Issue details
Tower Hamlets Town Hall - Contract Sum Risk Contingency Approval
PDF 93 KBThis report requests consideration of an additional risk contingency allocation to be approved through an Individual Mayoral Decision (IMD) towards the new Town Hall project as agreed by the Project Board and following advice from the Acting Corporate Director of Finance.
The Council will shortly enter into the JCT Design and Build contract. The main contractor is taking on the majority of building related risks including construction inflation; design development and co-ordination; all risks on the new-build element; and, risks in the ground. However, a number of risks remain with the council; an assessment of those risks has been appraised by the Projects’ Employer’s Agent (appended as an exempt report) which has been presented to the Project Board.
Approval is sought via an IMD to secure a funding allocation to provide for an additional client-held contingency budget to help manage remaining risks on the project. An Individual Mayoral Decision is required in this instance on the basis that further delays in authorising the contract will have significant project cost implications and cause programme delays.
Decision type: Key
Reason Key: Expenditure or Savings of over £1 Million;
Decision status: Recommendations Approved
Wards affected: (All Wards);
Notice of proposed decision first published: 21/11/2018
This decision will be taken under urgency procedures.
Reason for urgency:
The target date for entering into the main JCT design and build contract with our preferred contractor is week commencing 26th November 2018. Political sign off of this IMD to secure and approve the additional project risk contingency is vital prior to signing the main contract. It is therefore not possible to delay or defer this decision to accommodate the normal call-in procedures; this is because a 4 week delay to contract signing is likely to result in an additional programme cost of £118K per week or £472k for a further four week delay.
It was not possible to give 28 days’ notice of this decision because final commercial negotiations with the main contractor were only concluded on 15 November and the final assessment of options was then carried out immediately to allow the Project Board to make a decision on its preferred way forward on the 19 November.
Anticipated restriction: Part exempt (Part of the report will be exempt) - View reasons
Explanation of anticipated restriction:
Commercially sensitive financial and legal information is contained in the exempt report which relates to the finalisation of a substantial JCT design and build contract with the preferred contractor for the new Town Hall development.
Decision due: Not before 29th Nov 18 by Mayor's Executive Decision Making
Lead member: Mayor
Lead director: Corporate Director, Place
Department: Place
Contact: Ann Sutcliffe, (Corporate Director, Place) Email: Ann.Sutcliffe@towerhamlets.gov.uk, Naznin Chowdhury, (One Tower Hamlets) Email: naznin.chowdhury@towerhamlets.gov.uk.
Consultation process
The town hall project was subject to extensive internal and external consultation, this includes borough wide public consultation events, engagement with public, private and statutory partners such as Historic England, TfL, Barts Health NHS Trust, Department of Health and the Tower Hamlets CCG.
For more information on stakeholder engagement and public consultation, please see the 27th June 2017 Cabinet report and the ‘Statement of Community Involvement’ submitted as part of the Planning determination process:
Has an Equality Analysis been carried out and if so the result of this Assessment?: April 2015 (Cabinet report) https://democracy.towerhamlets.gov.uk/documents/s78665/5.1a%20Civic%20Centre%20Cabinet%20Report.pdf
What supporting documents or other information will be available?: 27th June 2017 Cabinet report - https://democracy.towerhamlets.gov.uk/ieListDocuments.aspx?CId=720&MId=7698 T&T Gateway 3 report (appendix to report)
Agenda items
- 29/11/2018 - Mayor's Executive Decision Making Tower Hamlets Town Hall - Contract Sum Risk Contingency Approval 29/11/2018