Description: COAT-ARM Hastings District Council

 

Civic Administration Building

Lyndon Road East, Hastings

Phone:  (06) 871 5000

Fax:  (06) 871 5100

WWW.hastingsdc.govt.nz

 

 

 

 

Open

 

A G E N D A

 

 

Tenders Subcommittee MEETING

 

 

 

Meeting Date:

Thursday, 9 November 2017

Time:

9.00am

Venue:

Landmarks Room

Ground Floor

Civic Administration Building

Lyndon Road East

Hastings

 

Subcommittee Members

Chair: Councillor Travers

Acting Mayor Hazlehurst

Councillors Lyons, Nixon, Redstone and Watkins (Deputy Chair)

Chief Executive and Group Manager: Asset Management

 

Officer Responsible

Executive Advisor/Manager: Office of the Chief Executive

(Mr M Maguire)

(Quorum = 4)

Committee Secretary

Carolyn Hunt (Extn 5634)

 


Tenders Subcommittee – Terms of Reference

A Subcommittee of the Works and Services Committee

 

Fields of Activity

The Tenders Subcommittee is responsible for assisting council in its general overview of procurement and tender activity by accepting tenders which exceed the Chief Executive’s delegated authority to approve, for projects previously approved by Council or a Standing Committee within the delegated authority.

Membership

Chairman appointed by the Council

4 members appointed by the Council

Chief Executive

Group Manager: Asset Management

 

For the avoidance of doubt the references in this delegation to the ‘Chief Executive’ and ‘Group Manager: Asset Management’ extends to include any persons from time to time appointed in writing to those roles in an acting capacity.

 

Quorum – Any four members.

 

Delegated Powers

Authority to accept tenders for individual projects previously approved by the Council or a Standing Committee of the Council up to a value of $8,000,000

Responsibility to provide oversight and direction on tendering processes in general and/or specific issues relating to a particular project

The Committee reports to the Works and Services Committee

 


 

HASTINGS DISTRICT COUNCIL

 

Tenders Subcommittee MEETING

 

Thursday, 9 November 2017

 

VENUE:

Landmarks Room

Ground Floor

Civic Administration Building

Lyndon Road East

Hastings

TIME:

9.00am

 

 

A G E N D A

 

 

 

1.         Apologies

At the close of the agenda no apologies had been received.

At the close of the agenda no requests for leave of absence had been received.

2.         Conflict of Interest

Members need to be vigilant to stand aside from decision-making when a conflict arises between their role as a Member of the Council and any private or other external interest they might have.  This note is provided as a reminder to Members to scan the agenda and assess their own private interests and identify where they may have a pecuniary or other conflict of interest, or where there may be perceptions of conflict of interest. 

If a Member feels they do have a conflict of interest, they should publicly declare that at the start of the relevant item of business and withdraw from participating in the meeting.  If a Member thinks they may have a conflict of interest, they can seek advice from the Chief Executive or Executive Advisor/Manager: Office of the Chief Executive (preferably before the meeting). 

It is noted that while Members can seek advice and discuss these matters, the final decision as to whether a conflict exists rests with the member.

3.         Confirmation of Minutes

Minutes of the Tenders Subcommittee Meeting held Thursday 26 October 2017, including minutes while the public were excluded.

(Previously circulated)

4.         Transportation Maintenance Contract Procurement Report                          5

5.         CON2017058 - Hawke's Bay Opera House Theatre Seismic Strengthening - Building Consent 2 Costs                                                                                      15

6.         Havelock North Trunk Watermain and Booster Pumpstation Procurement Plan                                                                                                                              19

7.         Additional Business Items

8.         Extraordinary Business Items 

 

 

     


File Ref: 17/1064

 

 

REPORT TO:               Tenders Subcommittee

MEETING DATE:        Thursday 9 November 2017

FROM:                           Transportation Operations Manager

Adam Jackson

SUBJECT:                    Transportation Maintenance Contract Procurement Report        

 

 

1.0       SUMMARY

1.1       The purpose of this report is to seek a decision from the Tenders Subcommittee on the proposed procurement method and model to replace the existing six (6) term road maintenance contracts that expire in June 2018.

1.2       This request arises from the review and proposed changes to previous maintenance contract procurement methods.

1.3       The Council is required to give effect to the purpose of local government as prescribed by Section 10 of the Local Government Act 2002. That purpose is to meet the current and future needs of communities for good quality local infrastructure, local public services, and performance of regulatory functions in a way that is most cost–effective for households and businesses. Good quality means infrastructure, services and performance that are efficient and effective and appropriate to present and anticipated future circumstances.

1.4       The objective of this decision is to provide a good quality infrastructure that is cost effective for households and businesses.

1.5       This report concludes by recommending that the existing six (6) maintenance contracts be replaced with the following four (4) contracts:

·    Rural Pavement and Corridor Management Contract

·    Urban and Plains Pavement and Corridor Management Contract

·    Street Lighting and Traffic Signal Maintenance and Renewals

·    Network Pavement Marking

 

2.0       Background

2.1       Six term maintenance contracts are used to complete transportation maintenance and some renewals works. These contracts expire on 30 June 2018 and require all of these contracts to be reconsidered in terms of contract scope, terms and types. The contracts have varied in terms of contract lengths with some having been in operation for 7 years.

3.0       CURRENT SITUATION

3.1       The works in the current and Proposed Contracts include:

 

·    Sealed Pavement Maintenance

·    Unsealed Pavement Maintenance

·    Sealed Road surfacing

·    Sanitation and litter management (Provisional)

·    Footpath Maintenance

·    Signs and roadside furniture Maintenance

·    Vegetation control, mechanical and chemical

·    Drainage Maintenance

·    Bridge Maintenance

·    Aggregate supply

·    Earthworks

·    Initial Response Emergency Event Management

·    Flood Damage Repairs

 

3.2       Currently these works are managed in several contracts with the respective aspects being split into these contracts by area and/or work type:

·     CON2010068  Rural Network Management

·     CON2010069  Urban and Plains Network Management

·     CON2010070  Auxiliary Roading Works

·     CON2012030  Second Coat and Maintenance Reseals

·     CON2014001 Street Lighting and Traffic Signal Maintenance and Renewals

·     CON2014002  Network Pavement Marking

 

            The Maintenance Group – common understanding (no contract)

Direct Engagement of other suppliers.

 

4.0       SIGNIFICANCE AND ENGAGEMENT

 

4.1       The annual expenditure of Transportation term contracts exceeds 5% and hence is considered to be trigger Councils Significance and Engagement Policy.

4.2       The comparison between current annual values and annual value of the proposed Contracts are shown in the table below:

Contract or Engagement

Current Model

Proposed Model

Total Estimated Contract Value (5 Year Period)

Rural Network Management

$3,400,000

$7,000,000

$35,000,000.00

Urban Network Management

$3,250,000

$7,000,000

$35,000,000.00

 

Auxiliary Roading Contract

$2,200,000

$0

 

Resealing and Second Coat Sealing

$3,479,000

$0

 

Direct Engagement of Berkett Earthmoving Ltd

$1,340,000

$0

 

Street Lighting

$870,000

$450,000

$2,250,000.00

Network Pavement Marking

$407,000

$407,000

$2,035,000.00

Total

$14,946,000.00

$14,857,000.00

 

 

4.3       Through Councils LTP process, Council can consider to be already sufficiently informed about the views and preferences of interested and affected parties as all activities that are undertaken through these contracts are detailed in Councils Asset Management Plans, Long Term Plan and Annual Plan. 

4.4       Workshops have been held with the incumbents of the existing major Contracts. The outcome of those workshops have been incorporated into the details of the contracts being prepared.

5.0       cONTRACT Elements

5.1       The following Contract elements were investigated;

·    Contract delivery model

·    Contract procurement method

·    Contract type

·    Contract tenure

·    Timing of Procuremenet

 

6.0       ASSESSMENT OF OPTIONS

6.1       The Institute of Public Works Engineering Australasia (IPWEA) paper “Selecting the Best Road Maintenance Contract” has been used as a guide to selecting the type of Contract delivery model best suited for the next set of Contracts.

6.2       The IPWEA paper provides a guidance matrix that was used to assess the available delivery models. The available models are:

·    Traditional – where the client programmes the work on a measure and value basis

·    Performance Based – when the client wants to set performance measures and holds the contractors accountable for delivering them

·    Alliance – when the client wants to work collaboratively with the Contractor to achieve best for network outcomes and understand cost structures for targeting savings

·    Framework/Panels – when the client wants to have a number of specialist suppliers on hand to work as per the traditional model.

 

6.3       There is a fundamental difference to what Hastings District Council have been doing compared with the terms used in the IPWEA paper. The Hastings District Council ‘Traditional’ contract is a collaborative contract where a mix of programming roles take place i.e. the contractor owns large portions of the programme, and this would continue for future contracts.

 

6.4       Using the matrix, the Traditional model as per the way Hastings District Council run them has been identified as being the preferred model. Attachment 1 is provided showing the outcome of using this selection tool.

6.5       For the preferred contract types and makeups, a suitable procurement method was investigated that will allow Council to procure a supplier to meet the objectives and outcomes previously listed and meet the requirements of NZTA Procurement Manual, and the Hastings District Council Procurement Strategy.

6.6       The following procurement methods were investigated:

·    Direct Engagement – not considered due to the value exceeding Councils Procurement Manual limits

·    Lowest Price Conforming – not considered due to the value exceeding Councils Procurement Manual limits

·    Price Quality Method (PQM)

 

6.7       To date, no conforming Council transportation tender, using the PQM method at the standard 70/30 ratio, has been won by any tenderer other than the lowest price tendered.

6.8       Due to the complex nature of these term contracts and the specific need to get the suppliers with the best attributes and competitive rates procured, there is a need to use the PQM method but review the price/attribute ratio. Options are as follows:

Price - Attribute Ratio %

Commentary

70 – 30

·       Commonly used ratio

·       Price has always dictated. Supplier can adjust price easily to buy Contract with medium risk

60 – 40

·       No significant change from above

50 – 50

·       Heavy weighting on attributes giving better contract quality dollars

·       Supplier can adjust price to buy Contract with still medium risk.

·       Maximum attributes weighting allowed without Specific approval from NZTA through an approved Project Procurement Strategy

·       The 50/50 split put a high value on quality ($300k per point difference for a $30m contract)

40 – 60

30 – 70

20 – 80

 

·       Significant weighting on Attributes

·       Higher prices should be expected

·       Specific approval through an approved Project Procurement Strategy is required

·       The 30/70 split puts a very high value on quality ($700k per point difference for a $30m contract)

 

The existing Contracts were procured using a 50/50 Price Quality split. It is considered this provides an appropriate level of value placed on procuring a quality provider. There is no change recommended to this practice.

6.9       Five (5) contract types were investigated whether they will achieve: Best Value for Money, Best Whole of Life Management of Asset, Fair Market Share, Co-operative, Professional and Innovative Working Environment.

6.10    These Contract types were investigated and ranked against the outcomes mentioned under 6.10

Key:

þ - will achieve consistently

o - can achieve with management from Hastings District Council

ý - cannot achieve

 

 

Outcomes

Option

CONTRACT TYPE

Best Value For Money

Best Whole of Life Management of Asset

Fair Market Share

Professional and Innovative Working Environment

A

1 Network Contract

ý

þ

ý

þ

B

Rural Network Contract

Urban Network Contract

o

þ

ý

þ

C

Rural Network Contract

Urban Network Contract

Street Light and Traffic Signal Contract

Road marking contract

þ

þ

þ

þ

D

Rural Network Contract

Urban Network Contract

Street Light and Traffic Signal Contract

Road marking contract

Reseal and Second Coat Sealing

þ

o

þ

o

E

Rural Network Contract

Urban Network Contract

Street Light and Traffic Signal Contract

Road marking contract

Reseal and Second Coat Sealing

Auxiliary Contract and Direct Engagement

o

o

þ

ý

 

6.11    From the table above, all of the contract types have benefits that meet different aspects of the outcomes listed. The existing option E has worked well where the contractor has taken ownership and partnered a philosophy with the Hastings District Council. It has not succeeded in outcome 2 and successively 1, where a reactionary approach has been adopted due to no benefits to the supplier to do otherwise.

6.12    Potential suppliers, their capabilities and ability to achieve objectives, (pavement works, signs, vegetation, earthwork and aggregates supply,  Sanitation, Resealing, Road marking, Traffic signals and street lights), were graded subjectively by the Operations Engineers going on knowledge of the suppliers capabilities and track record with the Hastings District Council. There is a good range of suppliers who will be able to provide any of the works categories.

6.13    A major potential deviation from the existing make-up of contracts is for reseals and second coat sealing contract to be split and shared across the two (2) major network management contracts.  The current model does not give any one contractor ownership of the reseal site. Currently the maintenance contractor prepares the road for sealing, the reseal contractor reseals it, and the road marker marks it. There is continual misalignment, and poor programming of preparation, resealing and marking componants. The new contract model will not only ensure there is total ownership of the reseal programme, but also promotes an active part in preparing the overall programme. NZTA Network Outcome Contracts (NOC’s) have meant that Contractors now have capability to provide considerable inputs into future programmes and the Operations team are seeking to take advantage of this. The best way to take advantage of this is to ensure ownership from start to end is provided to the successful Contractor. This will result in better preseal repair programmes and better coordination with roadmarking requirements. This will provide roads that will last longer, and will be safer by combining the reseals in the road maintenance contracts.

6.14    Another significant potential deviation from the existing make-up is for the Auxiliary Contract and its variations to be incorporated into the two (2) major network management contracts. The variations to the Auxiliary Contract is that Berkett Earthmoving Ltd, Greenscene Arborists, Farmgear Hawkes Bay, Evergreen Landcare Ltd and Napier Sandblasting Ltd are all engaged directly by Hastings District Council. The intent of separating these suppliers out of the Auxiliary Contract was to manage these suppliers in house which has been an effective model to see some cost benefits. The downside has been a loss of those records from the RAMM system and an inability to show true costs against specific roads for activity not undertaken through the Contract mechanisms. The effect of not capturing RAMM data means that models determining future maintenance requirements, future costs and future renewal needs are not accurate and can lead to under reporting of need on the network, or a lack of evidence to justify renewal spend to our funding partner NZTA. There is also a continued lack of accuracy in asset data as the activity undertaken outside of the Contracts have not been captured in the RAMM system.

6.15    Direct engaging companies for long term activities poses a risk to Council in that there is no Contractual agreement with them to undertake work to a required standard, to a competitively priced cost, undertake rework, nor is there a requirement to ensure the scope of work can be done. Engaging these previous suppliers through a head contractor will provide certainty of activity, certainty of costs, accuracy of asset data and enables the head Contractor to collaborate with the other suppliers and share learnings across organisations and the transportation industry.

6.16    The initial term of the Contracts was discussed with the incumbents and within the Operations team. Nationally it is agreed that the longer initial term Contracts initiate the best investment from the Contractors. An initial period of 4 years gives certainty of tenure for Contractors sufficient enough to invest significantly in plant for the activities needed. The Contract has several clauses to terminate earlier than the initial 4 year period upon poor performance, or default by the Contractor. An optional 1 year extension can be granted which would extend the contract term to the maximum allowable under NZTA rules of 5 years.

6.17    A detailed contract programme will be developed with each individual contract procurement plan. The overarching programme is:

Contract

Tender Advertise Date

Closing Date

Interview Panel

Award Date

Rural Maintenance

December 2017

February 2018

During February 2018

Early March 2018

Urban Maintenance

January 2018

Mid March 2018

Immediately following closure (late March)

April 2018

Street Lighting and Traffic Signals

February 2018

April 2018

N/A

May 2018

Road Marking

February 2018

April 2018

N/A

May 2018

 

6.18    The Urban Maintenance Contract is intentionally programmed to close after the Rural Maintenance Contract has been awarded. It is expected that unsuccessful conforming Contractors who bid for the Rural Maintenance Contract will provide more competitive prices on the Urban Contract provided the outcome is known prior to tender closing on the Urban Maintenance Contract. 

7.0       PREFERRED OPTIONS AND REASONS

7.1       The preferred Contract Types are Measure and Value and Alliance Cost Reimbursement. Measure and Value is the current Contract Type and suits a balance of hands on and allowance for the Contactor to take ownership. The Cost Reimbursement Method will require a more flexible Contract Law document such as NEC (New Engineering Contract) and a dedicated Alliance team. There is insufficient time available to set up an alliance team, and model to facilitate this. The additional complication of having two major road maintenance contracts in operation further complicates the alliance structure that would increase resource requirements, and time pressures.

7.2       The following contract type, makeup and procurement method has been reviewed by the Transportation Operations Team and recommended to be the most suitable to achieving the Objectives and Outcomes of the Hastings District Council as a whole and the Transportation Strategies:

·   Tenure for Urban and Rural Maintenance Contracts

4 + 1  (years) Measure and Value Contract with Lump Sum elements included  (NZS 3917)

·    Tenure for Street Lighting and Traffic Signals, and Road marking Contracts

o 4 + 1 (years) Measure and Value Contract with Lump Sum elements included  (NZS 3917)

 

·    Contract Mixes

o Rural Pavement and Corridor Management Contract

o Urban and Plains Pavement and Corridor Management Contract

o Street Lighting and Traffic Signal Maintenance and Renewals

o Network Pavement Marking

 

7.3       While deciding this matter is considered as being within the authority of the Subcommittee, given the scale of the contracts ($70m over five years) it may prefer, in the first instance to make a recommendation to the Works and Services Committee for consideration.

7.4       Two alternatives are therefore provided in the recommendation.

 

8.0       RECOMMENDATION

A)      That the report of the Transportation Operations Manager titled “Transportation Maintenance Contract Procurement Report” dated 9/11/2017 be received.

B)     That the Tenders Subcommittee approves the amalgamation of the existing six term maintenance contracts into:

·     Rural Pavement and Corridor Management Contract

·     Urban and Plains Pavement and Corridor Management Contract

·     Street Lighting and Traffic Signal Maintenance and Renewals

·     Network Pavement Marking

 

C)     Approved tenure for all transportation term maintenance contracts to be 4+1 (years).

 

D)     The procurement by Price Quality Method remain weighted as 50% price, and 50% attributes.

E)      The Measure and Value (Traditional) Method to remain the preferred contract model.

OR

A)  That the Tenders Subcommittee recommends to the Works and Services Committee that;

i)          The existing six term maintenance contracts be amalgamated into:

·    Rural Pavement and Corridor Management Contract

·    Urban and Plains Pavement and Corridor Management Contract

·    Street Lighting and Traffic Signal Maintenance and Renewals

·    Network Pavement Marking

 

ii)         Approved tenure for all transportation term maintenance contracts to be 4+1 (years).

 

iii)        The procurement by Price Quality Method remain weighted as 50% price, and 50% attributes.

 

iv)        The Measure and Value (Traditional) Method to remain the preferred contract model.

       With the reasons for this decision being that the objective of the decision will contribute to meeting the current and future needs of communities for good quality local infrastructure in a way that is most cost-effective for households and business.

 

 

Attachments:

 

1

Institute of Public Works Engineering Australasia (IPWEA )Maxtrix

CG-14-17-00109

 

 

 

 


Institute of Public Works Engineering Australasia (IPWEA )Maxtrix

Attachment 1

 

PDF Creator


File Ref: 17/1113

 

 

REPORT TO:               Tenders Subcommittee

MEETING DATE:        Thursday 9 November 2017

FROM:                           Project Manager

Ansonica Botha

SUBJECT:                    CON2017058 - Hawke's Bay Opera House Theatre Seismic Strengthening - Building Consent 2 Costs        

 

 

1.0       SUMMARY

1.1       The purpose of this report is to obtain approval from the Committee to accept the lump sum costs for the construction works contained within Building Consent (BC 2) required to complete the seismic strengthening of the Hawke’s Bay Opera House Theatre. 

1.2       This report concludes by recommending that the lump sum cost of $6,450,182.00 (excl GST) submitted by Gemco Construction Ltd for the construction works contained within Building Consent 2 required for the completion of CON2017058 – Hawke’s Bay Opera House Seismic Strengthening Theatre be accepted.

2.0       BACKGROUND AND CURRENT SITUATION

2.1       To enable work to start on site as soon as possible, the construction scope for the seismic strengthening of the theatre was split into two packages.  The first package Building Consent 1 (BC1) contains mainly the items which will take the longest to construct.  These items include the foundation work, shear walls in the foyer and the diaphragms that connect the walls to the ceilings. 

2.2       BC2 is for the remainder of the work and includes shear walls in the auditorium, steel trusses in the roof space, diaphragms, toilet upgrades, internal finishing work, plumbing and electrical work, fire accessibility changes, external repairs and painting.

2.3       At the Council meeting held on 13 July 2017 Council resolved the following:

“C) That the engagement of Gemco Construction Ltd for the construction contract for BC2 of the seismic strengthening of the Hawke’s Bay Opera House Theatre be delegated to the Tenders Subcommittee.”

2.4       Work started on the construction works contained within BC1 on the 1st of August 2017 and works are progressing on budget and within the programme.  The estimated completion date is 31 August 2019. 

2.5       The detailed designs for BC2 is now complete and the building consent application has been submitted. 

2.6       At the 13 July 2017 Council meeting the cost for BC2 was estimated at $6,505,122.19 (excl GST).

2.7       The fixed lump sum cost for BC2 has now been received from Gemco Construction Ltd at $6,450,182.00 (excl GST).

2.8       These costs are being reviewed by Rhodes & Associated, the independent quantity surveyors for this project.  At the time of writing this report the final report from Rhodes is not available.  Officers will provide an update from this review to the meeting.

2.9       The lump sum cost includes the following items that are additional to the works included in the original estimate for BC2:

·     Electrical upgrade

·     Construction of two bars on level 1 and level 2.

·     Additional steel supports in the roof space for future audio upgrades.

·     A new accessibility ramp in front of the entrance to allow for wheelchair access through the old main doors. 

·     Full toilet upgrades.

·     New carpet throughout the entire building and on level 1 and 2 above the Cushing foyer.

·     Full internal and external repaint (excluding the art work on the auditorium ceiling)

·     New roof over the main part of the Theatre eliminating the internal gutters and the issues with water ingress damaging the ceiling art work.

2.10    The total construction costs for the theatre is $11,344,645.50 (excluding GST), which is approximately $45,000 below the estimate tabled at the Council meeting held on 13 July 2017.

3.0       PROJECT FINANCIAL ALLOCATION

3.1       A budget provision of $20 million of loan funding for various initiatives within the Hastings CBD was ratified as part of the 2015 Long Term Plan.

3.2       A subsequent consultative process with the community in 2016 confirmed that the strengthening of the Opera House Theatre would be the first call on this funding at a preliminary estimate of between $10 and $11 million.

3.3       Council has also received $4.5 million from external funding to support the earthquake strengthening of the Opera House Theatre.  The external funding is subject to a number of conditions that Council adopted on 22 June 2017. 


 

3.4       The current project financial allocation is as follows:

Activity

BC1 (excl GST)

BC2 (excl GST)

Total

Financial Allocation

Difference

Seismic Strengthening

$4,894,463.51

$5,334,682.00

$10,229,145.51

$10,500,000.00

$270,854.49

Other Building Renewals

 

$1,115,500.00

$1,115,500.00

$1,000,000.00

-$115,500.00

Other Costs

 

 

$1,457,382.50

 

$1,500,000.00

$42,671.50

Total Project Cost

$4,894,463.51

$6,450,182.00

$12,802,028.01

$13,000,000.00

$197,971.99

3.5       Other Costs include the following:

·     Professional services fees of $1,272,392.50.

·     Insurance fees estimated at $95,000.00.

·     Building consent fees estimated at $90,000.00.

3.6       NZS 3910:2013 Conditions of Contract for building and civil engineering construction, provides for certain events and circumstances to be treated as variations, resulting in additional costs and time extensions.  The total price BC1 and BC2 includes a Contingency Allowance of $1 million.

4.0       SIGNIFICANCE AND ENGAGEMENT

4.1       The Hawke’s Bay Opera House project has been through a special consultative process in accordance with the Local Government Act 2002 and the Council’s Significance and Engagement Policy.  The matters in this report do not require any further assessment or consideration of significance and engagement.

 

5.0       RECOMMENDATIONS AND REASONS

A)        That the report of the Project Manager titled CON2017058 - Hawke's Bay Opera House Theatre Seismic Strengthening - Building Consent 2 Costs dated 9/11/2017 be received.

B)        That the lump sum cost of $6,450,182.00 (excl GST) submitted by Gemco Construction Ltd for the construction works contained within Building Consent 2 required for the completion of CON2017058 – Hawke’s Bay Opera House Seismic Strengthening Theatre be accepted.

C)        That the Chief Executive be authorised to complete any necessary documentation to enable this decision to be implemented.

 

Attachments:

There are no attachments for this report.

 

 


File Ref: 17/1146

 

 

REPORT TO:               Tenders Subcommittee

MEETING DATE:        Thursday 9 November 2017

FROM:                           Project Manager

Amy Patterson-Horner

SUBJECT:                    Havelock North Trunk Watermain and Booster Pumpstation Procurement Plan        

 

 

1.0       Summary

1.1       The purpose of this report is to seek approval from the Tenders Subcommittee on the procurement process for the construction of the Havelock North trunk watermain and booster pump station.

1.2       This Procurement Plan is submitted to the Tenders Subcommittee for approval because the total project is required to be completed by December 2018 consisting of various contracts starting from December 2017. This deadline is crucial to meeting summer peak demand from the alternative water supply and enabling Brookvale Bore 3 to be turned off.

1.4       This report concludes by recommending that the Tenders Subcommittee approve the proposed Procurement Plan and confirm via the Works & Services Committee the authority to approve tenders to the combined value of $8,500,000 (excluding GST).

2.0       Background and Scope of Work

2.1       Havelock North is currently supplied treated water from Brookvale Bore 3 via the Brookvale water treatment plant. Supply is augmented from the Eastbourne bore water source in Hastings via the existing 375mm diameter trunk watermain in Havelock Rd.

2.2       Following the August 2016 contamination which has been linked to the Brookvale bore catchment area, a range of investigations have been undertaken to determine the risks and consequences for continuing to abstract water from Brookvale bore #3.

2.3       These investigations have determined that the source water in this location is not secure and the environmental effects from the continued use of this bore are unlikely to be acceptable as a long term option.

2.4       The current resource consent expires in May 2018 and there is an expectation that HDC will move away from the Brookvale bore as a source of water to Havelock North. It is also evident that the community supports a move away from Brookvale to sources that will provide water that is of a superior quality, be that from existing or new water sources.

2.5       The purpose of the project is to provide an alternative water supply to Havelock North that enables the decommissioning and removal of the Brookvale water treatment plant without compromising supply to consumers in the interim.

2.6       This project forms the first part of a comprehensive water supply strategy with the objective to provide a water supply that is of high quality and is safe, with sufficient quantity to meet existing and future demand. This strategy advances from the original water strategy adopted by Council in 2012.

2.7       The project includes the following:

·     Construction of a new 5.4km trunk water main (500mm ID) from Hastings to Havelock North.  The pipeline route is from the Heretaunga/Sylvan intersection via Sylvan Road, St Aubyn Street, Windsor Ave, Howard St, St Georges Rd, Crosses Rd and Napier Rd connecting into the existing trunk watermain in Karanema Drive.

·     Crossing the Karamu Stream via Crosses Rd bridge

·     Construction of a booster pump station in Karanema Drive to deliver supply to reservoirs and higher elevated parts of the Havelock North reticulation.

2.8       The intended completion of the above works is required by the end of November 2018 in time to meet increased summer demand. This timeframe is extremely tight given the extent of the work to be undertaken which requires a procurement framework that enables timely procurement to meet tight programming deadlines.

3.0       Proposed Procurement Model

3.1       The proposed Procurement Plan includes a range of contracts to be procured via different methods. This approach is required to successfully deliver the full scope of the proposed project within the ambitious programme for the following reasons:

·     The overall project requires a range of different skills and expertise that are not readily available via a single supplier.

·     Multiple contracts provide the project team with the ability to stage the design and procurement of various components to meet the overall project programme and critical path for delivery.

·     Construction will need to be occurring concurrently across a number of areas and the availability of resources and expertise will need to be procured via a number of different contractors and suppliers.

3.2       Market analysis of suppliers for each component part of the project has been carried out.  This analysis is discussed in detail within the procurement plan.

3.3       Where a large national market is potentially available to complete substantial components of the project, a two stage procurement method and competitive tender process is recommended. This includes the main civil contracts for laying the trunk watermain and building the booster pump station. 

3.4       Council’s prequalification system is recommended for smaller components of work where there are appropriate categories.  This includes the proposed bridge strengthening work.

3.5       Material supply items include emergency generator, pumps and VSDs and the design has very specific requirements for these items. It is recommended that these be procured via quotation by suppliers within New Zealand that provide suitable equipment.  Alternatively a sole source purchase will be required if only one supplier’s offering is identified as meeting all design and operational requirements.  It is estimated the total value of these supply items will be in the order of $200,000 (ex. GST).

3.6       These minor direct engagement items fall within the delegated authority of the Chief Executive.

3.7       Request for Expressions of Interest (REOI)

3.8       An REOI was advertised in October and officers have short listed candidates and notified them on 3 November 2017.

3.9       As part of the procurement process, The REOI enables HDC to select a minimum of two suitably qualified contractors who best meet capability, experience and track record criteria, to expedite the procurement process whilst detail design is been completed.

3.10    The preferred respondents will participate in a simplified Early Contractor Involvement (ECI) process including pre tender briefing meeting, development of an accelerated programme and finalization of the detailed design. On completion of the design the selected Contractors will be invited to tender for the work.

4.0       Recommended exemptions to tender

4.1       A number of component parts of the overall project require suppliers that are specialist in nature.  These small specialist aspects have been identified as critical to the overall success of the project and include:

·     booster pump station telemetry to be provided by SCADA Electrical. Estimated value less than $15,000 (ex. GST).

·     booster pump station electrical installation and control to be provided by Controlbox.  Estimated value less than $50,000 (ex. GST).

4.2       Minor enabling works will be carried out prior to the end of December 2017 under the existing HDC roading maintenance contractor.

4.3       Unison will provide the required power supply and transformer to the booster pump station.  In this instance HDC do not have an alternative supplier option as Unison are the only power supplier available in the Hastings District.

5.0       booster pump station Issues

5.1       The booster pump station is adjacent to several residential properties and we are working on detailed assessments to inform affected parties and to support a consent application.

5.2       The Council is currently processing the resource consent application for the booster pump station.  It is anticipated that this consent will be in place prior to commencement of the contract.  The booster pump station contract will include all building consent requirements and any specific consent conditions that may be required.

6.0       Finanacial Implications

6.1       The total project estimate is $9,930,000 (ex.GST) comprising the new watermain (estimated at $7.0M) and the Booster Pump Station (estimated at $3.0M). This estimate has been developed from information available at this time but prior to final detailed investigations being completed. It will be further refined as the detailed design and investigations are finalized in November.

6.2       Financial provision has been allocated for this project within the 2017/18 capital works budget of $12,000,000. This funding provides for upgrades to the water network, new works and the provision of treatment at some of our water sources.

6.3       $5.5M of this budget has been assigned to this project within the 2017/18 financial year.

6.4       Purchase of the 500mm diameter concrete lined steel pipe has been procured via a separate pipe supply contract (CON2017094) to the value of $1,489,760.00 (excluding GST) and this is funded within the $5.5M allocation.

6.5       Approximately $4.0M of approved funding remains available specifically for the watermain and booster pump station contracts to commence.

6.6       The estimated balance of $4.5M is included in the 2018/19 budgets from within the LTP and is subject to Council approval through the LTP process.

6.7       The awarding of contracts and the financial commitment to this project is required in advance of this funding being approved by Council through the LTP.

6.8       The total budget estimate for which approval is being sought is $8.5M (excluding GST).

 

7.0       RECOMMENDATION

A)      That the report of the Project Manager titled “Havelock North Trunk Watermain and Booster Pumpstation Procurement Plan” dated 9/11/2017 be received.

B)     That the Tenders Subcommittee approve the Procurement Plan.

C)     The Tenders Subcommittee seek confirmation via the Works & Services Committee for the authority to approve contracts as outlined within the plan up to the combined value not exceeding $8.5M (excluding GST).

 

 

Attachments:

 

1

CON2017099 Havelock North Trunk Watermain - Procurement Plan Final

PRJ17-73-0045

 

 

 

 


CON2017099 Havelock North Trunk Watermain - Procurement Plan Final

Attachment 1

 

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