The importance of building new homes for a rising population has recently overshadowed the need to protect our culturally and historically significant buildings. Despite this, public funding is available, resulting in projects which may fall within the Public Contracts Regulations 2015. The impact of these on such projects must be fully understood by all parties involved.
Heritage buildings which are at risk are, by definition:
- Publicly declared to be of historic and/or cultural significance and requiring preservation and/or restoration;
- badly neglected and in need of urgent repair; and
- difficult, potentially impossible, to restore or regenerate sensitively and profitably, without the aid of substantial public subsidy - in other words, burdened with conservation deficit.
In these situations potential sources of subsidy are the Heritage Lottery Fund and, increasingly, local enterprise partnerships, to the extent that these projects create new employment and potential for inward business investment. Other funders might include Homes England (formerly the HCA) if a residential scheme is envisaged, or the Arts Council if it’s a museum or an arts venue that's proposed.
Majority public funding creates, essentially, a public project for the general good, even if the developer is a private company or a charity. This in turn means that the relevant works and services must be procured competitively, in accordance with the principles of transparency and non discrimination that underpin the Public Contracts Regulations 2015. If the value in each case exceeds a certain threshold (for services, currently £106,047 for central government bodies, £164,176 for local authorities and other non-central public and quasi-public bodies; for works, £4,104,394 in all cases), each contract must be advertised and procured in accordance with one of the specific procedures set out in the Regulations: restricted procedure, competitive dialogue, competitive procedure with negotiation and (exceptionally) negotiated procedure with or without advertisement.
To understand how the Regulations will shape works and services procurement, some basic questions must first be answered about the project's overall structure: What design and technical services are required? How many works packages? Should they be broken down into two, maybe three in sequence? For example:
- Decontamination and site stabilisation;
- emergency repairs and building stabilisation;
- commercial redevelopment: internal conversion, infrastructure, public realm.
There may be a case for separate procurement of separate specialist contractors - if, for example, funding is to be drawn from a range of sources over time, and a step-by-step approach is to be taken. There may be a case for bundling these elements into a single phased contract, if the developer has the finance and the resources to adopt a "big bang" approach - an example might be a university with an ambitious plan to create a new campus as part of a wider city regeneration strategy.
Once the decision has been made as to the sequencing and content of each contract, the decision then has to be made as to which procedure best fits with the developer's preferred strategy. Some sort of site survey, statement of technical requirements and a cost plan, may need to be commissioned informally, in order simply to get the show on the road. Beyond that, the first contracts that will need to be procured by explicit reference to the Regulations will be for a combination of design and technical services: an environmental/geotechnical engineer to investigate and advise on site conditions; an architect to consider design feasibility and to masterplan the site; a civil/structural engineer to support conceptual design; and a cost consultant to number-crunch and advise on the state of the regional construction market. It's probably reasonable for the developer to regard these as separate service requirements, the cost of which at feasibility studies is in each case likely to be below £164,176. But the first and critical question has to be, how should the professional and technical services be configured so as best to serve the needs of the project?
Continuity is desirable - retaining the same design team through to project delivery for the sake of consistency of design approach, control of intellectual property and overall cost effectiveness – in which case, the developer needs to get the right team in place, first time. Configuration is also important: on a higher-value project (above, say, £20 million), an appointment of a large-scale, multidisciplinary consultancy may be advantageous, but this would probably exclude from consideration talented smaller firms. A consortium approach, in which bids are invited from alliances of separate firms, would enable an integrated approach but would leave the developer with responsibility to enter into separate consultants' appointments limiting the scope of services (and liability) to each consultant's particular discipline. A third possibility is to appoint a single lead design consultant to take overall responsibility for design delivery while subcontracting different elements to sub-consultants.
Each approach has its pros and cons, but in every case there is a need to define, and then advertise up-front, a set of design and technical requirements to govern a longer-term project. There is a need to plan and conduct a rigorous, competitive procurement exercise, in which the track record and resources of bidding parties can be examined, and the distinctive methods and philosophies that bidders will bring to bear are considered and evaluated competitively and objectively. The devising a suite of contract documents, evaluation methodologies and scoring systems that are user-friendly and transparent, is not an easy task.
In part three of this series of heritage articles, we will examine in more detail how the different procedures available under the Public Contracts Regulations 2015 – restrictive, competitive dialogue procedure, restricted procedure, competitive procedure with negotiation – each governs and guides the procurement of the works and services contracts required to deliver a successful, complex heritage project.
This article is taken from Building Interest - Spring 2018.