Contract Variation - Carnbroe and Sikeside Community Hub
North Lanarkshire Council · 8 June 2023
Back to Policy and Strategy Committee — 8 June 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 Policy and Strategy Committee Does this report require to be approved? ☐ Yes ☒ No Ref JMcK/MMcB Date 08/06/23 Contract Variation – Carnbroe and Sikeside Community Hub From James McKinstry, Chief Officer (Assets and Procurement) E-mail McBrideMark@northlan.gov.uk Telephone 07583094928 1. Background 1.1 The council’s Financial Regulations detail the threshold variances where reporting of contract variations is required. 1.2 A Design and Build Development Agreement (DBDA) was signed on 13 December 2021 for the construction of Carnbroe and Sikeside Community Hub (now known as Riverbank Community Hub). This award was approved at the Policy and Strategy Committee on 2 December 2021. The total contract sum was £24,821,452. Executive Summary In accordance with the council’s Financial Regulations, any variation where the outturn/expected costs exceed the tendered contract price by the higher of £25,000 or 5%, should be reported by the appropriate budget holder to the relevant spending committee. The purpose of this report is to inform committee of a variation in costs against the tender contract price incurred on contract for the construction of Carnbroe and Sikeside Community Hub. Recommendations It is recommended that the Policy and Strategy Committee: (1) Acknowledges the contents of this report and the accompanying appendix. The Plan for North Lanarkshire Priority All priorities Ambition statement (2) Refocus our town centres and communities to be multi-functional connected places which maximise social, economic, and environmental opportunities
Page 2
1.3 The overall cost for delivering this project has exceeded the original contract sum for various reasons. 2. Report Footbridge Construction 2.1 When the project was granted planning approval, a condition of that approval was to provide safe pedestrian access from the south of the site prior to the hub opening (Planning Application No. 21/00436/FUL, Condition 24). The planning process was managed by Hub South West Scotland Limited and the appointed Tier 1 contractor, Morgan Sindall. The team reviewed various options and concluded that the construction of a footbridge was the most efficient way to satisfy this condition. 2.2 As design and tendering process was well underway when the planning decision was made to allow for continued project momentum, there was not sufficient time to include this requirement within the initial DBDA. If the process had been stopped at this time to include this requirement within the contract, the construction of the community hub would have been delayed by 6-12 months and due to volatility in the construction market this would have significantly increased the cost of the community hub by at least 2% for every three months delay. 2.3 As this requirement was a condition of the planning application for the community hub and there was insufficient time to independently procure this requirement, internal approval from the Chief Officers within Legal and Democratic Services and Assets and Procurement was sought to vary the existing construction contract to include for the construction of the footbridge. 2.4 By doing so, this allowed for efficiencies in construction timescales (which are important as the hub cannot open without access from the south or other contingency measures being in place); value for money through sharing of site accommodation and an already established supply chain; and reduction in risk of health and safety complexities due to more than one main contractor working in close proximity. By selecting this procurement route, the council ensures that the bridge will be in place when the community hub opens. 2.5 The original budget estimate was in the region of £1.8m. The cost of the footbridge is anticipated to be no greater than £1,500,000 including design and survey costs and 15% client contingency. This will be funded from the Town and Community Hub Capital Programme budget. 2.6 The Town and Community Hub Board has approved the procurement route and funding being contained within the overall programme budget. Other Variations to Date 2.7 Any construction contract can experience variations due to a number of factors outwith the council’s control. In addition to the variation for the footbridge construction, there have been 10 other variations instructed into this contract. 2.8 These are for a number of reasons including: installation of EV charging bays and future ducting provision; adjustments to external works including increasing the height of the pitch fence; replacement goals and painting of adjacent fencing; specification change to internal classroom doors to glazed doors; and
Page 3
finalising the fixed furniture and equipment required for the new hub. The variations noted above total circa £258k. 2.9 All of the above variations will be accommodated within the Town and Community Hub Capital Programme budget. 3. Measures of success 3.1 Successful delivery of the Carnbroe & Sikeside Community Hub project and installation of the pedestrian footbridge to satisfy planning conditions. 4. Supporting documentation Appendix 1 – Detail of Project Costs 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 have been discussed and agreed with Finance? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? Additional £1,753,055 of expenditure through existing contract. Additional cost can be incorporated within overall Town and Community Hub capital programme budget. 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts have 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 have been discussed and agreed with Legal and Democratic? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? Advice has been sought from Legal and Democratic Services in advance of instructing Hub South West Scotland Limited regarding potential amendments to existing contractual agreements and compliance with the relevant procurement regulations. 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 ☐
Page 5
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? 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? Installation of EV chargers at community hub to support council’s environmental policies. 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? 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.
Page 6
Appendix 1 – Detail of Project Costs Project Contractor Contract Sum Estimated Final Account Difference Main Reasons for Additional Costs Carnbroe & Sikeside Community Hub (also known as Riverbank Community Hub) Hub South West Scotland Limited £24,821,452 £26,574,507 £1,753,055 Inclusion of footbridge construction within construction contract to satisfy planning conditions and incorporation of additional works which could not be finalised when construction contract signed