TRIM REFERENCE: 2015/3194
AUTHOR: Chris Devitt, Director Technical Services
This report outlines a proposal for Council to undertake road construction works in Leeds Parade in conjunction with similar works being undertaken by Bunnings as conditions of consent for their development on the corner of Leeds Parade and the Northern Distributor Road.
Link To Delivery/OPerational Plan
The recommendation in this report relates to the Delivery/Operational Plan strategy “11.1 Our Economy – Encourage the growth of local business, support emerging industry sectors and attract new investment to Orange”.
Financial implications outlined in the Supporting Information section of this report.
Policy and Governance Implications
The proposed approach is in accordance with the tendering provisions of the Local Government Act 1993.
1 That in accordance with Section 55(3)(i) of the Local Government Act 1993, due to extenuating circumstances being:
a the potential for Council to create a significant commercial impact on another entity and
b delivery of value for money for the community may be compromised
Council not call tenders to undertake road upgrade works on Leeds Parade north of the Northern Distributor Road and utilise the contractor previously engaged by Bunnings to undertake these works, Hamcon Civil, at the same rates as previously negotiated between these two parties.
2 That permission be granted for the use of the Council Seal on all relevant documents.
Consideration has been given to the recommendation’s impact on Council’s service delivery; image and reputation; political; environmental; health and safety; employees; stakeholders and project management; and no further implications or risks have been identified.
Bunnings have commenced works on the development of their new hardware store on the corner of Leeds parade and the Northern Distributor Road (NDR), with civil works well underway. A condition of consent for this development requires Bunnings to undertake significant upgrading of Leeds Parade to provide for two entrances to this development for both cars and trucks. At the same time development of the Woolworths Petrol Plus fuel station is underway on the eastern side of Leeds Parade, with this developer also required to undertake works to provide suitable egress onto Leeds Parade as a condition of their development consent.
Council has taken the opportunity, in conjunction with these substantial development works, to undertake associated improvement works to Leeds Parade due to the poor vertical alignment of this road and the narrow pavement. This will result in a full reconstruction of Leeds Parade for a distance of 300m north of the NDR, including provision of turning bays off Leeds Parade, major culvert widening and improved lighting to cater for the increased traffic movements. The total order of cost of this work is around $1.2m. Bunnings portion of these works represents around two thirds of this project, to a value of around $800,000, while the developer of the Woolworths Petrol Plus development will contribute $70,000. The remaining funds of around $330,000 will be funded by Council. These works are already included in the current Delivery/Operational Plan, but the original estimate of $129,000 will require an additional $201,000 to be sourced from existing Roads to Recovery funds from within the existing roads capital program.
Bunnings originally appointed Hamcon Civil to undertake their portion of the work on Leeds Parade in order to ensure they could comply with their projected completion date for this project of mid-2016. Further negotiations between Bunnings and Council have now resulted in Bunnings offering Council up to $800,000 as a financial contribution to satisfy their conditions of development consent associated with the upgrade works required in Leeds Parade. This approach avoids the potential of Bunnings and Council engaging separate contractors to undertake these works, and will facilitate completion of this project in line with Bunnings’ project delivery timeline. However, the tendering provisions under section 55 of the Local Government Act normally require Council to invite tenders before entering into a contract of this scale. Part 55 (3) (i) provides Councils with an exemption from inviting tenders where … “because of extenuating circumstances, remoteness of locality or the unavailability of competitive or reliable tenderers, a council decides by resolution (which states the reasons for the decision) that a satisfactory result would not be achieved by inviting tenders.”
In this particular instance given Hamcon Civil had been engaged to commence these works for Bunnings until very recently, and Bunnings has now sought to satisfy their conditions of consent through a financial contribution to Council for their part of the project, the most efficient way for this project to be delivered is for all parties is agree to engage Hamcon Civil as they are ready to start the work immediately and can comply with the strict commercial timelines Bunnings have set to deliver this project by mid-2016. As well, utilising a single contractor agreed to by all parties offers the most cost effective means of delivering this project. The key extenuating circumstance which arises is that, if Council follows a normal tender process for this project, a decision on appointing a contractor would not be made until 2016, possibly as late as the first Council meeting in February 2016.
This would result in a delay of this project of over two months, potentially creating a significant financial impact for Bunnings by delaying the opening of this store.
Additionally, if Council was to reject the Bunnings proposal, Bunnings would have no other commercial option other than to re-engage Hamcon Civil to undertake their portion of the works on Leeds Parade. This would require Council to seriously consider utilising the extenuating circumstances clause to also engage Hamcon Civil to ensure the works were undertaken efficiently by a single contractor. Alternatively, Council could go through the normal tender process as outlined above. If this approach was taken it is unlikely that other contractors would be too interested in bidding for this work knowing that Hamcon Civil was already on site working for Bunnings and would be well placed to offer a very competitive price for this additional work required by Council. This approach would also result in significant additional costs as the two portions of work would be undertaken at different times, and significant additional work would occur in providing temporary connections between the two components of the project. As well the project would extend over a longer time period, causing additional costs in traffic and site controls as well as inconveniencing road users for a greater time.
Council has engaged Hamcon Civil on a number of similar projects in recent years, with this company delivering good quality, cost competitive works with a strong commitment to WHS and environmental management.