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ITEM EX13

EXECUTIVE – 5 MARCH 2002

PARTNERING CONTRACTS FOR BUILDING CONSTRUCTION WORKS

Report by the Director of Environmental Services

Introduction

  1. Local authorities have been encouraged by the Government to change the way in which they procure building construction works in accordance with the recommendations from the Latham and Egan Reports on Rethinking Construction. The County Council's Corporate Capital Strategy and Asset Management Plan both include policies that we should move towards partnering contracts for construction works. They are intended to give improved efficiency and better value for money by:

    • Involving contractors earlier in the process so that they can contribute to the design and adequately plan for their resource needs;

    • The client, consultant, contractor and suppliers jointly agreeing outcomes and targets;

    • All of the parties sharing the benefits of more efficient working;

    • Avoiding claims, disputes and litigation;

    • Using approved standard forms of partnering contracts;

    • Eliminating defects at handover;

    • Having the contractor involved in post completion reviews;

    • Developing long-term partnership arrangements on repeated projects to reduce costs and improve team working.

Proposals and Programme

2. A partnering team has been set up with representatives from Environmental Services, Education and WS Atkins. Potential projects are being identified. The next stage in the process will be to invite expressions of interest from potential partners by advertising in the European Journal and appropriate publications in this country in accordance with the EU requirements. Applicants would be assessed on a range of criteria including previous experience, financial stability, environmental and waste management policy, staff resources. At this stage the contractors would also be assessed on their profit and overhead rates together with indicative levels of preliminaries based on a range of typical projects.

3. A seminar of potential contractors would be arranged to coincide with the advertisement for expressions of interest to explain the process and seek contractors' views about how they see partnering working.

4. Following assessment of the responses, short listing and interviews, a partnering charter would be entered into with a selected partner. That partner might then be awarded one or more contracts using the standard contracts which are being recommended by the Best Value Review for Construction subject to checks that their submission delivers value for money to the Client. The contractor's profits and overheads would be fixed by the initial charter with the cost of the building project(s) subject to the receipt of business cases for work packages based upon a minimum of three-sub contract tenders ensuring that best value is demonstrated and secured.

Financial Implications

5. There will be some initial costs in setting up the partnering team, arranging a seminar and selecting a partner. A bid has been made to the Council's Innovation Fund to assist with those costs. In the long term, partnering should secure better value for money. The Construction Best Practice Programme has recently published data indicating that the cost of Demonstration Projects for Rethinking Construction is 9.1% lower than the industry average. Partnering is likely to be a prerequisite for successful bidding for Government funds in the future and could improve the Council's allocation of discretionary funds under the Single Capital Pot.

RECOMMENDATION

  1. The Executive is RECOMMENDED to authorise the Director of Environmental Services to complete and implement arrangements for the Council to enter into a Partnering Agreement under which contracts could be awarded for building construction works.

DAVID YOUNG
Director of Environmental Services

Background papers: Nil

Contact Officer: Neil Monaghan Tel: Oxford 815712

February 2002

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