BRIDGEND COUNTY BOROUGH COUNCIL
REPORT TO CABINET
20 SEPTEMBER 2011
REPORT OF THE CORPORATE DIRECTOR – CHILDREN
AND
SECTION 151 OFFICER
SCHOOL MODERNISATION: GATEWAY TO THE VALLEYS PROJECT PROCUREMENT OF THE CONTRACTOR and ACCEPTANCE OF GRANT FROM THE
WELSH GOVERNMENT
1.
Purpose of Report.
The purpose of this report is to (a) seek approval to appoint J B Leadbitter & Co Ltd.
as the main contractor based on their 85% target cost submission to construct the
new Gateway to the Valleys school and community campus and (b) approve
acceptance of a grant of £26,048,984 from the Welsh Government to part fund the
Gateway to the Valleys new build community school (Coleg Cymunedol Y Dderwen)
subject to both parties agreeing the terms and conditions of the grant.
2.
Connection to Corporate Improvement Objectives / Other Corporate Priorities.
2.1
Gateway to the Valleys is one of the Phase 2 projects of the school modernisation
programme, which supports many of the Corporate priorities and Community
Strategy themes and in particular:

Young voices

Strong Communities

Healthy Living

New Opportunities
3.
Background.
3.1
Cabinet has previously approved the strategy and necessary steps in the statutory
process to close Ogmore and Ynysawdre Comprehensive Schools and create a
single school on the Tondu site to serve the Ogmore and Garw Valleys and the
Gateway to the Valleys area and provide substantial community facilities. At the
meeting of 3rd November 2009, Cabinet agreed to provide assurance to the Welsh
Government that the necessary funding to implement the Gateway to the Valleys
proposal would be made available as part of the School Modernisation budget in
the Council’s Capital Programme, subject to the Council being able to
accommodate any future reductions in national capital spending allocations within
its capital programme. At that meeting, approval was also received to appoint
consultants to undertake the next stage of feasibility and design work for the
proposed new secondary school at Tondu.
3.2
On 27th November 2009, Jane Hutt AM, then Minister for Children, Education and
Lifelong Learning and Skills at the time, gave approval to the proposals, subject to
the receipt of the necessary planning consent by 31st March 2011. Design
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consultants were subsequently commissioned to take the project to RIBA Stage C
(outline proposal) and provide a full stage C report by 31 st March 2010. Cabinet
received the Stage 3 report in May 2010 and agreed to pursue option 3 which was
for a new build.
3.3
A bid for £26 million was made for Tranche 3 Transitional Capital Funding from the
Welsh Government towards the construction of the school and associated
community facilities. Notification was received in July 2010 that the bid had been
successful, subject to the remaining 30% project cost being met from the Council’s
own resources. Council approved the capital programme, which includes the
required 30% match funding for the scheme, on 23rd February 2011.
3.4
In February 2011, Cabinet also approved a procurement strategy for the
appointment of the main contractor for the Gateway to the Valleys School, utilising
the South East Wales Schools Capital Procurement Framework (SEWSCAP).
Cabinet also requested a further report, following the conclusion of the procurement
process and before the award of the contract, to set out the position regarding
project costs and available budget and to approve the recommendation of the
appointment of the main contractor.
3.5
Following Cabinet approval to go forward with the procurement of the construction
of the Gateway to the Valleys school, a mini competition tender between
contractors in Lot 5 of the SEWSCAP Framework Agreement was progressed and
the tender from J B Leadbitter & Co Ltd was considered most favourable in terms of
the 70:30 split in respect of quality and cost. J B Leadbitter & Co Ltd was, therefore,
appointed to undertake the initial work under a Professional Services Contract, this
being Stage 1 of the NEC3 (New Engineering Contract) Option C target cost
contract with Activity Schedule in order to establish the 85% target cost.
3.6
On 28th June 2011, Cabinet agreed to receive a further report from the Section 151
Officer once the 85% target cost had been established. This report was to set out
the position regarding project costs and available budget and to seek approval for
appointment of the main contractor.
4 Current situation / proposal.
4.1
The use of the NEC3 Option C two stage contract has enabled an early involvement
of J B Leadbitter & Co Ltd. to the betterment of the project. Since appointment they
have worked collaboratively with the design team and the client department in order
to achieve best value and to establish the required 85% target cost.
4.2
The target cost submitted, which includes ground works, construction and novated
design team fees is £33,886,742 which is within the budgeted figure of
£34,136,966 for this part of the project.
4.3
The project will be let as a NEC3 Option C: Target Contract with Activity Schedule
and will continue to proceed along a partnering approach.
4.4
As the appointment is being made using the SEWSCAP Framework Agreement the
Council will need to comply with contractual terms and conditions of that Framework
Agreement.
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4.5
As reported on 8th February 2011, Davis Langdon advised that any potential
financial gains or losses should be shared between the Council and the successful
contractor. The Contractor’s percentage share of price reductions/increases over
the contract value (with the council gaining/meeting the remainder) will therefore be:
Share Range
Less than 95%
From 95% to 100%
From 100% to 105%
Greater than 105%
Contractor Share
0%
50%
50%
100%
4.6
This maximises the incentive for the contractor to bring the project in within budget
and increase the potential for shared savings for both the Contractor and Client
whilst limiting any overpayment to which the Council may be exposed. The target
cost approach encourages collaborative working on an open book basis. Any
changes would be transparent and carefully managed and the contractor would be
paid actual cost; any savings or overspend would then be shared in line with the
range set out in paragraph 4.5. It is in both parties interest to work together to
achieve shared savings and avoid shared losses. BCBC’s potential share of any
losses would be capped to an affordable level.
4.7
The Council has received formal notification of the grant offer from the Welsh
Government for £26.049 million. The standard general and financial conditions
applying to the grant, along with specific conditions in respect of sustainability,
energy efficiency, fire sprinklers, the use of recycled materials and community
benefits, are subject to agreement between the two parties and will be finalised by
the end of September. We have been advised of the nature of the conditions, but at
the time of writing are waiting for formal written confirmation.
4.8
Once these terms have been written into the final contract, the Council will be
required to accept the grant by entering into a formal agreement with the Welsh
Government in order to trigger the grant payments.
5.
Effect upon Policy Framework and Procedure Rules.
There is no effect on policy framework and procedure rules.
6.
Equality Impact Assessment.
An Equality Impact Assessment has been carried out for the whole scheme. There
are no significant issues and those which have been identified, mainly around
access for those with disabilities during the split-site arrangements, are being
addressed.
7.
Financial Implications.
7.1
As at the start of this financial year there was £38.001 million allocated to this
project, £11.64 million of this coming from the Council’s capital programme (£8.5
million of which is to be met from prudential borrowing, with the funding secured
from previous school amalgamation savings), £312,000 Welsh Government tranche
1 transitional funding and £26.049 million from Welsh Government tranche 3
transitional funding, (for which we have received approval in principle and are
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currently finalising details of the funding contract with Welsh Government). Under
the terms of secondary option Clause X14 of the construction contract, the Council
has the option to make an advance payment to the contractor, subject to the
contractor providing an advance payment bond. The Council will exercise this
option for the purposes of securing early procurement of materials, carrying out
groundworks and meeting the funding profile.
8.
Recommendation.
Cabinet is recommended to:
8.1
approve the appointment of J B Leadbitter & Co Ltd. as the main contractor, based
on their 85% target cost submission, to construct the new Gateway to the Valleys
school and community campus, and to enter into a contract with J B Leadbitter &
Co Ltd under NEC3 Option C: Target Costs contract with activity schedule, subject
to:
(a) the contract being approved by the Corporate Director – Children in consultation
with the Assistant Chief Executive Legal and Regulatory Services and the
Section 151 Officer, and
(b) exchange of contracts with the Welsh Government for the tranche 3 transitional
funding;
8.2
accept the grant offer from the Welsh Government for £26,048,984 as a contribution
towards the completion of works in respect of the Gateway to the Valleys new build
community school (Coleg Cymunedol Y Dderwen) subject to the terms and
conditions of the grant being agreed by the Corporate Director – Children, in
consultation with the Assistant Chief Executive Legal and Regulatory Services and
the Section 151 Officer.
Hilary Anthony
Corporate Director - Children
20th September 2011
Contact Officer:
Trevor Guy
Head of Strategy, Partnerships and Commissioning
Telephone:
(01656) 642617
E-mail:
trevor.guy@bridgend.gov.uk
Postal Address
Sunnyside
Bridgend
CF31 4AR
Background documents
Council Report 13th September 2006, “LEARNING COMMUNITIES – SCHOOLS OF THE
FUTURE – STRATEGY, PRINCIPLES, POLICY AND PLANNING FRAMEWORK”
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Cabinet Report 12th December 2006, “LEARNING COMMUNITIES: SCHOOOLS OF THE
FUTURE” – SCHOOL MODERNISATION PROPOSALS.
Cabinet Report 31st July 2007, “SCHOOL MODERNISATION PROGRAMME: PHASE 2 –
11-18 LEARNING PROVISION IN THE GATEWAY TO THE VALLEYS AREA”
Cabinet Report, 11th September 2007, “SCHOOL MODERNISATION PROGRAMME:
PHASE 2 ARCHBISHOP MCGRATH ROMAN CATHOLIC COMPREHENSIVE SCHOOL
– UPDATE”
Overview and Scrutiny report, 22nd October 2007, “PROPOSAL TO SITE THE NEW
ARCHBISHOP MCGRATH ROMAN CATHOLIC SCHOOL IN BRACKLA”
Cabinet Report 12th August 2008, “SCHOOL MODERNISATION PROGRAMME: PHASE 2
11-18 LEARNING PROVISION IN THE GATEWAY TO THE VALLEYS AREA”
Cabinet Report 2nd December 2008, SCHOOL MODERNISATION PROGRAMME:
PHASE 2 11-18 LEARNING PROVISION IN THE GATEWAY TO THE VALLEYS AREA
Council Report 18th February 2009, CAPITAL PROGRAMME 2007/08 - 2011/12
Cabinet Report 28th April 2009, SCHOOL MODERNISATION PROGRAMME: PHASE 2
11-18 LEARNING PROVISION IN THE GATEWAY TO THE VALLEYS AREA
Cabinet Report 15th September 2009, SCHOOL MODERNISATION PROGRAMME:
PHASE 2 11-18 LEARNING PROVISION IN THE GATEWAY TO THE VALLEYS AREA
Cabinet Report 3rd November 2009, SCHOOL MODERNISATION PROGRAMME:
PHASE 2 11-18 LEARNING PROVISION IN THE GATEWAY TO THE VALLEYS AREA
Council Report, 10th February 2010: CAPITAL PROGRAMME 2009/10 - 2019/20
Council Report, 18th May 2010: SCHOOL MODERNISATION PROGRAMME: PHASE 2
11-18 LEARNING PROVISION IN THE GARW AND OGMORE VALLEYS AND THE
GATEWAY TO THE VALLEYS AREA
Cabinet Report, 7th September 2010: SUPPORT OF THE SOUTH EAST WALES
SCHOOLS CAPITAL PROCUREMENT FRAMEWORK (SEWSCAP)
EQUALITIES IMPACT ASSESSMENT: GATEWAY TO THE VALLEYS PROPOSAL, 12TH
JANUARY 2011
Cabinet Report, 8th February 2011: SCHOOL MODERNISATION: PROCESS FOR THE
PROCUREMENT OF THE CONTRACTOR FOR THE GATEWAY TO THE VALLEYS
PROJECT
Council Report, 23rd February 2011: REPORT OF THE SECTION 151 OFFICER,
CAPITAL PROGRAMME 2010/11 – 2014/15
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Cabinet Report, 28th June 2011: SCHOOL MODERNISATION:PROCESS FOR THE
PROCUREMENT OF THE CONTRACTOR FOR THE GATEWAY TO THE VALLEYS
PROJECT
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