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Works - 190592-2021
16/04/2021    S74

United Kingdom-Romford: Multi-dwelling buildings construction work

2021/S 074-190592

Concession award notice

Results of the procurement procedure

Works

Legal Basis:
Directive 2014/23/EU

Section I: Contracting authority/entity

I.1)Name and addresses
Official name: London Borough of Havering
Town: Romford
NUTS code: UKI52 Barking & Dagenham and Havering
Postal code: RM1 3BD
Country: United Kingdom
Contact person: Maria Faheem
E-mail: Maria.Faheem@havering.gov.uk
Internet address(es):
Main address: www.havering.gov.uk
I.4)Type of the contracting authority
Regional or local authority
I.5)Main activity
General public services

Section II: Object

II.1)Scope of the procurement
II.1.1)Title:

Havering Estate Regeneration Partner – Property/Asset JV Company

II.1.2)Main CPV code
45211340 Multi-dwelling buildings construction work
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 concession is divided into lots: no
II.1.7)Total value of the procurement (excluding VAT)
Value excluding VAT: 1 177 000 000.00 GBP
II.2)Description
II.2.2)Additional CPV code(s)
45112700 Landscaping work
45112710 Landscaping work for green areas
45112711 Landscaping work for parks
45211300 Houses construction work
45211341 Flats construction work
45211350 Multi-functional buildings construction work
45211360 Urban development construction work
45212000 Construction work for buildings relating to leisure, sports, culture, lodging and restaurants
45213100 Construction work for commercial buildings
45213112 Shop units construction work
45213150 Office block construction work
45223300 Parking lot construction work
65300000 Electricity distribution and related services
70000000 Real estate services
70110000 Development services of real estate
70111000 Development of residential real estate
70121100 Building sale services
70331000 Residential property services
70332200 Commercial property management services
71000000 Architectural, construction, engineering and inspection services
71200000 Architectural and related services
71222000 Architectural services for outdoor areas
71313400 Environmental impact assessment for construction
71313420 Environmental standards for construction
71314200 Energy-management services
71314300 Energy-efficiency consultancy services
71315200 Building consultancy services
71315300 Building surveying services
71410000 Urban planning services
71420000 Landscape architectural services
71500000 Construction-related services
71520000 Construction supervision services
71521000 Construction-site supervision services
73220000 Development consultancy services
79410000 Business and management consultancy services
79412000 Financial management consultancy services
79418000 Procurement consultancy services
90712100 Urban environmental development planning
45111000 Demolition, site preparation and clearance work
II.2.3)Place of performance
NUTS code: UKI52 Barking & Dagenham and Havering
Main site or place of performance:

The London Borough of Havering.

II.2.4)Description of the procurement:

Further info is at https://www.havering.gov.uk/downloads/download/876/veat_notice_supplement_documents

The Council has:

1) Made additional GBP 58.3 million equity funding available to JV. Also, refreshed JV business plan (BP) to include Council forward funding of GBP 45.4 million for phase 1 (in the light of additional 53 affordable housing units and reduction of open market units from 1085 to 934, changes to design and other factors);

2) Refreshed JV BP to remove Delta estate;

3) Refreshed JV BP to include addition of further sites;

4) Amended DA to bring forward timing of demolition of Waterloo Estate and Council providing additional GBP 7.8 million financing in place of debt funding (some changes to be made by variation to the DA and a new supplemental dev agreement with JV).

II.2.5)Award criteria
Concession is awarded on the basis of the criteria described below:
  • Criterion: Concession is awarded on the basis of the criteria stated in the procurement documents.
II.2.7)Duration of the concession
Duration in months: 360
II.2.13)Information about European Union funds
The procurement is related to a project and/or programme financed by European Union funds: no
II.2.14)Additional information

Est value in II.1.7) and V.2.4) is projected value of modified contract.

Please note, the duration field takes into account the fact that the concession started 11 December 2020.

Section IV: Procedure

IV.1)Description
IV.1.1)Form of procedure
Award procedure without prior publication of a concession notice in the cases listed below
  • 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 the Government Procurement Agreement (GPA)
The procurement is covered by the Government Procurement Agreement: yes
IV.1.11)Main features of the award procedure:
IV.2)Administrative information
IV.2.1)Previous publication concerning this procedure
Notice number in the OJ S: 2017/S 094-185114

Section V: Award of concession

Title:

Havering Estate Regeneration Partner – Property/Asset JV Company

A concession/lot is awarded: yes
V.2)Award of concession
V.2.1)Date of concession award decision:
11/12/2020
V.2.2)Information about tenders
Number of tenders received: 1
The concession has been awarded to a group of economic operators: no
V.2.3)Name and address of the concessionaire
Official name: Wates construction Ltd
Town: Leatherhead
NUTS code: UKJ2 Surrey, East and West Sussex
Country: United Kingdom
The concessionaire is an SME: no
V.2.4)Information on value of the concession and main financing terms (excluding VAT)
Total value of the concession/lot: 1 177 000 000.00 GBP

Section VI: Complementary information

VI.3)Additional information:
VI.4)Procedures for review
VI.4.1)Review body
Official name: The high court of justice
Town: London
Country: United Kingdom
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.

VI.5)Date of dispatch of this notice:
13/04/2021