Archived decisions
Hampshire County Council Buildings, Land and Procurement Panel Item 11 16 July 2004 Procurement Initiatives, Building Cost Trends and Project Approvals Report by the Director of Property, Business and Regulatory Services |
Contact: David Corcoran Ext: 7930 email: [email protected]
1 |
Summary |
1.1 |
The Executive Member for Policy and Resources approved at his meeting of 8 April 2004 the annual review of procurement initiatives for 2003/4 and a series of new initiatives to be implemented over the current financial year and beyond. |
1.2 |
This report seeks approval to a number of new initiatives and funding for projects that are proposed for the current financial year. This report also provides Members with examples of the construction costs for a range of major projects and explains the cost planning process that is used. This follows the request for information at the meeting of this panel on 24 March 2004. |
2 |
Additional Proposals |
2.1 |
Appendix 1 attached details a number of new initiatives related to the packaging of minor works, some of which will be procured through pilot framework arrangements and the development of key supply chains for mechanical and electrical services. The proposals are as follows: · Minor Works for Schools - Packaging Arrangements · Mechanical and Electrical Services Supply Chains · External Ramps and Hard Landscaping · Hythe Primary School - Hall and Kitchen Extension (Completion Contract) · Brookfield Community School - Schools Access Initiative · Brune Park Community School - Science Laboratory Refurbishments · Neville Lovett re-roofing and associated work · Oak Farm Community School - NDS Modernisation (Catering/Food Technology) · Woodlea Primary School - Extension |
3 |
The Cost Planning Process |
3.1 |
Cost planning is a structured approach to estimating project costs and is a valuable tool in the financial management of build projects. In the early stages of the design fairly simple calculations are used reflecting the limited level of information available at that time. This is usually based on a cost per square metre against the anticipated floor area and brief. This requires good professional judgement in deciding on the relevant cost benchmarks to use, based upon previous similar building knowledge and experience. As the design develops a more detailed process is used based upon building `elements' following a standard template. A typical cost plan includes the following key elements: Substructures (excavation work, foundations and ground floor) Structural frame and upper floors Internal and external walls Finishes (floor, wall and ceilings) Fittings and fixed furniture Mechanical and electrical services (on large schemes this is subdivided into a number of specialist elements) Hard and soft landscaping (external works) Drainage and incoming services (external works) |
3.2 |
At the Design Project Appraisal stage costs are prepared based upon the scheme design and include an allowance for all key elements (as above). Each cost plan includes an allowance for the main contractor's management staff, set up costs, overheads and profit margin and also for risk, which occurs in all building projects to a greater or lesser degree. At this stage it is usually possible to prepare fairly detailed estimates using historic cost information, market sources and/or published building price books. |
3.3 |
The Department has a large database of projects and benchmarks costs in order to establish value-for-money. External benchmarking is also used extensively through the services of the Department for Trade and Industry (DTI) and the Building Cost Information Service (BCIS), run by Royal Institution of Chartered Surveyors. The data collected is used by these organisations to generate national indices and establish regional trends. Nearly 50 major projects for the County Council have so far gone through the indexing process and the results demonstrate similarities with the national trends. |
4. |
Cost Trends for Major Schemes |
4.1 |
The table in Appendix 2 shows net costs (cost per square metre of gross floor area - excluding external works and abnormals) for a range of building projects all expressed at a common price base. This is part of the ongoing benchmarking process and a number of major initiatives have been shown to compare well with external benchmark information as demonstrated by the following examples: |
4.2 |
New Schools From the information show in Appendix 2 comparisons can be made between the net costs of new build school projects for the County Council and current DfES guideline figures (their publication entitled `Education Building Projects: Information on Costs and Performance Data' of April 2003). The price base used for all the net costs comparisons shown below is the fourth quarter 2003. Guideline prices have been adjusted to the same price base and the location factor for Hampshire. · DfES Guideline (Primary or Secondary) £1,232/m²
· Hampshire equivalent (average of 5 Schemes) £1,280/m² (4% variation over DfES Benchmark) |
It should be noted that the DfES Benchmark draws on real data from recent and past completed Schools. There is usually a `time lag' before the index catches up with the latest legislative requirements for school building design. In addition Hampshire's core brief for schools exceeds the minimum requirement of the DfES benchmark, therefore additional specialist facilities such as IT Suites and Music Drama spaces are included as standard. Both of these factors would go some way to explaining the marginal premium that the County Council Schools experience. | |
4.3 |
New Opportunities Fund (NOF) Sports Halls |
A comparison between four NOF schemes, being developed with a preferred contractor, the Sport England `Optimum Sports Halls' Solution and a sample of external projects featured by the BCIS shows that the standard sports hall solution is proving to be cost-effective: · NOF schemes (average of 4 projects) £1,016m² · Sport England Optimum £1,060/m² · External schemes (average) £1,017/m² · Recro Structures (equivalent scheme) £1,066/m² (inclusive of fees) The above indicates a positive outcome from the NOF strategy. Better value could have been achieved but the protracted NOF approval process prevented the maximisation of the benefits of the procurement process. Recro (above) recently offered their product to the Perins School as alternative systemised `turn key' solution. This contractor has however recently ceased trading. |
4.4 |
Nursing Care Initiative Strategy (NCIS) | |||||
The six projects which are underway are benchmarking well in terms of their general price levels and net costs. | ||||||
Current DTI and BCIS indexing shows the NCIS projects to be at or below expected price levels for major projects. Furthermore the schemes have been analysed in detail by the quantity surveying framework consultant Davis Langdon (DL). DL are a national practice with a large database of construction project costs. DL have recently been requested to run two benchmark comparisons on the NCIS. The first was against the net costs of recently tendered similar projects and the second to independently re-price the NCIS schemes using current market rates. The results of these exercises are encouraging and provide further evidence of the value-for-money being achieved. The NCIS is being procured through the Framework Agreement for Major Schemes and involves a major supply chain strategy for all the commonly procured items. The following comparisons may be drawn: · NCIS (net cost) £1,241/m² ( average of 6 schemes) · DL national database (net cost) £1,432/m² ( average of 6 schemes) · DL cost model (net cost) £1,505/m² ( NCIS specification) | ||||||
5 |
Fire Damage Reinstatement | |||||
5.1 |
The purpose of this section of the report is to advise Members of a package of fire reinstatement works that have been implemented following a fire that broke out during the night of 18 January 2004 at Nightingale Primary School, Eastleigh. The fire destroyed the kitchen block and contaminated the rest of the school with smoke. The Chief Executive's department has authorised the Director of Property, Business and Regulatory Services to undertake a package of fire reinstatement works and that the cost be a charge against the County Council's Fire Reinstatement budget. The fire damage works comprised major works to the kitchen including the provision of a new roof structure and covering, the replacement of internal components and fixtures and fittings. A temporary kitchen facility has also been provided together with a further temporary building to allow phased decanting of the main school building whilst removal works to smoke damaged areas of the school took place. Extensive remedial works were also carried out to the main school building which was severely smoke damaged. This work included renewal of suspended ceilings, lighting, decoration and floor finishes. The estimated value of the work is £450,000, excluding fees, and has been undertaken by Tew Bros Ltd. This contractor has considerable experience in this type of work and has undertaken similar fire reinstatement projects for the County Council in the past. | |||||
6.0 |
Project Approvals | |||||
6.1 |
A programme of works for the New Deal for Schools Condition Funding 2004-05 allocation has been approved in two tranches, and a range of other, mainly non-educational, projects was approved for inclusion in the programme of major and capital works following the Buildings, Land and Procurement Panel in March 2004. Approval is now sought for the following education/non-education projects to proceed, including projects funded from the capital programme provision for office accommodation, in support of newly acquired leasehold properties in Winchester: | |||||
Up to £100,000 | ||||||
Improvements to Athelstan House |
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Elizabeth II Court - roof repairs |
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Building and engineering works at Regency House |
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Replacement boilers at Nightingale Lodge |
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Cambridge Road Children's Home- window replacement |
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Milesdown Children's Home - replacement of underfloor heating |
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Winchester Crown Courts - replace cooling tower (costs recoverable from Court Service) |
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Elizabeth II Court - replace switch gear |
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Waterlooville Library - lift refurbishment |
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Rookwood Phase II - replacement of windows |
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Staunton Country Park - general repairs |
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Clarendon House- structural repairs |
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Manor and Grange Infant Schools - structural repairs |
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Alton Infant - new gas and water mains |
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£100,000 to £200,000 |
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Bishops Waltham House - window replacement |
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Jermyn's House - drainage modifications |
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Copper Beeches - window replacement |
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Building and engineering work at Capitol House |
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Chrismas Lodge - refurbishment |
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Cherry Orchard - window replacement |
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Queen Elizabeth Country Park - wood burning boiler |
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Eastleigh House - building modifications |
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Elizabeth II Court - office refurbishment |
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South Baddesley Primary School - contribution to Phase 1 |
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£200,000 to £500,000 |
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South View Infant School - SCOLA re-cladding |
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Recommendation(s) | |
That the Panel advices the Executive Member for Policy and Resources that approval be given to: | |
1 |
The procurement initiatives set out in Appendix `1' relating to: · Minor Work for Schools - Packaging Arrangements · Mechanical and Electrical Services Supply Chains · External Ramps and Hard Landscaping · Hythe Primary School - Hall and Kitchen Extension (Completion Contract) · Brookfield Community School - Schools Access Initiative · Brune Park Community School - Science Laboratory Refurbishments · Neville Lovett re-roofing and associated work · Oak Farm Community School - NDS Modernisation (Catering/Food Technology) · Woodlea Primary School - Extension |
2 |
That the information on cost planning and cost trends be noted. |
3 |
The projects listed in 5.1. |
4 |
The action being taken following the fire at Nightingale Primary School. |
Section 100 D - Local Government Act 1972 - background papers
The following documents disclose facts or matters on which this report, or an important part of it, is based and has been relied upon to a material extent in the preparation of this report.
NB the list excludes:
1 Published works
2 Documents which disclose exempt or confidential information as defined in the Act.
TITLE LOCATION
None
BLPP0704E Procurement Initiatives & Appendix 1
Procurement Initiatives 2004/2005 Appendix 1
Additional Proposals
Minor Work Packaging Arrangements
A procurement strategy is proposed to package repetitive work at schools, which is generally funded by the schools themselves and through funding strategies such as the New Deals for Schools. The aim is to create a standardised approach to this work involving common supply chains, specifications and detailing. This will to offer an improved service to the schools by simplified management arrangements, speeding up turn around times (programmes) and achieving better value for money through economy of scale.
Based on the last two financial years typical works are likely to include a number of common themes:
· Toilet and Changing Room Areas (new spaces and improvements)
· Reception and Office Areas
· Library and ICT Suits
· Minor improvements to classrooms, staff rooms and associated spaces
These packages will also include an element of other minor work and responsive maintenance work.
It is proposed to introduce trial arrangements with preferred contractors and initial bids will be invited on a best value selection process involving a short list of 3 firms for 2 trial packages. The initial pilot packages are proposed to run for a period of between three and six months and are likely to be worth in the region of £250,000 each. Future reports to this panel will review the success of the arrangements and longer-term framework contracts can then be considered.
Mechanical and Electrical Services Supply Chains Development
Following the successful launch of the major frameworks a strategy for the introduction of complementary key supply chains is being developed. Initial focus is being given to mechanical and electrical services, which can account for up to 30% of overall construction costs. Six preferred mechanical and electrical firms have been chosen to participate in the development work. The firms have been chosen as they all have direct experience of partnership working for the County Council and have performed well on the projects they have had involvement with:
· NG Bailey and J& B Hopkins - NCIS key supply chains
· Emcor and Churches - major Term Engineering
· ARB and Reavey - partnership projects through preferred main contractors
Initially existing arrangements will be utilised to begin the development work and later pilot arrangements for the new supply chain partnerships will be tested with some of the firms. Further reports to this panel will report on the progress with this initiative and subject to a successful trial, a procurement process following European procurement rules will be proposed to introduce longer term supply chain partnerships.
External Ramps and Hard Landscaping
A pilot framework agreement for 24 minor external paving, ramps and resurfacing projects at schools has been competitively tendered ins two packages (each to a shortened list of three firms). Package one comprises work in central and north Hampshire and package two south Hampshire. The works will commence at the end of this July and all projects will be completed by March 2005. The initial phase of work under the Schools Access Initiative needs to be complete before the start of the next academic year.
Since preparing the first tender pilot a further 9 Schools Access Initiative ramp projects have been identified and it is proposed that the initial package of work is enlarged to include these by negotiation with the successful contractors:
· Abbotswood Junior £6,000
· Fordingbridge Junior £2,500
· Holbrook Primary £3,000
· Locks Heath Infant £3,000
· Lymington Junior £5,500
· Ranvilles Infant, Fareham £5,500
· Ranvilles Junior, Fareham £5,500
· Denmead Junior £7,825
· Morelands Primary, Purbrook £18,260
Subject to the success of these arrangements they may be extended into by a longer-term agreement to undertake similar work. Further reports to this panel will consider this proposal. The initial enlarged package of work is worth about £290,000 overall.
A number of further minor projects are being developed for a number of schools including: play grounds work, car park spaces and general resurfacing which it is proposed are added to the arrangements once the schemes have been fully developed :
· Anton Infant, Andover £21,000
· Roman Way Primary, Andover £25,000
· Stoke Park Infant, Eastleigh £11,000
· Weeke Primary, Winchester £24,000
· Whitchurch Primary £20,000
In view of the potential volume of work there is the potential to develop the framework arrangements further. The success of these arrangements will be reviewed over the first 6 months. Each package will be assessed against key performance indicators. It may also be necessary to increase capacity to deliver an increased workload as the arrangements develop. The second place contractor for the north and central package who were also very competitive give the potential for the development of a third framework arrangement . A third framework through this contractor is therefore proposed subject to the need to generate further capacity.
Hythe Primary School - Hall and Kitchen Extension (Completion Contract)
Following the original contractor Leonard Field going into receivership, it is proposed to appoint Benson (second lowest original tenderer and lowest offer received by the receiver) as completion contractor. The value of work to complete is £575,000.
Brookfield Community School - Schools Access Initiative
A package of work is planned under the Schools Access Initiative providing a new hygiene, therapy and SEN rooms . There is also a new lift proposed to an existing SCOLA building along with powered doors and other improvements. The project is worth approximately £500,000 and the new facilities are required for the start of the 2005 academic year. It is proposed that project is negotiated with Brazier who are in the final stages of a major partnered scheme at the same site and the intention would be to use their existing team for this project which would be a partial continuation of the existing arrangements.
Brune Park Community School - Science Laboratory Refurbishments
NDS Modernisation work at Bridgemary Community School was reported to Executive Member Education on 13 May 2004 and Executive Member Policy and Resources on 08 April 2004.
Brune Park School have requested the refurbishment of two Science Labs to be funded primarily by the school with a contribution from Policy and Resources. The current cost estimate is c. £134,000 inc. fees. It is proposed that the work at Brune Park School is negotiated with the successful contractor from the competitively tendered Bridgemary School contract, namely Mansell Construction Services Ltd.
The Neville Lovett Community School and CEC
It is proposed to procure re-roofing works and refurbishment of windows to D Block by negotiation with Survey & Construction (Roofing) Ltd, who are the current roofing framework contractor. The roofing works include the provision of high quality insulated flat roofing and a cellular PVC shiplap fascia boarding including insulation and will be based on the rates in the roofing framework contract. This work is estimated to cost £97,000. Whilst the scaffolding is erected the existing windows will be refurbished by a specialist window sub-contractor. This work is estimated to cost £3,000 The overall estimate cost is £100,000 and the works will be undertaken during the summer to minimise disruption to the school.
Oak Farm Community School - NDS Modernisation (Catering/Food Technology)
NDS Modernisation work at Cove School and Fernhill Community School has been negotiated with Nolan Davis Contracting Ltd following approval from Executive Member Policy and Resources on 08 April 2004 Works are due to commence 05 July 2004.
Further NDS Modernisation work to refurbish a catering/food technology room is now proposed at Oak Farm Community School. The works are to be funded primarily from the NDS Modernisation budget plus school contributions if necessary. The current cost estimate is between £80,000 and £90,000. It is proposed that the works are negotiated with Nolan Davis Contracting Ltd based upon the recently completed negotiations for the Cove and Fernhill package of works.
Woodlea Primary School - Extension
A new extension is planned under the Seed Challenge Initiative. There are advantages in involving a preferred contractor in the development of the scheme and undertaking key activities over the summer holiday period. It is proposed to negotiate this scheme with Gregory Havant who have undertaken many similar schemes successfully with the same architectural team. The estimated value of the work is £120,000.