Contracts with Variations
North Lanarkshire Council · 13 September 2023
Back to Finance and Resources Committee — 13 September 2023 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
Page 1
North Lanarkshire Council Report Finance and Resources Committee Does this report require to be approved? ☐ Yes ☒ No Ref JMcG/JMcK Date 13/09/23 Contracts with Variations From James McKinstry, Chief Officer (Assets and Procurement) E-mail MckinstryJ@northlan.gov.uk Telephone 07939 281102 Executive Summary In accordance with the Council’s Financial Regulations, this report notifies the Committee of contracts completed between 1st January 2023 and 30th June 2023, where the expenditure levels have exceeded the contract award levels by greater than 5% or £25,000. Recommendations It is recommended that the Finance and Resources Committee: (1) Acknowledge the content of this report and the accompanying appendix. The Plan for North Lanarkshire Priority Improve North Lanarkshire's resource base Ambition statement (25) Ensure intelligent use of data and information to support fully evidence based decision making and future planning
Page 2
1. Background 1.1 The Councils General Contract Standing Orders (the ‘GCSOs’) outline financial approval thresholds for contracts for goods, works and services. This report details Works (construction contracts) where funding has previously been approved in line with GCSO’s. 1.2 The Councils Financial Regulation, (13.4) Significant Variations, details the threshold of variances where reporting is required. 1.3 The Chief Officer of Assets and Procurement is required to notify Committee on a periodic basis of any such contracts containing variations as identified by the criteria in 1.1 above. 2. Report 2.1 The Councils Financial Regulation state, any variations where the outturn/expected costs exceed the tendered contract price by the higher of £25,000 or 5%, or where the outputs/outcomes achieved by the expenditure differ from those originally envisaged, shall be reported to the relevant Spending Committee at the earliest opportunity. 2.2 Contracts awarded by the Chief Officer (Assets and Procurement) for works undertaken in the period 1st January 2023 and 30th June 2023 containing variations are detailed in Appendix.1. 2.3 Due to the nature of construction contracts a flexible approach is required to manage contract deliverables and desired outcomes and typically this is achieved by the inclusion of a contingency allowance to address unknown quantities or abnormalities. 2.4 Any construction works undertaken within the Council’s portfolio may encounter issues that can result in additional costs after work has commenced. Asbestos is problematic and costly to address, especially within the Council’s ageing property estate. The rerouting of service provisions is another contributing factor with other expenditure being attributed to health and safety issues including addressing fire stopping issues. Additional client instructions being added to contracts following award will also increase the overall contract sum, but it should be noted that the scope of these instructions will be within the parameters of the original tender documents and rates will be a direct drawdown from those already provided or a benchmarking exercise is undertaken to demonstrate value for money. 3. Measures of success 3.1 Contracts support the delivery of Council objectives and service priorities. 3.2 Contracts containing variances are managed by the Council and are compliant with Financial Regulations, GCSOs and procurement legislation. 3.3 The Council’s Contract Register and budgetary monitoring systems are kept updated by services and management information is comprehensive and accurate. 3.4 Best Value is both demonstrable and achieved. 4. Supporting documentation 4.1 Appendix 1 – Summary of construction contracts containing variations.
Page 3
James McKinstry Chief Officer (Assets and Procurement)
Page 4
5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☒ No ☐ If Yes, have all relevant financial impacts been discussed and agreed with Finance? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts been discussed and agreed with People Resources? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ If Yes, have all relevant legal impacts been discussed and agreed with Legal and Democratic? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact?
Page 5
Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☐ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? Contract management procedures may be susceptible to financial claims and legal challenge if they are not discharged in accordance with Contract Conditions, Financial Regulations, GCSO’s and procurement legislation. Accumulation of contract overspends may impact on future Capital Programmes. Project risks are logged on the appropriate Risk Registers and managed by the Service. 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex- Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ If Yes, please provide a brief summary of the provision which has been made to ensure there has been appropriate consideration of the particular needs of the Armed Forces community to make sure that they do not face disadvantage compared to other citizens in the provision of public services. 5.11 Children’s rights and wellbeing impact Does the report contain any information regarding any council activity, service delivery, policy, or plan that has an impact on children and young people up to the age of 18, or on a specific group of these? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact and the provision that has been made to ensure there has been appropriate consideration of the relevant Articles from the United Nations Convention on the Rights of the Child (UNCRC). If Yes, has a Children’s Rights and Wellbeing Impact Assessment (CRWIA) been carried out? Yes ☐ No ☐
Page 6
APPENDIX 1 Summary of construction contracts containing variations: Project Title Estimated Final Out-turn Tender Amount Variation Reason St Barbara’s Primary School, Muirhead – 4 x classroom refurbishments. £268,401.00 £226,211.00 Upgrade cubicle doors and ironmongery, additional electrical works to replace, unforeseen perished cables, agreed additional out of hours working to reduce disruption when upgrading cables and rerouting new water supply to classroom sinks, access ramp specification changed to concrete, include electronic panic bars to both sets of fire escape doors. Woodlands Primary School, Cumbernauld - Provision of a New Multi-Use Games Area (MUGA). £153,196.00 £136,999.00 Additional instructed works: install Community access gate and associated footpaths. Instructing these works enabled the use of the adjacent carparking facilities. Demolition of Old Fleet Building, Old Edinburgh Road, Bellshill. £181,876.00 £116,013.00 Unexpected asbestos found in gable cavity wall, diversion and reconnection of water supply to adjacent domestic properties.