RegenerationMK

Concepts

• construction work
• milton keynes
• regenerationmk
• building construction
• refurbishment work
• repair and maintenance
• property management
• real estate
• architectural services
• fee or contract basis

Location

Milton Keynes

Description

To secure a long term strategic partner to work with Milton Keynes Council (now Milton Keynes City Council) (the "Council") and other legal entities connected to or forming part of the Council to deliver maintenance and improvements to the Council's social housing portfolio and other assets, and further enable the development a Regeneration programme of refurbishment, new build housing and other new build assets as part of a wider place making strategy. On 29 March 2016, the Council entered into partnership agreement to deliver the regeneration programme which was delivered through a joint venture company YOURMK LLP. The partnership agreement was terminated in 26 March 2021 and YOURMK LLP was wound up on 26 April 2022. On 29 March 2016, the Council and Mears Limited entered into two separate contracts in respect of the Council's maintenance programme for existing social housing and other assets being a Term Partnering Agreement for the provision of repairs and maintenance services (the "TPA") and a Project Partnering Agreement for the provision of planned repairs and maintenance services (the "PPA"). The term of the TPA commenced on 1st April 2016 and expired on 31 March 2021 with an option, at the Council's discretion, to extend for a further period or periods of up to ten years in duration. The term of the PPA also commenced on 1st April 2016 and expired on 31 March 2021 with an option, at the Council's discretion, to extend for a further period or periods of up to ten years in duration. On 30 September 2020, having exercised its option to extend both contracts, the Authority entered into deeds of variation to the TPA and the PPA to extend the terms of both contracts for a further of three years commencing on 1 April 2021 and ending on 31 March 2024.

Ammendments to Previous Notice

Award Detail

CPV Codes

• 45000000 - Construction work
• 45210000 - Building construction work
• 45453100 - Refurbishment work
• 50000000 - Repair and maintenance services
• 70330000 - Property management services of real estate on a fee or contract basis
• 71200000 - Architectural and related services

Indicators

• Contract modified due to unforeseen circumstances.

Legal Justification

The reason for this modification is to allow the Council to instruct Mears to carry out works to its social housing under the TPA and the PPA for a period of one year. The Council is restructuring the way it commissions its housing repairs and maintenance services and will be carrying out a re-procurement in 2024. The requirements of Regulation 72(1) (c) are met as follows: Need for modification brought about by circumstances which a diligent contracting authority could not have foreseen: The Council has faced increased costs due to the rises in interest rates and inflation which were not foreseeable at the time that the PPA and the TPA were entered into. In addition, the state of repair of the Council's housing stock has deteriorated at a faster rate than was expected when the contracts were entered into and/or have unforeseen health and safety issues that need to be addressed. This concurrence of the unforeseeable increases in inflation and interest rates with the expedited deteriorations in the Council's housing stock has led to a set of financial circumstances and service requirements which could not have been diligently foreseen by the Council. The following circumstances were not foreseen by the Council: 1. Revenue spend for the Council is significantly higher due to increased demand for repairs and property related above expected forecasts, coupled with inflationary pressures. 2. As part of the unpredicted energy crisis, the Council brought forward its future gas boiler replacement programme to help reduce the impact of the crisis on our tenants by installing more energy efficient boilers. 3. The deterioration of some of the Council's assets is ahead of forecast which has involved the need for additional inspections and localised repairs ahead of planned lifecycle repairs. 4. The impact of increasing regulation and standards of compliance has increased the levels of works needed to replace fire doors and compartmentation in order to ensure that the Council's assets are compliant. 5. The Council has brought forward electrical checks within individual homes from a 10-year inspection cycle to a 5-year cycle ahead of future regulation. 6. Some of the Council's properties and external elements, such as roofs, are failing at a rate faster than the Council's lifecycle plans. The Council has also seen an increased number of fire damaged properties or properties, which are works that will be carried out during 2024/25. Modification does not alter the overall nature of the contract: The scope and nature of the works that the Council will instruct Mears to carry out under the TPA and the PPA during the extension period has not changed. The reason for the modification is that the projected volume of works required under both contracts and their associated costs have increased as detailed above. Increase in price does not exceed 50% of the value of the original contract. The value of the works that Mears will be instructed to carry out under the PPA and the TPA during the extension period total between £20,000,000 to £25,000,000 (excluding VAT) which is less than 50% of the anticipated value over the initial five year term as set out in the advertised contract notice (£130,000,000 excluding VAT) which was broken down as follows: • Repairs and Maintenance (including refurbishment) - GBP 10 to GBP 12 million per annum. • New Build - GBP 12 to GBP 14 million per annum. • Share of surplus generated from new build opportunities. and is less than 50% of the value of the original contract as set out in the contract award notice (£130,000,000 excluding VAT).

Other Information

Contract value was broken down over the initial five-year term of the TPA and the PPA as follows: • Repairs and Maintenance (including refurbishment) - GBP 10 to GBP 12 million per annum. • New Build - GBP 12 to GBP 14 million per annum. • Share of surplus generated from new build opportunities.