Agenda item

The Re-tendering of the responsive repairs contract


Sally O’Sullivan, Head of Tenant and Leaseholder Services introduced the report and made the following comments:


  • This report was regarding the proposed approach to the procurement of a partnering contractor for day to day responsive repairs, voids, compliance and major works;
  • This service was currently provided by Mears and the contract was due to expire on 31 March 2025;
  • Due to the size and complexity of this contract, the Council had to start the process now to ensure that there was enough time to apply the right model and procure the right partner to deliver this service;
  • Officers sought the assistance of a consultant to help get this right. The consultant chosen had worked extensively with local authorities across Kent to procure the same kind of contract, meaning they had a wealth of experience to apply to this process;
  • Officers had carried out a series of workshops and discussed what was working well and what needed to be improved with the current service and explored different options for the approach to service delivery with the new contract. Officers had a strong focus on local delivery and the employment of local operatives;
  • As part of this we looked at the option to bring the entire service in house. This was discarded due to a number of operational issues that would hinder set up and smooth service delivery; these included:


§  Not having a depot available to work out of, to store plant and materials and this would take substantial investment and time to set up;

§  Requirement for additional management for finance and ICT;

§  The ability to cope with peaks and troughs of work through seasonal demand;

§  The Council would still have to procure contractors to carry out specialist works for example, asbestos management and electrical safety.


  • This was discussed more extensively in section 3.12 to the committee report;
  • Officers decided that the best proposal was to rework and improve the current model which is Price Per Property (PPP) and Price Per Void (PPV). This would mean there would be in place, a fixed price agreement per property through which the service provider would carry out repairs and maintenance, using the national schedule of rates for anything that fell outside;
  • The main benefits of this model included the following:


§  Less administration than if the Council were to approve individual SOR for all jobs/voids;

§  Officers can focus on quality of works rather than value;

§  Officers would have faster repair completion as this model meant the contractor would complete works without seeking authorisation from TDC in a majority of orders;

§  Familiar way of working for TDC officers;


  • The main disadvantage was that contractors may try to charge in appropriately for repairs they deemed as falling outside the price per property model or carry out works in a property so that the final value falls outside the price cap;
  • Officer were going to write elements into the contract to mitigate against these risks and this includes:


·  Including a clear document that sets out what repairs are included within the PPP and PPV;

·  Setting an appropriate cap to the price per property;

·  Clearly defining what happens when works go above the set cap;


  • Officers were keen to extend the provision of some of the in-house services; this would include minor ground works, fencing and arborist works;
  • Officers intended to keep these services available to call off through this contract as well, to provide resilience to the service;
  • Officers had sought to include a separate element into this procurement by introducing the requirement for a bid and delivery partner as a separate lot. This means we could have 2 partnering contractors; 1 for the main elements for delivering repair and maintenance and 1 to be our delivery partner for grant funded works.


  • When grant funding became available the Council had to be ready to bid for it and often deliver the works within very tight timeframes. An estimated spend of £4m per year for this element had been included, but this would not be spent unless grant funding was available and the partner delivered a winning bid application;
  • This level of spending had been included because officers were ambitious and wanted the best for the Council’s assets and residents. When grant funding became available the Council should be in the best position to be awarded funding and deliver on what had been planned;
  • Officers had engaged residents in the formation of this proposal as they had valuable first-hand experience of this service. Residents gave some beneficial feedback and endorsed the model proposed;
  • The intention was to continue to engage with residents in this process by asking them to assist the Council with the analysis of the tenders received.


Councillor Whitehead, Deputy Leader and Cabinet Member for Housing made comments as follows:


  • The level of work that goes into both procurement and organisation of a housing service of this scale is extraordinary; as is the progress that has been made within Housing since we brought it back in house;
  • The Portfolio Holder said that she felt that on occasion, she was criticised for being too ambitious in relation to Housing;
  • The Portfolio Holder's ambition was informed by knowledge and an understanding of both procurement and risk, and never approve a strategy or approach that she felt could endanger either Housing, or the Council’s ability to deliver services;
  • This contract was last extended in 2020; it could not be extended further. This meant that coming in this May as an administration gave little to no lead time to produce an extended in-house service across all areas; much as, as evidenced by the determination to bring Housing back and produce in-house temporary housing and the Council’s first in-house rough sleeping accommodation, the general inclination was to create and promote in-house services wherever possible;
  • Ideals had to be considered in relation to realities and the security of service, especially when what was at stake was the quality of delivered service to a very large number of our residents. As such focusing on areas that the Council could deliver in-house, such as minor works and ensuring that complex and specialist areas function and deliver without interruption was essential;
  • The Council was now focusing heavily on the local economy in housing procurement. Contracts were now prioritising local jobs, local call centres and included the requirement for local apprenticeships to build not only the local economy, but also build skills and employment opportunities; 
  • This combined with the proposed in-house expansion of minor works, to explore our delivery of direct services, allowed the Council to deliver not only many highly complex workstreams, but also created resilience. The sheer scale of the number of new strategies being implemented and the considerable growth of our portfolio means that ensuring reliability of provision at a time when we were still a Council with disproportionately low staffing for the scale of what we deliver meant that considering the long term future of all projects was essential;
  • A significant amount of high level of work had gone into the preparation of this procurement exercise, and Members were asked to recognise just how hard Ms. O’Sullivan and the team had worked.


Members asked questions and made comments as follows:


  • One Member asked what the process and criteria for contracting out work was;
  • They further asked under what circumstances would the Council not want to continue with the contract;
  • The element on decarbonisation: Was this to be given to a contractor who had the capacity to write bids on decarbonisation or one who would be able to provide the works for the decarbonisation element of the project?
  • How did the price per property model work with other Council departments who would be allocated part of this project work?
  • With the supply chain sometimes contractors would get it wrong. Was the contract going to make such contractors more accountable for their mistakes?
  • Had officers considered value for money when drafting these proposals? It appeared as though the estimates were too high for maintenance costs per property in comparison with the industry averages;
  • Had options been considered to roll this project over a year?
  • Had an alternative business model for managing this portfolio, like having one manager managing between 100 and 120 housing units?
  • This would manage these units with help from the Legal Department, supervisors and one contractor;
  • What was the bottom line figure for this project?
  • Was it possible to develop a parallel in-house service whilst this contract was being developed?
  • It was encouraging to note that the Council was having a long contract partnership. Was there any performance related payment built into the contract?
  • Were there any independent auditors in the market who could pick out any woolly performance stats when performance reports were submitted to the Council?
  • This approach was as good as it was going to be monitored and enforced;
  • An open and transparent tender process would normally identify the right contractor. If the process was unable to identify the right contractor that would be a message for the Council to investigate why;
  • One of the key recommendations from the Grant Thornton external audit report was for less outsourcing work and more in-house service provision;
  • There should have been a lot more member involvement in putting together these proposals;
  • The triage for the two stage process was what the Panel would need to be informed about;
  • Accountability had to be built into this whole process;
  • One Member said that Grant Thornton had not advised the Council to outsource less but was rather reporting on progress over time. Officers worked hard and it was important for Members to acknowledge that;
  • One of the biggest risks faced by the Council was cyber security. Digital integration being proposed should consider issues of due diligence on third parties;
  • With regards to the insolvency: the no fault break clause would only mitigate further damage but not stop damage to the Council’s balance sheet. There were no mitigations detailed in the report.


Sally O’Sullivan and Councillor Whitehead responded to Member comments and questions as follow:


  • The officers’ view was that this was a large, complex and costly task to procure a contract like this approach was more appealing to the market and enabled the Council to form a true partnership that should yield good results;
  • With regards to retrofit decarb works; the Council was looking for a bid writer who would also be able to deliver the project in partnership with the Council;
  • There was a provision for other Council departments call off on works they required. They would not work by the PPP model; this is for social housing stock only;
  • The Council would manage the performance of the contractors and the contractors would take responsibility for their performance;
  • Contractors were able to raise any safeguarding concerns as they go about their work;
  • The Council considered value for money with regards to the bid and delivery lot. This lot would enable the Council to react quickly when grant funding became available and provide the vehicle to deliver the works within the tight timeframes that are often applied to grant funding all of the proposed budget of £11 million would be spent each year;
  • Capital works, for example, if a property was discovered to have windows that were falling in and posing a health risk and therefore needed repairs, we would have the ability to react quickly to resolve the H&S issue without having to carry out a lengthy procurement exercise for a contractor to carry out the work.
  • The current contract could not be extended further. Any delays would risk the Council going against procurement regulations or risking a failure in current service provision
  • Various models were explored and this was viewed as the best as it would provide resilience for the service;
  • Setting up an in-house service as an alternative approach would take about three years;
  • Officers had not considered using the performance payment approach as this can be difficult to manage;
  • Officers were confident that the Tenant and Leaseholder Services team were capable of managing this contract;
  • The tendering process would start with a pre-qualification questionnaire that would be open to any contractor to submit a tender to. The Council would then choose the top 3-5 tenders to invite to submit a full tender for the contract.


Councillor K. Bright proposed, Councillor Will Scobie seconded and Members agreed that the following recommendations to Cabinet:


That Council explore the inclusion of a performance related monitoring of the contract that would lock into the contract a performance related fee and penalty.

Supporting documents: