Agenda item

To consider a report (copy enclosed) outlining the proposed approach to procure the next generation North Wales Construction Framework.

RESOLVED that Cabinet –

(a)       endorses the approach outlined within the report to procure the next generation North Wales Construction Framework, and

(b)       confirms that it has read, understood and taken account of the Well-being Impact Assessment (Appendix 2 to the report) as part of its consideration.

Councillor Julian Thompson-Hill presented the report seeking approval to commence procurement of the second phase of the North Wales Construction Framework (NWCF) to be effective following expiry of the first phase in May 2018.  A further report would be presented to Cabinet on the outcome of that procurement exercise.

The NWCF was a partnership between the six North Wales councils, of which Denbighshire had the lead role, and provided a streamlined and cost effective mechanism to secure contractors to build new schools and other public buildings.  There were currently six contractors on the NWCF with twenty projects being progressed across the region with a value in excess of £200m.  Details of Denbighshire projects had been included within the report together with community benefits secured under the NWCF with investment in local skills and the economy.  It was noted that 80% of the supply chain spending came from within a 30 mile radius of projects.  Reference was made to the existing NWCF arrangements and how to build on that success in terms of benefits and savings for the second phase.

Key changes to the new framework included –

·         reduction of the financial thresholds for contracts which would increase the number of local contractors on the framework

·         maximising delivery of community benefits such as training requirements and developing local supply chains, and

·         introducing a framework charging fee to reduce the cost of the framework to the local authorities, whereby contractors would be charged a fee per project won

Due to the increase in work involved it was proposed to expand the current team slightly and provision in the budget had already been made.  Finally reference was made to the Well-being Impact Assessment with a positive impact on all areas and a good sustainability rating.

Cabinet noted the success of the framework and commended the Framework Management Team who had won national awards for their work in the construction industry.  Members considered the approach to procure the second phase and discussed the following issues in more detail –

·         most of the current contractors were not based locally and it was explained that the framework had initially been established to deal with large projects for which many local contractors did not have the capacity to deliver.  However within the supply chain a significant amount had been carried out by local firms and much work had been carried out with local contractors to make it easier for them to be considered for contracts and develop local companies where gaps in the supply chain existed.  It was also anticipated that a significant number of local contractors would qualify for the framework as a result of the proposed reduction in the financial thresholds for contracts in the second phase

·         the current framework had been in operation since 2014 and the budget was considered adequate to manage the framework with no additional funding requested; the revenue allocated by the six local authorities was sufficient to cover the slightly enhanced Framework Management Team to assist with key changes.  There would also be capacity in the Design and Development Team to assist and in the event of any shortfalls additional resources could be commissioned on an ad hoc basis

·         when the framework was developed Welsh Government had concentrated on targeted recruitment and training and the framework had been set up to deliver those elements of community benefits.  There was flexibility with the framework to deliver physical community benefits which had been delivered in some cases, when appropriate, depending on the specific project and needs of the region

·         the proposed contract fee was discussed and it was suggested that the fee be charged at the end of the process for smaller companies in order to aid cash flow and ensure it was not a barrier to participation.  The Lead Member agreed to take the matter into consideration as part of the detail for the charging fee which would be included in the final document submitted to Cabinet following the procurement exercise

·         the framework had not been set up to generate income and the number of contracts was defined by the funding available, which had been predominantly from the 21st Century Schools Programme.  In the event of income generation monies would likely be used initially to reimburse local authorities for their annual fee with any additional monies being subject to recommendations from the Framework Management Board back to local authorities.  It would likely suggest investment in targeting the principles of the framework e.g. community benefits

·         the partnership was subject to an inter-authority legal agreement which included a mechanism and liability clause for those wishing to withdraw

·         officers confirmed that the framework was open to scrutiny to review, at any time, how the framework was operating or had done so in phase one.

RESOLVED that Cabinet –

(a)       endorses the approach outlined within the report to procure the next generation North Wales Construction Framework, and

(b)       confirms that it has read, understood and taken account of the Well-being Impact Assessment (Appendix 2 to the report) as part of its consideration.

At this juncture (10.50 a.m.) the meeting adjourned for a refreshment break.