LONDON BOROUGH OF WALTHAM FOREST

Meeting / Date Cabinet 13th November 2012 Report Title Cabinet Portfolio Report Author/ Contact details Repairs & Maintenance Contractor Procurement Finance Property & Resources Vicky Ladizhinskaya Contracts and Service Development Manager Property and Major Projects Environment and Regeneration Directorate Tel. 020 8496 3552 Mobile: 07528 382 848 e-mail: vicky.ladizhinskaya@walthamforest.gov.uk Agenda Item 9

Wards affected Public Access Appendices

All Open A Strategic Procurement Board Report B Minutes of Strategic Procurement Board

1. 1.1

SUMMARY The current contracts for reactive repairs and cyclical inspection and maintenance of the Councils corporate assets come to an end by 31 March 2013. This report seeks Cabinet approval to commence a procurement process for new contracts for provision of both types of services, with the aim of the new contractors to commence work on 1 April 2013 for reactive maintenance contracts (see section 5.1 below) and 1 July 2013 for cyclical maintenance contract (see section 5.2 below), which will be extended under current contracts (due to the more prolonged procurement periods for some of these contracts, which will need to be procured under EU regulations). The purpose of the procurement is to ensure continuity of services and Councils discharge of its statutory Health and Safety duties. RECOMMENDATIONS

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2.

2.1

For the reasons given in this report, Cabinet is recommended to:

2.1.1 Approve the proposed procurement programme for 5 year contracts, with 1 year extension option to provide repairs and maintenance and statutory cyclical inspections to the Councils property assets as set out in paragraphs 5.1 and 5.2. 2.1.2 Delegate authority to the Executive Director of Environment & Regeneration to award the contracts following the return of tenders, in consultation with the Head of Procurement and the Head of Legal & Democratic Services in respect of those contract awards which are key decisions. 3. 3.1 REASONS The current contracts expire by 31 March 2012. There is no alternative inter borough contracts which can be used as an alternative. Therefore it is critical that new contracts are procured in accordance with Procurement Rules, to ensure continuity of statutory maintenance and inspection regime for the councils corporate assets. BACKGROUND

4.

The Council needs suitable contractors to undertake re-active/responsive repairs works to the Councils Corporate property assets and regular, statutory building inspections. 4.1 4.2 All work is funded from the Corporate Repairs and Maintenance Fund The majority of reactive work is requires short response times to ensure buildings can continue to run both for staff and visitors. If repair works are not undertaken rapidly the building may either become unsafe for occupants (e.g. roof leaks, defective lighting), or may become insecure (e.g. broken windows). The reactive maintenance contracts will cover a significant number of small items of work where building element failures have occurred. This inspection tender will include routine testing or maintenance of elements in buildings for compliance or health and safety. The statutory inspections and related work are required under the council statutory Health and Safety obligations. Any major building maintenance and repair works (over 30,000) will be subject to competitive quotes or tender process, via the council eprocurement portal, based on latest procurement rules. The key issue for a contractor undertaking reactive maintenance work is the ability to meet short timescales for attendance on site and the undertaking of the necessary work. Consequently it is imperative that the contractors have a local workforce or a base in the borough to be able to respond effectively to emergency calls and meet contractual deadlines. Therefore it is proposed that the tender emphasises the

4.3

4.4

4.5

need for local workforce, which would also contribute to the local economy and employment. 4.6 When this work was tendered 3 years ago the Primary Care Trust were included in the proposals, but they have confirmed that due to the proposals for the future of the ownership of the current PCT property portfolio they do not wish to be included this time. Although consideration has been given to the potential to work in collaboration with other Councils work carried out by the procurement team identified that no neighbouring councils will have existing frameworks in place or would be able to carry out joint procurement within the timescales which would enable re-procurement by the end of the current contracts/ contract extensions. Given the need for rapid response times for this type of work it is less likely that a single contractor could offer such a service across a larger area. Prior procurement shown that there is an extensive local and regional network of relevant contractors interested in this work. In accordance with the Councils Contract Procedure Rules this proposal has been to the Strategic Procurement Board for approval and a copy of that report is attached as Appendix A. PROPOSALS Reactive maintenance contracts - It is proposed to procure this work under two separate contracts, both for works up to a value of 30,000 for individual order as follows: a. b. 5.2 General Building repairs, including metalworks and glazing Electrical repairs

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4.8 4.9

5. 5.1

Cyclical inspection and maintenance contracts it is proposed to procure the services as six separate contracts up to a value of 30,000 for individual order as follows. Bidders would be able to bid for some of the contracts concurrently, if they have the relevant experience and infrastructure in place: a. Mechanical inspections and maintenance, including water hygiene inspections and risk assessments, air conditioning and boilers Intruder alarms inspection and maintenance Asbestos inspections Fire alarms, fire equipment and Fire Risk Assessments (FRAs) Lift inspection and maintenance Electrical and lighting testing (including PAT testing)

b. c. d. e. f. 5.3

The procurement for both types of contracts would be in two stages:

a. b.

Pre Qualification Questionnaire (PQQ) to select a short list of suitable firms Invitation to tender (ITT) seeking a % price against proposed asset schedule of rates

At PQQ stage those companies that express an interest will be assessed on experience, technical capacity, financial standing, health and safety, and equalities. At ITT tenders will be evaluated on their method statements regarding methodology and resourcing as well as price against a schedule of rates set by the Council, which is based on national best practice. 5.4 The timetable for tendering will be programmed to ensure that successful contractors are in place for a contract start date of 1st April 2013 for reactive maintenance and 1st July 2013 for cyclical contracts. The current contracts contain the right for them to be extended and this right will be exercised for the period until the new contracts commence. All contracts will be procured for a period of 5 years with an option for 1 year extension to secure best price from contractors. The contracts will be based on a call-off principle which will ensure flexibility of provision to accommodate the changes to the corporate assets portfolio and any future partnering arrangements. Finally the requirement for the contractors to have a local base will increase apprenticeship opportunities in the borough and will provide local career paths for the boroughs secondary schools and 6th form graduates. OPTIONS Alternative options considered were joining with other neighbouring councils in joint procurement for these services or using existing frameworks the council can be party to. Corporate procurement explored these options and confirmed that neither option is viable within the timescales, as majority of the contracts could not be extended beyond the indicated end date. SUSTAINABLE COMMUNITY STRATEGY PRIORITIES (AND OTHER NATIONAL OR LOCAL POLICIES OR STRATEGIES) All current contractors are locally based and whilst a larger firm with a local representation may be able to meet the response performance targets, there are many local firms who could provide the work, and the advertising of the opportunity will seek to ensure as much local coverage as possible. This is in line with the Leaders Regenerate our Borough priority of Helping our residents to gain skills to get back into work and support our local businesses. Procurement legislation does not allow discrimination against non-local organisations but does allow the Council to take into account socio-economic factors where they are relevant and proportionate to the contract. The tender documentation

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6. 6.1

7. 7.1

will ensure that suppliers can be responsive and also build in requirements around apprenticeships etc. 8. 8.1 CONSULTATION Building and facility managers across the portfolio will be consulted and the Councils Construction advisors NPS (London) will assist with the technical aspects of the tendering exercise. IMPLICATIONS Finance, Value for Money and Risk

9. 9.1

9.1.1 There are no immediate financial implications associated with the proposals in this report. 9.1.2 The annual value of the repairs and maintenance contracts is estimated at: a. General building repairs, glazing and metalwork - 600K b. Electrical works. - 450k 9.1.3 The annual value of the cyclical inspection and maintenance contracts are estimated at : a. Mechanical inspections and maintenance, including water hygiene inspections - 105K b. c. d. e. f. g. Intruder alarms inspection and maintenance - 20K Asbestos inspections - 100K Fire alarms, fire equipment and - 58K Fire Risk Assessments (FRAs) - 50K Lift inspection and maintenance - 17K Electrical and lighting testing (including PAT testing) - 82K

9.1.4 The Strategic Procurement Board report indicates that FRAs and fire alarms/equipment would be a single contract. However these not services that the same contractors would provide and will be procured separately as shown above. 9.1.5 The corporate R&M fund has not been increased for inflation for more than 6 years and has been reduced by 400k over the last two years. 9.1.6 Through the accommodation review process as well as individual service reviews the Council has sought to reduce its property holdings, and in particular those assets indicating a high level of expenditure on

maintenance. This is likely to reduce the annual values of the contracts above, through contracts duration.

9.1.7 National indicators suggest that building costs have begun to rise since the last tendering exercise, which may result in small unit costs increases across the schedule of rates. Any such increase can however be contained within the existing budget. 9.2 Legal

9.2.1 The Council has power under section 111 of the Local Government Act to do anything necessary or incidental that is conducive to carrying out its functions and the letting and management of such contracts would come within this power. 9.2.2 Under the Public Contracts Regulations 2006 (the Regulations), works contracts over 4,348,350 and Part A services contracts over 173,934 have to be tendered in accordance with the procedure set out in the regulations, which involves some elements of the tendering process requiring a European-wide tender preceded by an advertisement in the Official Journal of the European Union (OJEU). Those contracts which require advertising in OJEU are identified in the report to Strategic Procurement Board at Appendix A. 9.2.3 The Council must also comply with its own Contract Procedure Rules, which are set out in the Constitution and require procurements of this size to be approved prior to Cabinet decision by the Strategic Procurement Board. 9.2.4 Authority is being sought to delegate the award decision to the Executive Director of Environment and Regeneration. As some of those contracts are valued at over 1M the award decision will be a Key Decision and need to be on the Forward Plan. 9.2.5 If it is necessary to extend any of the contracts in order to complete the procurement process, they will have to be extended in accordance with the Councils Contract Procedure Rules and the appropriate waiver of the Rules relating to competition will have to be given if the contract does not contain a provision for extension. 9.2.6 The Council will complete appropriate contract documentation with successful tenderers in accordance with the Councils procurement rules. 9.3 Equalities and Diversity

9.3.1 The Councils property assets provide access to services to all sectors and all members of our communities. There are therefore no specific equalities issues relating to the tendering of this contract. 9.3.2 An equality assessment will be undertaken of all interested firms at PQQ. The building trades are recognised as being under represented by female operatives and the training and apprenticeship requirements, which would be set in the relevant contracts, would aim to redress this balance. 9.4 Sustainability (including climate change, health, crime and disorder)

9.4.1 The Council will seek to agree with the new contractors procedures for the use of sustainable building materials and components. 9.4.2 By undertaking repairs works in a timely manner the Council ensures that deterioration of the assets is minimised and that more expensive repairs are not required. Timely repairs also ensure that the asset is safe to use for staff and visitors.

9.5

Council Infrastructure

9.5.1 None BACKGROUND INFORMATION (as defined by Local Government (Access to Information) Act 1985)

Approval by the Portfolio Holder I have cleared this report for inclusion on the Cabinet agenda.

Signed:

Date: 2nd November 2012

Cabinet Member for Economic Development & Corporate Resources