Agenda item

The Cabinet Member for Council House building, Placemaking, and Local Economy noted concerns about a significant budget increase and delays in the project. However, acknowledged that taking no action could lead to further delays and risk withdrawal of funding from GLA and Historic England, who have partially funded the scheme.

The Cabinet Member for Council House building, Placemaking, and Local

Economy RESOLVED:

1.  To approve a variation of construction works contract (No. 3) to Lilstone Limited (The Contractor) pursuant to Contract Standing Order (CSO) 3.01(d) and CSO 10.02.1(b), as detailed in Part B section 3.

2. To approve a client contingency which will be strictly managed under change control governance arrangements. Refer to Part B section 3 for the contingency value and total award value.

3. To approve an increase in total project budget of £0.493m.

4. To vire £0.493m from the Tottenham High Road Strategy budget to the Tottenham Heritage Action Zone budget where this scheme sits.

Reasons for decision

The council is currently in contract with Lilstone Limited. There is a requirement

under the terms of the contract to pay the contractor for delays to the general

progress of work caused by events beyond their control. Additionally, as noted in section 6 of this report unforeseen works below ground and additional works

required to meet Network Rail technical approvals have contributed to the required variation set out in Part B section 3 of this report.

This variation comes at an extremely late stage in the construction programme

and the project is expected to complete in March 2024. Non completion of the

project could lead to the risk of funding being withdrawn from the Greater London Authority (GLA) & Historic England who have partly funded the refurbishment works at BGPC. The council has grant agreements in place with both funders which cover this scheme.

Alternative options considered

Do nothing

1. Contractual Liability as detailed in 4.1 of this report.

2. This will lead to further project delays and risk of withdrawal of funding by the GLA and Historic England who have partially funded the scheme.

3. This would provide the Council with a partially complete building which would be deemed unsafe, unrentable/unusable space in its current state. Works commenced on site in January 2022 and are projected to complete by 21st March 2024. It is acknowledged that the contract duration has 4 weeks remaining before achieving practical completion.

4. This could further expose the council to a loss of profit claim and or payment of goods which have been procured but perhaps not yet installed.

In-house Delivery

1.    There is currently no resource within the council that has the capacity, specialist expertise or qualifications to deliver this service and Lilstone Limited are the incumbent contractor delivering this scheme.

2.    The remaining works could be procured via an alternative contractor, but this would delay completion and impact on grant funding required to be committed by the end of March 2024. Therefore, based on time and cost of re-procurement it is not considered this would represent value for money for the council.

Alternative Procurement Route

1. The remaining works could be procured via an alternative contractor. This would delay completion and impact on grant funding required which is to be spent by the end of March 2024. Entitlement to inflation, L&E and loss of profit would remain. Incomplete testing and commissioning of systems installed, time and cost of re-procurement this option is not considered to represent best value for the council.

2. Moving remaining works to the incoming tenant - consideration needs to give to the contractual obligations noted in section 4 of this report. Additionally incomplete testing and commissioning of systems installed. Whilst considering these risks, the Council could explore the possibility of letting the facility on the basis of including within the agreement completion of all remaining construction works. Aside from the building potentially being in an unsafe state at the point of suspending the current contract, entitlement to inflation, L&E and loss of profit as noted would remain and this basis is not recommended for consideration.