Deed of Variation in relation to construction contract for the development at North Town

Location

Hampshire and Isle of Wight:

Description

Vivid intends to enter into a deed of variation with Hill Partnership Limited ("Hill"), the effect of which will extend the duration of an existing construction contract between Vivid and Hill (the "Underling Contract") by 100 weeks, and which will increase the value of the Underlying Contract by approximately £8,000,000 (eight million pounds).

Total Quantity or Scope

The Underlying Contract is in respect of a regeneration scheme in Aldershot for 215 dwellings consisting of houses, maisonettes and flats at North Town under a JCT Design and Build Contract. The variation is limited to the construction of 30 new homes and 1 community space under the Underlying Contract.

Award Detail

CPV Codes

• 45000000 - Construction work

Legal Justification

This VTN gives notice that Vivid is entering into a deed of variation (the "Contract") to award additional works to Hill. The estimated increase in the value of the Underlying Contract is estimated to be £8,000,000 (eight million pounds). A procurement procedure is not necessary on the basis that the award of the Contract is permitted pursuant to regulation 71(1)(e) of the Public Contracts Regulations 2015 (the "Regulations"). The Contract will award additional works to Hill and will have the effect of modifying the Underlying Contract in accordance with Regulation 72 of the Regulations. Whereas the Underlying Contract had an original value of £31,776,193.36 (thirty one million, seven hundred and seventy six thousand pounds and one hundred and ninety three pounds and thirty six pence across a full possible 143 week term, the Underlying Contract will be varied in order to extend the duration of the Underlying Contract by a period of 100 weeks, and the estimated value of the Underlying Contract is increased by £8,000,000 (eight million pounds). This modification is being made in accordance with regulation 72(1)(e) and 72(8) of the Public Contracts Regulations 2015. Namely, the proposed modification is not substantial within the meaning of regulation 72(1)(8) on the basis that: 1. the modification does not render the contract materially different in character - the proposed modification remains limited to the same type, scope and nature of works, and will be delivered in the same geographic region. There is just a small increase in the number of homes to be constructed by Hill. 2. the modification does not introduce conditions which would have (a) allowed for the admission of other candidates, (b) allowed for the acceptance of another tender, or (c) attracted additional participants in the procurement procedure - the change in value of the opportunity is not a significant change and is unlikely to have changed the outcome of the procurement. Further, the additional units to be constructed are located in a constrained site in close proximity to other phases which are still being completed by Hill, and this presents significant complexity of developing this Phase as a standalone project in light of those circumstances.. 3. The modification does not change the economic balance in favour of the contractor in a manner which was not provided for in the contract - Vivid has satisfied itself that the estimated compensation for the additional works are reflective of market costs and do not amount to an over-compensation of the works to be provided. 4. As per our comments at 1. above, the modification does not extend the scope of the contract considerably. For the reasons set out above, the proposed modification does not constitute a substantial modification and is permitted by regulation 72(1)(e) and 72(8) of the Public Contracts Regulations 2015. Hill are currently on site for construction works for an earlier phase of the development project and have a well-established site set up. As Hill are already set up and understand the difficulties and constraints of the site, if there were to be a change of contractor Vivid would face significant duplication of mobilisation costs and duplication costs in order for the new contractor to get up to speed with the site's difficulties and constraints. Part of the proposed works include the provision of open space which is currently being used by Hill as site set-up and as a compound. This area will not be released until completion of Hill's existing works. Given the location of the proposed works on the site, there is extremely limited space outside of the building footprint which can be used for site set-up. To build out the proposed works economically will require a delay to the open space construction of works already being provided by Hill, and the continued use of this area for site set-up, compound use and temporary accommodation.

Other Information

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