London Borough of Havering

Romford

RM1 3BD

UK

Contact person: Maria Faheem

E-mail: Maria.Faheem@havering.gov.uk

NUTS: UKI52

Internet address(es)

Main address: www.havering.gov.uk

II.1.1) Title

II.1.2) Main CPV code

45211340

II.1.3) Type of contract

Works

II.1.4) Short description

LB of Havering (‘the Council’) entered into a contract for up to 30 years for a partner to form a long-term corporate joint venture (‘JV’) property vehicle to secure investment and expertise to deliver Havering’s housing led regeneration strategy, entered into 27 April 2018 (‘the Contract’). The opportunity was advertised in OJEU (2017/S 094-185114) and procured under the Concession Contracts Regulations 2016. Further details of the original Contract are in that OJEU Notice. The Contract includes a Members’ Agreement (MA) and Development Agreement (DA) with the JV LLP and other ancillary documents.

The Council has made additional funding available, refreshed the JV’s business plan and modified the DA. Further information can be found in the Council’s supplement document, at the web address in section II.2.4) below.

The information in the supplement document should be read in conjunction with this notice and both documents should be considered as a whole.

II.1.5) Estimated total value

Value excluding VAT: 1 177 000 000.00  GBP

II.1.6) Information about lots

This contract is divided into lots: No

II.1.7) Total value of the procurement

Value excluding VAT: 1 177 000 000.00  GBP

IV.1.1) Form of procedure

Award procedure without prior publication of a concession notice in the cases listed below (please complete Annex D4)

Justification for selected award procedure:

The procurement falls outside the scope of application of the Directive

Explanation

Please explain in a clear and comprehensive manner why the award of the contract without prior publication in the Official Journal of the European Union is lawful, by stating the relevant facts and, as appropriate, the conclusions of law in accordance with the directive:

Assessed individually and cumulatively, items 1–5 (as referred to in II.2.4) are all within the scope of the original OJEU/procurement and would not have affected the outcome (‘Procurement Outcome’).

The Council additionally/alternatively relies on Reg. 43(1)(a) (clear, precise, unequivocal review clauses), (c) (unforseeability), (e) (non substantial amendments — i.e. there is no material change in character of the contract, no considerable extension of scope, no distortion of competition and no change in the economic balance in favour of the contractor) and also Reg. 31(6)(b)(ii) as further described below:

The forward funding described in Change 1 and also Changes 2 and 3 are part of the annual business plan refresh, are within procurement scope and do not result in a change to the contract.

1) Re. additional equity funding: there is no increase in the Council’s peak net investment, no impact on the risk profile and no change in the economic balance. No change to the contract.

Re. forward funding: this is required due to a stagnant housing market eroding land value (impacting viability), build cost inflation, design enhancements, reduction in private sale cross subsidy and more affordable and family sized housing. These features would have applied to all bidders and the Council considers the Procurement Outcome would not have been impacted. Further, schedule 8, para 1.3 included scope to adjust Low Cost Unit Sum pursuant to VFM Standard and Code of Practice of Homes and Communities Agency;

2) Re. removal of the delta estate from current programme; this is a development phasing detail as no commitment was made to developing out the delta estate at this point in time, it was not tested as a sample scheme during the procurement process. Neither bidding behaviour nor Procurement Outcome would have been impacted;

3) Re. additional sites, these were within the OJEU notice scope and are similar to the sample sites tested as part of the procurement. Their delivery is consistent with financial and technical commitments in the tender to apply to subsequent schemes. The addition of further sites was transparently set out in the procurement documentation, is subject to an agreed mechanism and was incorporated into the evaluation questions. The Council alternatively relies on Reg 43(1)(a) (clear, precise, unequivocal review clauses).

IV.1.8) Information about Government Procurement Agreement (GPA)

The procurement is covered by the Government Procurement Agreement: Yes

IV.2.1) Previous publication concerning this procedure

Notice number in the OJ S:

2017/S 094-185114

Wates construction Ltd

Leatherhead

UK

NUTS: UKJ2

The contractor is an SME: No

VI.4.1) Review body

VI.4.3) Review procedure

Precise information on deadline(s) for review procedures:

In accordance with Regulation 49-64 (Applications to the Court) of the Concession Contracts Regulations 2016 (‘CCR’).

Cont from Annex D4 (expl. for type of procedure) (Section IV.1.1.):

4) OJEU notice contained demolition CPV and DA included demolition obligations. Council considered that bringing forward demolition and GBP 7.8 million financing would not impact on Proc outcome and was needed to expedite delivery and avoid additional costs. A change was made to DA and a new supplemental DA entered into re. this item alone. The procurement of an alternative contractor would have legal and financial ramifications for Council, would stall the 12 Site Regeneration Programme and would not be a reasonable alternative. The Council therefore further relied on Reg 31(6)(b)(ii);

5) Re. purchase of units and payment for NNP, Council also relied on: Reg 43(1)(c) - both changes were a reasonable and proportionate response to Covid (and needed to ensure the dev remains viable in current uncertain housing market). As per PPN01/20, changes are limited. The changes do not alter overall nature nor exceed original value by more than 50 %; Reg 43(1)(e) - NNP represents under 6 % of expected unit outputs;

Re. build contract sum, the Council accepted the risk of cost overruns, but any change was not substantial and surveys provide assurance on this. No impact on Proc Outcome; Reg 43(1)(a) – contract stated price to be paid on Practical Completion but envisaged a change could be made if provided in BP or agreed between parties.

6) The DA links 3 Sites (Napier New Plymouth, Serena Sunrise and Waterloo Phase 1) into Stage 1 and requires that the pre-conditions be satisfied in relation to all 3 sites and that the sites be drawn down together for development. The DA has been varied to allow each of the Stage 1 Sites to be drawn down separately (in an order to be agreed between the parties) rather than all of Stage 1 having to be drawn down together. No impact on Proc Outcome Reg. 43(1)(e) in terms of the requirement to build out all 3 sites remaining in place and it is still proposed that they will be developed in close proximity in programme.

Further information can be found in the Council’s supplement document.