Agenda item

            The Committee was advised that an in-ground gas extraction system on the Dargan Crescent area of the Duncrue Industrial Estate had been in operation for many years for the protection of buildings from the hazards associated with the potential ingress of landfill gas.  The Council was required, in accordance with legislation, to undertake steps to mitigate any risks arising from methane which might emanate from the ground in that area and, since the existing gas extraction system had reached the end of its useful life, it was essential that it was replaced for reasons of health and safety.  The Committee had previously approved the acceptance of a tender under the general scheme of delegation for the aforementioned system.  However, the tender which had been recommended for acceptance had been significantly in excess of the approved budget and, in accordance with financial regulations, the tender was being presented for the Committee for specific approval.

            The Director of Improvement reported that the tenders had initially been invited in December, 2008 from a select list.  However, only one contractor had returned a tender, which had been in excess of £900,000.  This had been considered to be excessive and tenders had been re-invited using an open tendering process.

            He explained that three tenders had subsequently been received and these had been evaluated in line with the Council’s procurement procedures.  The most advantageous tender, which was also the lowest submitted, was that of Earney Contracts in the sum of £455,990.61 and it was recommended that this be accepted.

            The current capital programme included an amount of £320,000 for this proposal which had been based on an initial assessment provided by the Council’s Consulting Engineer who had advised in relation to the management of the landfill gas.  A subsequent updated estimate of £425,350 had been provided in December, 2008.  The updated pre-tender estimate had not included additional items which had been added prior to the tender process to allow for off-site disposal of potentially unsuitable material to landfill at a cost of approximately £30,000.  The estimate might also have underestimated the premium attached by tendering firms in respect of the difficulty of working in an operational industrial estate and the uncertainty in the pricing of pipework and fittings which was a significant component of the project and was susceptible to the fluctuating price of petroleum.  There appeared also to be a shortage of contracting organisations willing to undertake such a complex and specialist project, thereby resulting in less competition for the contract.

            As the project had been tendered twice already, it was unlikely that further re?tendering would result in any appreciable cost reduction.

            The financial position of the proposal was as follows:

            The Committee approved the acceptance of the tender submitted by Earney Contracts in the sum of £455,990.61 and the making of an application to the Department of the Environment for the sanction to the raising of a loan, if required, to pay for the works.