Agenda item

The Cabinet Member for Children, Schools, and Families considered the report which noted that, on 15^th June 2021, the Cabinet Member approved an award to Mulalley & Company Ltd for Seven Sisters Primary School Phase 1 in the sum of £1,233,949.00. This contract award was varied on 17^th January 2022 to £1,366,875.00 by the Cabinet Member. On 9^th November 2021, the Cabinet Member approved an award to Mulalley & Company Ltd for Seven Sisters Primary School Phase 2 in the sum of £1,264,690.60.

This report sought approval to vary both contracts to Mulalley & Company Ltd as allowed under Contract Standing Order (CSO) 10.2.1.b and (CSO) 16.02.

The additional works 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 Cabinet Member asked about the timescale for the project. The Project Manager noted that some works to the water supply needed to be undertaken after the school term finished but the completion date was due to be 21 December 2022. The Cabinet Member noted that the additional costs had been generated by additional works including asbestos removal and it was acknowledged that this was necessary. The Cabinet Member commented that issues such as asbestos were not surprising with older buildings and it was suggested that future reports for school works could include this as a likely possibility.

The Cabinet Member RESOLVED

Pursuant to Contract Standing Order 16.02, to vary the following construction contract awards:

(i)            To approve a further variation of the construction contract for Seven Sisters Primary School Phase 1 to Mulalley & Company Ltd in the sum of £263,125.00 giving a varied contract value from £1,366,875.00 to £1,630,000.00.

(ii)          To approve a variation of the construction contract for Seven Sisters Primary School Phase 2 to Mulalley & Company Ltd in the sum of £58,288.00, giving a varied contract value from £1,264,690.40 to £1,322,978.00.

(iii)         To delegate authority to the Director of Children’s Services to approve any subsequent variations which may be required in the settlement of the final account up to £50,000 for each Phase of the project.

Reasons for decision

During construction of Phase 1, additional condition works were identified which included remedial works to address additional pipework, asbestos removal and additional works to aluminium window reveals.

The additional work has led to the contractor requesting further time to accommodate the additional works, some of which may not been fully considered as part of the original variation request for Phase 1.

Phase 2 works experienced additional works to windows roofs and asbestos. As with Phase 1 this has resulted in the contractor requesting further time to accommodate the additional works.

Whilst elements of cost are yet to be fully evidenced and agreed, these variations of contracts are expected to be sufficient to settle the final accounts.

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 and leave the Council unable to fulfil its contractual obligations with regarding to payments to the contractor. Design changes have been agreed via strict change control processes and can be supported by the project budgets. ‘permanent’ heating system.

Returning to the market and delivering under a separate contract was discounted as would not offer best value to the Council due to current climate conditions – construction inflation and material shortages – this would likely result in inflated market rates and cause further disruption to the school. This would also cause further delays as it is unlikely that a new contractor could be procured and commence works before the existing contractor had completed the additional work.