PEOPLE’S AUDIT RESPOND IN OPEN LETTER TO COUNCIL’S CHIEF EXECUTIVE – MILLIONS “POTENTIALLY WASTED” ON FENWICK CONTRACT

People’s Audit Lambeth have responded to a reply from Lambeth’s interim chief executive over  concerns they raised about the way the development management contract for the Fenwick estate near Clapham South – the second highest of four tenders received and nearly £8 million higher than the council had originally anticipated – was given.

An Open Letter

Dear Mr Travers,

I acknowledge receipt of your e-mail dated 8th March 2018.

You may not be aware but I am a quantity surveyor with 30 years’ experience and I have to say that I find the contents of your e-mail do nothing to address my concerns.

The Fenwick procurement process has wasted hundreds of thousands of pounds in abortive costs and potentially millions in regard to the contract award. Your response does not at any point suggest what Lambeth council intend to do to address this waste of council taxpayers’ money.

In response to the points you raise in your e-mail:

Quality

Procurement should be about objective decision making that stands up to scrutiny. The split of 30/70 in terms of price/quality is highly irregular. Please demonstrate the following:

How quality was scored objectively.

In the procurement strategy it is stated as justification for choosing the 30/70 price quality split that “by choosing the right team now, significant savings can be made during delivery”. Please demonstrate how Mace’s tender, which was nearly £6M more expensive than Karakusevic Carson’s, would have generated £6M of savings which could not have been achieved by choosing Karakusevic Carson.

Provide evidence (not opinion) that Karakusevic Carson could not have delivered the scheme for the price quoted.

Scoring

I note from Karakusevic Carson’s particulars of claim that they state that the scoring criteria for the tenders was changed after tenders were submitted. Is this true? If it is then this is of serious concern.

I cannot comment on your statement with regard to scoring without seeing the details. However, it is clear to me that the fact that you have five pricing scores demonstrates how out of control the procurement process is. It is evident from this that Lambeth have not clearly defined in the tender documents the end product that they want to purchase.

Budget

You state that one of the reasons that the winning bid was nearly £8 million higher than estimated is that the procurement strategy assumed work would be carried out to RIBA stage 3 whereas the tenders were based on RIBA stage 4. The obvious questions that spring to mind are:

This statement demonstrates a lack of control over the tender process. How were officers allowed to procure a service which was not in accordance with the procurement strategy?

The change from RIBA stage 3 to 4 in no way accounts for an additional £8 million of work. What effect does the tenders being so much over budget have on the viability of the scheme and the number of social housing units that will be delivered by the scheme?

Given that the design management costs for 4 other estates (Cressingham Gardens, Knight’s Walk, South Lambeth and Westbury) were awarded for between £2.3M and £6.7M how can Mace’s bid of £12.9M be value for money?

Alleged conflict of interest

I cannot comment on this without seeing further details.

Transparency

The fact that I only discovered what had happened on the Fenwick estate procurement as a result of Lambeth inadvertently sending me information does raise the question of what is happening elsewhere with Lambeth’s procurement. How widespread is this problem? I believe the taxpayers of Lambeth have a right to know.

I look forward to receiving your response.
Yours faithfully, Simon Morrow Director-Lambeth People’s Audit

Further reading: LAMBETH – FINALLY – ANSWER SOME QUESTIONS!!!  “I understand your concerns over the large difference between the original estimate and the tender prices” council’s chief executive tells People’s Audit on Fenwick estate contract – March 9th 2018-03-20

LAMBETH TO SPLURGE £15 MILLION ON CENTRAL HILL…FOR A ‘DEVELOPMENT MANAGEMENT TEAM’ Call-in by councillor refused – as People’s Audit Lambeth raise “serious concerns” over tendering process for second estate – March 6th 2018

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