Agenda item

DWelsh introduced an update by MPinnell on the re-procurement of housing-related property contracts, noting that there would be more detailed reports coming in the course of the next 12 months.

MPinnell presented the Total Asset Management Contract Procurement Update, explaining that the current TAM had been with Osborne Property Services since July 2014, with an estimated total spend circa £23.5 million per annum. He stated that this contract had been extended 12 months to 30th June 2025 to allow a comprehensive procurement exercise, with the built-in option to extend another 12. He also noted the council had 6 other agreements to cover mechanical and electrical services with a total annual value of £6.2 million, including domestic gas maintenance at circa £3.8 million. An additional number of informal agreements totalling £3 million were in place to cope with demand beyond Osborne's capacity for specialist repairs.

MPinnell noted that the strategy was currently in the commissioning phase. He stressed that with escalating costs in the construction industry, costs were expected to significantly increase, which would be a challenge given capped grants. He explained that the tender phase would invite bidders to submit proposals over a timeline from December to October 2024, noting that all timelines were indicative at this stage due to a number of unknowns.

MPinnell also discussed the gas and maintenance contract, currently covered by Sun Realm and due to expire 31st March 2024, and the commercial contract with Orion Heating, due to end 30th June 2025. He explained that both contracts would be procured ahead of the TAM contract in separate lots, with the key outcome being to move to a single heating maintenance contract with a contractor who could also deal with new technologies beyond gas.

MPinnell also noted that a service improvement plan was being implemented, and that there had been a drop in the amount of time to turn around empty properties. He explained that as part of the contract extension with Osborne they had negotiated an ability to move underperforming areas of work to other contractors if necessary.

Cllr Stevens asked whether data about residents' issues in the pipeline would remain with Osborne or be handed over to the new contractor in the transition. MPinnell clarified that this data would sit with Dacorum, and that all the data Osborne held was currently being migrated over to their systems.

Cllr Pringle noted it was good that the contract had been rewritten to allow work to be reallocated to another provider, but that practicalities made this challenging. She asked whether there were incentives or penalty clauses in place to help prevent any breach of contract, or compensation for residents in the event of this. MPinnell clarified that this reallocation of work away from Osborne would be substantial packages of work such as the entire kitchen programme. He also stated that Osborne had removed the previous account manager and contact centre manager at his request and recruited new staff to replace them. He explained that DBC were currently drawing up a compensation policy as a wider piece of work, to include an amendment or separate policy specifically addressing repairs, which would come through the relevant committees for comment.

Cllr Pringle raised concerns regarding the current improvement in Osborne's service level potentially lapsing once the contract had been re-awarded, and asked whether it would be possible to end the contract in the event they failed to meet contractual obligations. MPinnell confirmed that the new contract would give the council new abilities to impose break clauses, increase scrutiny and implement financial penalties, and noted that Dacorum was working to increase capacity and tenacity on their end to put the customer at the centre of decisions.

Cllr Weston asked if rising costs could mean DBC would have to source more money towards Osborne during the remainder of their contract. MPinnell clarified that new rates had been negotiated with Osborne for the extension at an increase of about 28%, and there would be no further rate increases for any contractors. He noted, however, that the gas contract going out to tender was expected to come in costing more than the existing one.

Cllr Stevens asked whether the TAM heating contract covered community centres and if the new contractors would be capable of bringing in new technologies such as heat pumps to replace current heating systems. MPinnell clarified that they were different contracts, but noted that the sheltered scheme were already having systems upgraded at a cost of about £250,000 a system, with 2 or 3 already replaced. He stated that the same applied to commercial properties, but in some cases leaseholders were responsible for the works, and sites would likely go out to individual tenders due to the scale involved. He clarified that the commercial contract with Orion currently covered the sheltered schemes, and that the ability to install such new technologies would be a key part of the new contract when it went out to tender.