Meeting documents

1 THE ISSUE

1.1 The Combe Down Stone Mines project has been doing Emergency and Enabling Works since 2001. It is now moving into the main phase of the project and a procurement process has been carried out to appoint a contractor for this phase. 4 contractors have been appointed to a framework. This report presents the results of the tender assessment, identifies the Best Value solution and outlines the future strategy for the project. The Best Value tender offers a shorter programme and a lower price.

2 RECOMMENDATION

2.1 Hydrock, the contractor which has achieved the lowest cost, best value and shortest programme for the remaining project works, be awarded a contract for the Main Scheme and instructed to undertake the next stage of the project to be released following the agreement of English Partnerships (EP) and Communities and Local Government (CLG). This comprises a package to the value of approx £18m out of an eventual total of £43m

2.2 Milestones and Key Performance Indicators (KPI's) be developed to inform the decision as to the letting of the subsequent stage(s) as per the procurement strategy (agreed by Executive in 2005) and outlined in paragraph 7.1. of this report.

2.3 The letting of subsequent stage(s), once satisfying the requirements identified in recommendation 2.2. above, be a decision delegated to the Director of Development and Major Projects.

2.4 The approach detailed in paragraphs 7.7 - 7.10 be the basis for the project methodology and residents be issued with the Claims Protocol.

2.5 The Council takes "ownership" of parts of the mine complex on both sides of Shaft Road and perhaps also at Entry Hill Quarry for the purposes of the Management and Administration of Safety and Health at Mine Regulations 1993 ("MASHAM") to enable those parts to be used in connection with accommodating the bats.

3 FINANCIAL IMPLICATIONS

4 COMMUNITY STRATEGY OUTCOMES

The CDSM project is a safety project designed to remove the hazard to life and property represented by the derelict stone mines in the area. As such it will make B&NES a better place to live work and visit by removing the risk and making the area safer.

o Sustainable Communities and Transport

o Safer and Stronger Communities

o Healthier Communities

It is proposed to award the contract on the basis of an offer for all tendered packages (A B C) combined to a single contractor but to instruct a stage release of works as an initial package

The Main Scheme scope and tendered prices have been updated for changes which have arisen during the past 6 months. Forecast costs compare favourably with project and works budgets

Release of consecutive subsequent stages to be subject to achievement of satisfactory KPI's.

A Framework contract has been procured such that in the event of failing performance alternative contractors are available

Termination clauses have been reviewed and reinforced

7.2 Tender evaluation. - Tenders were received from four contractors and evaluated in accordance with OJEU and Council Standing Orders. All four contractors achieved the required standard for selection to the framework on the basis of quality evaluation. These quality criteria were:

7.3 Tender prices have been analysed and ranked. The tender offer for the Works is £1.56m within the budget for this contract. When tender prices are combined with quality scores the combined quality price score indicates that the lowest price tender offer is also the best value tender received. The lowest tender offer for the Works also supports a forecast for the overall project of £4.14m less than the approved project budget (£161m). Full details of results and analysis are provided in Appendix 1 (exempt).

7.4 Programme. Hydrock was the only tenderer to submit an alternative bid which was based on access to all three package work areas (A, B and C) being made available from the outset. This alternative approach resulted in the shortest programme and lowest price whilst the required productivity remains in line with experience to date on the Medium Term Scope.

7.5 Funding Approval from English Partnerships (EP) and Communities and Local Government (CLG) - EP Board approval for award of the Main Scheme contract is programmed for 28 February 2007(subject to B&NES prior approval). Authority from CLG is required before the EP Board decision can be implemented and there can be no prescribed date or timescale for this authorisation. However stabilisation can continue under the Medium Term Scope.

7.6 Terms and conditions of the funding offer from EP remain onerous and every effort continues to be made to mitigate the risks identified in the report to Council of 13 July 2005.

7.7 Stabilisation. - Geotechnical advice is that the mine has failed. The purpose of the Combe Down Stone Mines project is to stabilise the mine. The designers, Scott Wilson (SW) have undertaken an analysis of the mine failure modes. These are: Crown Hole Failure, which is a localised roof collapse that will "choke" if the void is limited; and Pillar Failure, where a pillar becomes non-load bearing and does not support the roof. From that analysis SW has prepared an assessment of design requirements.

7.8 Once an area is completed, property owners will be issued with a Completion Report and a Statement of Completion detailing materials and methodology used in that particular area.

7.9 Mineral Workings Act and Claims protocol - the Council has agreed to indemnify property owners for damage during the works. The Council, working with the Board of the Combe Down Stone Mines Community Association, is setting up a Claims Protocol with a claims handler and loss adjuster appointed to administer this. The protocol will be issued to all residents.

7.10 After the scheme is finished, any householder claims will be directed by property owners to their home insurance.

7.11 With regard to recommendation 2.5, the position is as follows. Each of the operations underground as part of this Project constitutes "working" the mine in which it is carried out. If a mine is to be worked, there has to be an owner of it for the purposes of MASHAM. Such ownership does not involve any assumption of liability other than for the purposes of health and safety, and does not give the Council any interest in the mine in terms of land ownership. The proposed works are funded by English Partnerships and there are no financial implications for the Council directly flowing from this change.

8 RISK MANAGEMENT

8.1 A risk assessment related to the issue and recommendations has been undertaken, in compliance with the Council's decision making risk management guidance. From the beginning, it has been recognised that the project presents risks to the council. The latest risk assessment shows that the risks are no greater than was reported to Council on 20 January 2005, and that if the appointment goes to programme, further risks will be closed out.

8.2 The four greatest risks to the Council will then be:

8.3 Insurance arrangements have been reviewed by the Council's insurance advisor Marsh UK. Some changes have been made in line with their recommendations to ensure a consistent insurance strategy so that sufficient levels of insurance are held by all contracted parties.

8.4 Project controls - The project is being managed by the client team in the role of `intelligent client' under the project management system of the Directorate for Development and Major Projects which sets out the processes, responsibilities and reporting requirements for control of projects in B&NES. The Council has employed professional consultants for project management and cost management to support the council team.

9 RATIONALE

10 OTHER OPTIONS CONSIDERED

10.1 It was necessary to undertake this procurement exercise to comply with legislation.

11 CONSULTATION

11.1 Ward Councillor; Executive Councillor; Overview & Scrutiny Panel; Other B&NES Services; Community Interest Groups; Stakeholders/Partners; Other Public Sector Bodies; Section 151 Finance Officer; Chief Executive; Monitoring Officer

11.2 Meetings have been held with the above and draft reports circulated.

11.3 An informal presentation was made to Major Projects Overview and Scrutiny Panel on Tuesday 16^th January 2007. (See attached minute). A response to Councillor Bailey's request is in Appendix 1, paragraph 5.0.

12 ISSUES TO CONSIDER IN REACHING THE DECISION

12.1 Sustainability; Corporate; Health & Safety; Other Legal Considerations

13 ADVICE SOUGHT

13.1 The Council's Monitoring Officer (Council Solicitor) and Section 151 Officer (Strategic Director - Support Services) have had the opportunity to input to this report and have cleared it for publication.