Agenda item

The Cabinet Member for Early Years, Children and Families considered a report which sought approval to further vary the contract with Mulalley & This Company Ltd as allowed under Contract Standing Order (CSO) 10.2.1.b and CSO 16.02 for West Green Primary School, to allow for additional condition works to be completed at the site.

It was noted that on 16 February 2022, the Cabinet Member for Early Years, Children, and Families had also approved a variation of the construction contract for work to Bruce Grove Primary School and this report also sought approval to further vary the contract with Mulalley & Company Ltd as allowed under Contract Standing Order (CSO) 10.2.1.b and CSO 16.02 for Bruce Grove, to allow for additional condition works to be completed at the site.

It was noted that both sets of additional works still provided the Council with greater value for money by including the works within the current contract on site, as opposed to returning with a separate contract, which as a result of the current climate – construction inflation and material shortages - would likely result in inflated market rates and cause further disruption to the schools.

The variation amounts and financial details were itemised within Part B of the report as were considered commercially sensitive.

Information was provided to the Cabinet Member of the nature of the works required.

With regards to West Green Primary School, additional condition works were identified that included further building services works and the complete replacement of the hall roof, as it was in significant disrepair to its main structure. The extent of this condition could not have been identified through non-intrusive surveys and was only discovered once the works commenced and the contractor was able to fully access, open up and intrusively inspect the hall roof structure. There was a need to fund the additional costs of the redesign, build and additional time the contractor had already spent on this project.

In relation to the works at Bruce Grove Primary School, during construction and once full access to the roof was available, additional condition works were identified including replacement of roof tiles and detailing and build-up of insulation. Additional glazing works were identified on site that included unexpected difficulties in accessing windows in some areas. These additional works had now been fully detailed and specified, with access arrangements determined and the relative scope of electrical services works revised to accommodate them. It was necessary to undertake some additional works in areas critical to the operation of the school out of hours. To accommodate these works and the resultant extended construction programme additional funding was required.

The Cabinet Member noted that the Children’s Services Capital Programme Budget was sufficient to cover this contract increase.

It was further noted that, going forward, the Council’s Strategic Asset Management Programme would produce a costed asset management works programme that can inform items like this.

In response to questions from the Cabinet Member, the following information was provided:

With regards to considering the difficulties from recent school build projects and taking this learning forward to forthcoming school build projects, the School’s project team were completing a lessons learnt exercise. This would consider the whole schools programme of capital builds. Meetings have included the technical team. Consideration was being given to completing more intrusive surveys at the start of projects in schools. These could be completed after school hours or on a Saturday to allow identification of issues and ensure the contract amounts and contingency sums agreed were realistic.

The Cabinet Member commented that it was important to keep in mind the overall positive impact on rebuilding school buildings which was increasingly necessary to ensure that children and young people had good facilities and environment to support their learning and development. She suggested the following:

·         Contacting Communications Team to publicise the positive work on updating school buildings. There was a need to celebrate that these works were happening and helping to provide children with the best start in their educational journey.

·         When works were taking place at these schools, to have signs that indicated that the works were funded by Haringey Council with additional funding from the DFE.

Further to considering the exempt information, it was

RESOLVED

That pursuant to Contract Standing Order 16.02 to:

1.    To note that the variation of the original contract award approved by the Cabinet Member for Early Years, Children, and Families for West Green Primary School was in the sum of £2,644,202.90.

2.    To approve a further variation of the construction contract to Mulalley & Company Limited for West Green Primary School as set out in Part B.

3.    To approve a variation to the contingency allowance to be managed under strict change control governance as set out in Part B.

4.    To note that the variation of original contract award approved by the Cabinet Member for Early Years, Children, and Families for Bruce Grove Primary School was in the sum of £3,082,000.

5.    To approve a further variation of the construction contract to Mulalley & Company Limited for Bruce Grove Primary School as set out in Part B.

6.    To approve a variation to the contingency allowance to be managed under strict change control governance as set out in Part B.

Reasons for decision

West Green Primary School - During construction, additional condition works were identified that include further building services works and the complete replacement of the hall roof, as it was in significant disrepair to its main structure. The extent of this condition would not have been identified through non-intrusive surveys and was only discovered once the works commenced and the contractor was able to fully access, open up and intrusively inspect the hall roof structure. These additional roof and associated structural works have now been fully designed and specified. To accommodate these works and the resultant extended construction programme, additional funding is required. The Children’s Services Capital Programme Budget is sufficient to cover this contract increase.

Bruce Grove Primary – During construction and once full access to the roof was available, additional condition works were identified including replacement of roof tiles and detailing and build-up of insulation. Additional glazing works were identified on site that included unexpected difficulties in accessing windows in some areas. These additional works have now been fully detailed and specified, with access arrangements determined and the relative scope of electrical services works revised to accommodate them. It is necessary to undertake some additional works in areas critical to the operation of the school out of hours. To accommodate these works and the resultant extended construction programme additional funding is required. The Children’s Services Capital Programme Budget is sufficient to cover this contract increase.

Going forward, the Council’s Strategic Asset Management Programme will produce a costed asset management works programme that can inform items like this.

Alternative Options Considered

Do nothing – a decision not to support the increase in the value of the construction works contract will result in delays in completing urgent condition works, leave the Council unable to fulfil its contractual obligations (construction contract), a school with a roof at the end of its serviceable life, a school with a roof in need of considerable repair and increase the health and safety risk of closure (in part or full site) and disruption to children’s education.

Re-tender – an option to re-tender or separately tender these was considered. However, this was discounted because existing contracts are in place for both West Green and Bruce Grove with Mulalley & Company Ltd that are circa 55-65% complete. It is believed that variations provide the Council with greater value for money by including them within the current contract works on site, as opposed to returning with a separate contract, causing further disruption to the school. If tendered separately, it is believed due to construction inflation, changes in market rates, reduction in suppliers, material shortages and increase in material costs and the impact of the war in Ukraine, that tenders returned would likely incur substantial cost increases as realised in the market over recent months. It is also believed that these increases would be higher than those being witnessed for the variations. Re-tendering these works would substantially lengthen the programme, not meet the Salix (Public Sector Decarbonisation) Grant spend deadline, see paragraph 6.4 and create further disruption to the school environment into their 2022-23 academic year.