PAPER D

Purpose : For Decision

Committee :    EXECUTIVE

Date :              16 JULY 2002

Title :              CAPITAL STRATEGY : PROPOSED TRANSFER OF PROCUREMENT FOR CAPITAL PROJECTS THROUGH CONSTRUCTIONLINE

PORTFOLIO HOLDERS - RESOURCES AND TRANSPORT

SUMMARY/PURPOSE

The Executive is being asked to consider replacing the Council’s existing selective tender lists for building and civil engineering consultants and contractors with a scheme called Constructionline, which is a nationwide register of qualified construction services, being managed and maintained by the Government. As part of its Modernising Agenda the use of Constructionline is being promoted by the Government under the ‘Rethinking Construction’ agenda and Best Value initiatives.

BACKGROUND

Current Selective Tender Lists

The Council currently maintains its own selective tender lists for consultants and contractors for building and civil engineering works for the procurement of the Capital programme.

The lists are renewed every three years and are due for renewal in 2004, with the exception of the building contractors list, which is due for renewal in August 2002.

Constructionline

Constructionline is a register of approved contractors developed through a public private partnership between The Department of Trade and Industry and Capita. It is designed to streamline the pre-qualification and procurement procedures by supplying the construction industry and its clients with a single national qualification system.

Over 10,000 contractors and consultants are registered with Constructionline who have all met the pre-qualification requirements.

Constructionline now has some 1,300 clients using the service ranging from central Government, Local Authorities, universities/ further education and NHS Trusts.

Benefits of Using Constructionline

1.        Helps achieve Best Value by freeing up valuable resources and streamlining the procurement process, by delivering an efficient and effective service.

2.        Saves time and money by removing the need to compile and manage in-house selective tender lists.

3.        Consultants and contractors are vetted according to strict management, technical, financial and health and safety criteria laid down by The Department of Trade and Industry. All consultants and contractors must meet the pre-qualification criteria before they can be included on the Constructionline database.

4.        All information held by Constructionline is relevant and up to date. Accounts, certificates and company policies are reviewed annually. A complete assessment of firms registered is carried out every 2-3 years, maintaining the Council’s requirement for auditability and accountability in the procurement process. Any notices of liquidations, receiverships or irregularities are immediately updated on the database.

5.        Provides a national central electronic database of information on-line, giving access to up-to-date details of consultants and contractors, including track record details, covering a whole range of construction services. Full support is provided via the Internet or telephone helplines.

6.        Constructionline is currently a free service to the Council.

Implementing the Change to Constructionline

1.        All consultants and contractors on the Council’s current selective tender lists would be notified of the Council’s intention to use Constructionline services and recommended to join Constructionline.

2.        The Council’s selective tender lists will be forwarded to Constructionline who will invite consultants and contractors to register with them. This process will take approximately four months. During this period the Council’s existing selective tender lists will be used to procure construction services.

3.        Constructionline will notify the Council when all consultants and contractors have been assessed and included on their database. At this point all consultants and contractors will be selected from the Constructionline database and the Council’s current selective tender lists would no longer be used.

4.        This raises the prospect of local firms who are unwilling to fund the required fee to Constructionline, being excluded from the Constructionline database. The Council will therefore be unable to employ their services. On balance it is not unreasonable for them to consider this as a normal business cost. Appendix A details Constructionline’s schedule of fees.

OUTCOME OF CONSULTATIONS

Consultations have taken place with the Council’s Audit Section, Health and Safety Advisor and colleagues in Highways and Property Services. Comparisons have been made between the Council’s existing procedures and Constructionline’s pre-qualification questionnaires. All have agreed that both pre-qualification questionnaires are comparable and the services offered by Constructionline represents Best Value.

The Council’s Standing Orders dated 20 March 2002, Section 2.15, encourages the use of Constructionline for the procurement of works contracts.

The Health and Safety Executive is satisfied with the evaluation of Health and Safety matters.

The Construction (Design and Management) Regulations are not sufficiently covered in Constructionline’s questionnaire. To overcome this, a CDM questionnaire would be sent to all consultants and contractors tendering for capital projects for return with the tender documents for assessment. This procedure has been endorsed by the Council’s health and safety advisor.

Access to Constructionline’s database via the Internet has been approved by the Council’s Head of Information and Communications Technology Services.

FINANCIAL IMPLICATIONS

1.        Constructionline is currently a free service to the Council and will save approximately £12,000 per year in maintaining in-house selective tender lists for consultants and contractors.

2.        Consultants and contractors who would like to be included on Constructionline’s database, will be expected to pay an annual fee to Constructionline ranging from £83 to £1,498. The fee payable will depend on the number of professional and technical staff employed by consultants and company turnover for contractors.

OPTIONS

1.        That the Council moves to using Constructionline for the procurement of building and civil engineering services for the Council’s Capital programme.

2.        To continue to manage and maintain the Council’s current selective tender lists for consultants and contractors at an annual cost of £12,000.

RECOMMENDATIONS

Option 1.

BACKGROUND PAPERS

Sir John Egan’s Report on “Rethinking Construction”.

Contact Point : Mike Cesar, ☎ 823259 and Phil Hayward, ☎ 823569

APPENDIX A

Constructionline

Schedule of Fees

Fees for contractors are based on the turnover of the company.

Fees for consultants are based on the number of professional and technical staff.

These fees have been agreed with the Department of Trade and Industry (DTI), to represent a worthwhile investment for all sizes of company.