Decision details

The Executive Leader presented the report of the Chief Executive that updated members on the proposals concerning the letting of the construction contract and sought approval of the entering of a pre-agreement with Eric Wright.

In September Full Council members had agreed to proceed with the new Market Walk project subject to planning approval of a Section.73 application and having pre-let contract agreements in place for 75% or more of the new units. The Council have agreed Heads of Terms for 74.3% of the units (an additional 3%m of the units are associated landlord areas) making a total of in excess of 77%. Only one of the units has actually exchanged a pre-let contract.

In order to progress the project to enable the Council to meet target completion dates for prospective tenants, it was proposed to enter into a pre-construction services agreement (PCSA) with Eric Wright. This would enable the Council to simultaneously progress the detailed design together with the phased enabling works but would not commit the Council to a final construction contract.

There are two advantages to this approach. Liability under this contract would be significantly limited as it would relate only to the reduced scope of works and the delay in signing the full construction agreement would enable the Council to better specify the works both in terms of the shell but also tenant requirements. This would enable the head contractor to obtain detailed quotes for work, providing certainty on contract price and better managing the risk for the Council.

Decision:

1.  That the recommendation for the Council to enter into a pre-construction services agreement with Eric Wright to enable greater certainty to be obtained on the final construction contract, whilst maintaining the momentum of the programme and phased enabling works be noted.

2.  That the recommendation for the Council to use a JCT (D&B) 2016 form of contract for the construction contract be noted.

3.  That Council be recommended to approve the authority entering into a pre-construction services agreement contract with Eric wright under the Lancashire Regeneration Property Partnership.

Reasons for Recommendation(s)

The use of a PCSA will enable the Council to progress the project whilst limiting any liability to a reduced scope of works.

Alternative options considered and rejected:

Entering into a final construction contract was considered, however, this would not serve the Council’s priorities in managing risk and cost.