Agenda item

The report provides an update on the current position regarding the design and build contracts relating to the expansion of Uxendon Manor and Elsley Primary Schools and seeks approval on the way forward.

RESOLVED that:

i)     Cabinet noted the current status and contractual position with Lakehouse Contracts Ltd on the two design and build contracts for Uxendon Manor Primary School and for Elsley Primary School.

ii)    Cabinet noted the activities being undertaken to secure completion of the works at Uxendon Manor Primary School under the Parent Company Guarantee.

iii)   Cabinet delegated authority to the Strategic Director of Resources in consultation with the Director of Legal and HR Services and Chief Finance Officer to terminate the high value works contract for Uxendon Manor Primary School in the event that reliance on the Parent Company Guarantee is not practicable or Officers conclude reliance on the Parent Company Guarantee/s is not in the Council’s interest.

iv)   Cabinet noted that officers were reviewing procurement options for the outstanding works at both schools should it not be practicable or appropriate to secure further works under the Parent Company Guarantee at Uxendon Manor Primary School or under the existing contract at Elsley Primary School.

v)    Cabinet approved the waiving of contract standing orders to permit a quote process or direct award to select an alternative contractor for Uxendon Manor Primary School and for Elsley Primary School should other procurement options not permit works to be completed by September 2019.

vi)   Cabinet noted that subject to recommendation v)  above, the Strategic Director of Resources would approve the award of one or more Low and/or Medium Value Works Contracts should it be required using powers delegated under the Constitution.

vii)Cabinet noted that Officers would review options for the recovery of any wasted or additional costs against Lakehouse Contracts Limited and/or parent company as described in Appendix 1 to the report from the Strategic Director of Resources.

Councillor Margaret McLennan, Deputy Leader, introduced the report updating the Cabinet on the  contractual position on the design and build contracts for the expansions of Uxendon Manor and Elsley Primary Schools and seeking authority to undertake certain actions to ensure completion of those works.

The report detailed that the Council had entered into design and build contracts with Lakehouse Contracts Limited (“Lakehouse Contracts”) for Uxendon Manor Primary School as part of the Phase 3 Primary School Expansion Programme on 26 January 2017 and for Elsley Primary School on 20 May 2016. In both cases there had been significant delays in the completion of works which the contractor had attributed to severe financial difficulties. It was currently expected that the works at Elsley Primary school would be completed in February 2019.  For the works at Uxendon Manor Primary School, the council had entered into a Parent Company Guarantee (PCG) with  Lakehouse PLC (now known as Sureserve Group Plc) (the `Guarantor`) on 25 May 2018. Under the terms of the PCG, the Guarantor must immediately upon the Council’s demand, perform and fulfil the obligations the Contractor had failed to comply with. Given the contractor’s failure, Officers had commenced actions to enforce the PCG. However, if the Guarantor could not or would not honour PCG, Cabinet authority was needed to terminate the high value contract.

RESOLVED that:

i)     Cabinet noted the current status and contractual position with Lakehouse Contracts Ltd on the two design and build contracts for Uxendon Manor Primary School and for Elsley Primary School.

ii)    Cabinet noted the activities being undertaken to secure completion of the works at Uxendon Manor Primary School under the Parent Company Guarantee.

iii)   Cabinet delegated authority to the Strategic Director of Resources in consultation with the Director of Legal and HR Services and Chief Finance Officer to terminate the high value works contract for Uxendon Manor Primary School in the event that reliance on the Parent Company Guarantee is not practicable or Officers conclude reliance on the Parent Company Guarantee/s is not in the Council’s interest.

iv)   Cabinet noted that officers were reviewing procurement options for the outstanding works at both schools should it not be practicable or appropriate to secure further works under the Parent Company Guarantee at Uxendon Manor Primary School or under the existing contract at Elsley Primary School.

v)    Cabinet approved the waiving of contract standing orders to permit a quote process or direct award to select an alternative contractor for Uxendon Manor Primary School and for Elsley Primary School should other procurement options not permit works to be completed by September 2019.

vi)   Cabinet noted that subject to recommendation v)  above, the Strategic Director of Resources would approve the award of one or more Low and/or Medium Value Works Contracts should it be required using powers delegated under the Constitution.

vii)Cabinet noted that Officers would review options for the recovery of any wasted or additional costs against Lakehouse Contracts Limited and/or parent company as described in Appendix 1 to the report from the Strategic Director of Resources.