Issue details

OD-013-23 - Part 2- To approve the extension of contract and increase in rates for the Total Asset Management contract

The TAM contract is currently in year 9 of a 10-year contract and is due to end on the 30th June 2024. With just under 14 months remaining on the contract, the Council have appointed Altair Ltd to support the Council with the commissioning element for the replacement contract.
Even though the commissioning process is progressing well, the current project plan will not allow for a thorough commissioning and procurement process to be completed in time for the 1st July 2024. To provide the Council with the required flexibility to undertake a comprehensive process, the current contract will need to be extended by at least 12 months.
Whilst progressing with the commissioning process, we also need to ensure that the current TAM contract delivers the level of service expected by our tenants and leaseholders. However, we are operating in unprecedented times due, in part, to Brexit, the COVID-19 pandemic and now the war in Ukraine. This has led to rising construction prices in the housing sector with repairs and maintenance costs surging over 2021 and 2022.
The above factors have led to the current schedule of rates in the TAM contract falling below market rates, which led to the Council commissioning Ark Consultancy to review the contract rates against the rates in the market. This identified that a number of the rates in the contract are significantly below market rates, which is having a significant impact on OPSL’s ability to attract the required supply chain to deliver the contract to the required level.
This independent review was provided to OPSL for them to propose new rates to the Council prior to entering into a negotiation. The commercial negotiation has led to a number of rates in the contract being increased.
It is important to note that the rates agreed with Osborne in negotiations were below the average market rates identified in the ARK Benchmarking review and thus continue to represent good value for money.
As part of the negotiation process, OPSL have also agreed to the implementation of an improvement plan, which will be led by the Contract And Commissioning Consultant and supported by the Head of Commercial Housing Contracts. This will look at a number of areas across the client and contractor side of the contract, focusing on:
•OPSL proposed overhead and delivery model linked to new rates and determine suitability to deliver services for the remainder of the contract period.
•Targeting specific problem areas/themes within the contract.
•The Council’s processes regarding operational management of the contract.
•Carry out a review / audit of the current OPSL systems and processes and then work with OPSL to develop a targeted annual efficiency saving plan by Osborne for 23/24 and 24/25.
•Undertake comprehensive review of current TAM performance measures to include re-defining appropriate KPIs, the contract affordability, data collection criteria, data sample criteria

Decision type: Non-key

Decision status: Recommendations Approved

Notice of proposed decision first published: 02/06/2023

Decision due: 25 May 2023 by Chief Housing Officer

Contact: Andrew Linden, Head of Commercial Housing Contracts 01442 228263, Email: Email: