may be renewed for the period 2020-23) that services are procured via the DEEP framework. LBH has received c£340k of funding from the GLA to date and hopes to secure more. It is therefore difficult to look past DEEP as use of this route provides a clear financial benefit to LBH.

This framework (Schedule 6B) is a three-party agreement between the appointed Service Provider, GLA and Haringey, under which the service provider may be paid by either the GLA or Haringey. This allows the Council to take advantage of current GLA funding of £45k and future GLA funding should it become available.