Decision details

To note the increased project costs; approve a virement; note the revised procurement strategy along with the intention to pursue a claim through a commercial settlement against the contractor’s Parent Company Guarantee (PCG).

Cabinet RESOLVED:

(1)        To note the background and current project position as set out in paragraphs 3.1 – 3.8 of the report and the way forward set out in paragraphs 3.9 – 3.12 of the report.

(2)        To note the increased forecast project costs of £17.3m as set out in paragraph 4.1 of the report as a result of the original contractor failure and the proposed resolution.

(3)        To approve the virement of the sum of up to £6.0m from the basic need capital grant to this project as set out in paragraphs 4.1 – 4.4 of the report to meet the increased forecast project costs.

(4)        To note that it was intended that such losses and costs, including the costs of re-procurement that had arisen as a result of the original Contractor’s default of its obligation, would be pursued to the extent possible under the Parent Company Guarantee. This value stood at £6.3m and was set out in paragraph 4.6 of the report.

(5)        To note that subject to (3) above the Strategic Director of Regeneration & Environment in consultation with the Cabinet Members for Schools, Employment and Skills would approve the award of a Medium Value Works Contract as set out in section 5.1 of the report.