Local authority transferred contract without retender

29 October 2010

29 October 2010 | Lindsay Clark

Edinburgh City Council has handed a housing improvement contract to building firm Wates Construction, after the winner of its tendering process, Connaught, went into administration.

The moves comes despite Norwich City Council receiving advice not to transfer a contract held by Connaught to a new supplier on a permanent basis without a fresh tender process because of EU procurement rules. The authority said it could only bring in short-term cover to replace Connaught’s services before a full round of procurement.

However, a spokesman for Edinburgh City Council said: “As with all awarding of contracts, legal advice was taken to ensure that EU procurement rules were followed.”  

While Edinburgh has avoided another bidding round, the council has incurred greater cost in the transfer of the contract to Wates. According to its documents, the Wates Construction bid was around £700,000 higher than the Connaught bid, over the deal’s four-year lifespan.

However, the authority insisted that the new deal could be managed within the £9.25 million budget to deliver the planned programme.

Edinburgh City Council awarded the contract to Connaught in June to carry out improvements to low-rise domestic properties over a four-year period. Connaught had not started work on the contract when it went into administration in September.

“The options open to the council were to either re-tender fully or award the contract to the contractor which was second in the tendering process [Wates Construction],” the council report from the finance and resource committee said.

“To meet with EU tendering compliance, notification of the award to [Wates Construction] was issued to all contractors, excluding [Connaught], which took part in the tendering process. The standstill period closed on 8 October 2010, which resulted in no material issues being raised to prevent the awarding of this contract. As a result, an award was issued to [Wates Construction],” the report added.

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