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ERC cabinet astonishingly approve the give away £1.71 million of residents cash
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TOPIC: ERC cabinet astonishingly approve the give away £1.71 million of residents cash

Re: ERC cabinet astonishingly approve the give away £1.71 million of residents cash 8 months, 1 week ago #25

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Eaglesham primary School - Proposed Foul Drainage Alterations


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Re: ERC cabinet astonishingly approve the give away £1.71 million of residents cash 3 months, 1 week ago #26

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The wheels are turning slowly, but still turning !!!!!

Current Update.

FOI request was made 10 December 2020.

Response for Request for review received 25 February 2021.

Appeal to Scottish Information Commissioner 12 March 2021.


This update received 23 August 2021.

------ Original Message ------
From: Scottish Information Commissioner Office
Sent: Wednesday, 25 Aug, 2021 At 10:46
Subject: Update on application - new build nurseries - OSIC ref: 202100328

I have now had the opportunity to consider the case in a little more detail about your request for information regarding new build nurseries.

I have numbered the request from 1 to 15, with part 1 being the compensation payment of £803,000 to be made to Heron Bros and part 15 being correspondence - ERC Council Officials and any other parties involved (excluding Scottish Water).

In relation to parts 1 to 3 of the request for financials and terms.

The Council has provided the information it considers falls within scope of the request, which comprises spreadsheets and emails with attachments.

It is taking time to consider this information, as I am working from electronic copies solely.

The Council has provided initial submissions, which I am considering.

The Council may disclose some of this information it no longer considers is exempt to you in the next few weeks, if I hear more I will let you know.

I will need to contact the Council for further input about its submissions, although the information isn’t voluminous, it is detailed and I need to clearly understand the information and why it is being withheld.

In relation to part 8 of the request for the potential cost of the legal dispute, the Council has stated that it does not hold this information in line with its review response.

I need to consider this matter further.

In relation to parts 9 to 15 of the request for correspondence with third parties, the Council has yet to provide us with a copy of this correspondence.

The Council is not in possession of this correspondence, as it is held on portal, which is under the control of the external contractor.

The Council is currently trying to obtain access, but doesn’t know when this will happen, and is keeping OSIC updated.

My manager is aware that the Council has not provided us with the correspondence.

I have expressed my concerns to the Council about this matter, and that it needs to be resolved as soon as possible.

At the moment, we cannot take formal action regarding the lack of provision of the correspondence, however this matter will be included in the decision notice.

As the decision notice is a legal document, the Commissioner can take action if the authority does not comply with any enforcement identified in the decision notice.

If I have any further updates, I will let you know.

Regards

Freedom of Information Officer
The Office of the Scottish Information Commissioner
Kinburn Castle, Doubledykes Road,
St Andrews, KY16 9DS


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You can read the FOI/Review/Appeal that have been posted previously within this topic.
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Re: ERC cabinet astonishingly approve the give away £1.71 million of residents cash 2 months, 2 weeks ago #27

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------ Original Message ------
From: "Mahon, Gerry" < This e-mail address is being protected from spambots. You need JavaScript enabled to view it >
Cc: "Julie Frew" < This e-mail address is being protected from spambots. You need JavaScript enabled to view it >
Sent: Wednesday, 8 Sep, 2021 At 11:47
Subject: Foi - Appeal Early Years

Further to your appeal in this matter, and given the passage of time and the fact that all nursery construction has now been concluded, the Council has reconsidered retention of the attached information and has determined that it can now been released on the basis that it’s commercial sensitivity has reduced.

Yours sincerely
Gerry Mahon

Re: ERC cabinet astonishingly approve the give away £1.71 million of residents cash 2 months, 2 weeks ago #28

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Mahon, Gerry Foi - Appeal Early Years08/09/2021
RE: Early Years Overspend.eml

RE: Early Years Overspend
Wistuba, Tom < This e-mail address is being protected from spambots. You need JavaScript enabled to view it >
To: Adam, John This e-mail address is being protected from spambots. You need JavaScript enabled to view it ; De Lombaerde, Ellen This e-mail address is being protected from spambots. You need JavaScript enabled to view it ;
27/10/2020 11:46
2

John,

In answer to the bullet points in your e-mail.

The allowance for education works in the original bill document was at £205k, this has increased to £220,565.00 during the life of the contract.

The Details below provide a snapshot of the projected costs, worst case scenario.

However this is still fluid at present and subject to (almost daily) change as Education finalise their orders etc.


Screenshot3.png



This is purely speculative notional value at the moment as we have yet to be presented by any additional fees claim from G&T or their sub-consultants.

The sixty two thousand is also a notional balance figure to cover the numerous consultants (25+)employed directly by ERC . throughout the life of the contract, i.e. topo surveys, ecological surveys and works (bats),GPRS surveys, Wifi Surveys, Multivista, etc.

There are numerous Architects instructions and CCF’s for each and every project which cover all the additions and omissions to the contract, including contingency and provisional sums.

These cover the likes of; Value Engineering savings, numerous design development items, i.e. hard /soft landscaping, roads amendments etc.

Exceptional costs include:-
Glenwood -circa £95,000 of road improvements not in tender including drainage,

£27,000 for removal of contaminated soil and £18,000 for Retaining Walls, also not in tender.

Demolition of existing Nursery as required by Scottish water at £66,000.

Overlee - includes for £51,000 of Road and pathway improvements.

Pavilions at Crookfur and Overlee include circa £83,000 each extra for upgrades as per CCF allowances as design development.

Crookfur includes for £72,000 for delay and acceleration measures caused by the neighbouring Parklands owner.

A simplified version would be as suggested below, as per G&T latest cost report , to tie in with the table in my email of the 21st October 2020 below :

Glenwood Road and Car Park Upgrade 95,000

Pavilion Changing Upgrades 165,000

Crookfur Neighbour acceleration 72,000

Other - Additional Scope - (Adds & omits ) -176,000

£156,000

Hopefully this gives you the detail you require.

Regards,

Tom Wistuba

Early Years Programme Manager (Finance)
Environment Department
Strategic Services

Re: ERC cabinet astonishingly approve the give away £1.71 million of residents cash 2 months, 2 weeks ago #29

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From: Adam, John < This e-mail address is being protected from spambots. You need JavaScript enabled to view it >
Sent: 26 October 2020 17:12
To: Wistuba, Tom < This e-mail address is being protected from spambots. You need JavaScript enabled to view it >
Cc: De Lombaerde, Ellen < This e-mail address is being protected from spambots. You need JavaScript enabled to view it >
Subject: RE: Early Years Overspend

Tom,

I need to know the following please;

Details of the additional education equipment and why that wasn’t included initially?

The basis of the provisional sums for G&T and our own additional fee

The reason for additional over budget claim, being (369,000 – 213,000 i.e. 156,000 ) – some examples of what that was for?

Thanks – I need the answers before lunchtime tomorrow please.

Regards.

John



From: Wistuba, Tom
Sent: 21 October 2020 16:34
To: Adam, John < This e-mail address is being protected from spambots. You need JavaScript enabled to view it >
Cc: De Lombaerde, Ellen < This e-mail address is being protected from spambots. You need JavaScript enabled to view it >
Subject: RE: Early Years Overspend



John,

This is the latest figures in consultation with G&T.


Screenshot5.jpg



Regards,

Tom

From: Adam, John < This e-mail address is being protected from spambots. You need JavaScript enabled to view it >
Sent: 21 October 2020 13:59
To: Wistuba, Tom < This e-mail address is being protected from spambots. You need JavaScript enabled to view it >
Subject: Early Years Overspend

Tom,

Can you please send me the most up to date table showing the early Years overspend please.

John

Re: ERC cabinet astonishingly approve the give away £1.71 million of residents cash 2 months, 1 week ago #30

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Mahon, Gerry Foi - Appeal Early Years08/09/2021

FINANCIAL REPORT 8.12.20 - Updated 14.12.2020(647955799_1).DOCX

1 of 17

FINAL 9/02/21

EAST RENFREWSHIRE COUNCIL

Early Years expansion 2020

Summary Paper on Overspend status and financial settlement recommendations

Prepared by Gardiner & Theobald and Major Capital Projects team

October – December 2020

Environment Department – Strategic Services – Major Capital Projects

EdeL\EARLY YEARS - MAIN CONTRACT\8 Fin. Legal & QS\11. EoT & Covid costs

Contents
1.0 Executive Summary
2.0 Legal review with CMS LLP (Herons five new build contracts)
3.0 Construction impact by Covid and restart model
4.0 Scottish Futures Trust Covid workshops with other Councils
5.0 Gardiner & Theobalds Covid 19 negotiations & recommendations (five new build contracts)
6.0 Scottish Water report (Herons five new build contracts)
7.0 Financial Summary Report

Note: This paper mainly relates to the five new build contracts and has contributions from CMS (section 2.0 – 2.6) and Gardiner and Theobald (section 3.0-3.4) and the ERC project team.

It has been prepared to provide a background summary around contract position, other Councils positions and Scottish Government Covid policy notes in the wake of Covid19 pandemic.

Opinions have been sought and assessed against the unprecedented background of continuing to complete five major building projects in the middle of a pandemic.

The Council have been in constant dialogue with the project management team and Contractor to ensure fairness and transparency as we all move through this challenging time.

This paper is a summary of the main actions taken around the management of Covid claims and Scottish water work costs and provided a full overspend status.

1.0 Executive Summary
This summary paper provide legal and financial background information on Extension of Time/Loss and Expense Claims received by Contractors that relate to the Covid19 pandemic disruption.

Covid19 has had a huge impact on the early year’s expansion projects which resulted in all seven early years’ sites being closed for circa 12 weeks in line with Scottish Governments instruction back in March 2020.

Then once site works resumed in June 2020 Contractors have had to follow the Construction Scotland Site Re-start model as directed by Scottish Government and are operating within phase four of the model with the Heron workforce level restricted to 50% of pre covid levels.

This disruption has impacted all contracts both in costs and programme.

In addition Scottish Waters hard line approach to their surface water policy has caught out many Councils which for ERC has had to undertake a range of expensive solutions have incurred extra over costs to the five new build projects.

We have looked at the financial impact that Covid and Scottish Water have had in detail as part of this paper across the early years projects as well as fees and other miscellaneous costs and evidenced the background to and reasons for the overspend which conclude with final summary of costs.

Total estimated overspend is sitting at £1.795million across all seven sites.

This level of overspend across seven projects will equate to 6.56% of the total present capital fund allocation of £27,322,000.00p and approval is being sought for additional funding to cover this amount.

The overall budget is being managed in house by the MCP team and the project manager led by Gardiner and Theobald who have recommended Covid claim settlement figures after a lengthy negotiation with Heron Bros.

2.0 Legal review with CMS LLP (Herons five new build contracts)
The ERC Major capital project team have carried out due diligence and sought advice from our legal services team and construction lawyers CMS Cameron McKenna Nabarro Olswang LLP in Glasgow construction solicitors who has been assisting ERC on the building contract legal matters.

On the 4 May 2020 CMS advised the following:
2.1 Background to Relevant Event/Relevant Matter.
The base contract is a standard form SBCC which is adjusted by a Schedule of Amendments.

The contract reflects the standard SBCC position which is provides the Contractor with a right to claim under the contract in certain circumstances. These circumstances are listed as Relevant Events and Relevant Matters.

A Relevant Event can provide time relief (e.g. fixing a later completion date and therefore relief from earlier liquidated damages).

A Relevant Matter can provide the Contractor with additional costs.

For either claim to be successful it must be proven that such Relevant Events and/or Relevant Matters have impacted upon the Contractor.

2.2 Claims in the Early Years contract
The Early Years contract wording does not contain wording relating to “global pandemics”.

Within the contract there is no wording which would apply to allow the Contractor to claim a Relevant Matter (additional costs) in this instance.

However we have noted below the 2 Relevant Events (additional time) where relief may be sought by the Contractor arising from COVID-19.

2.3 Force Majeure
The delay risk relating to the shutdown of the Site as a result of COVID-19 is most likely to fall to be determined under the contract as a contractual response to a contractual Notice of Delay.

The Contractor gives a written notice of delay to the Contract Administrator and identified in his notice which in his opinion is the Relevant Event.

The Contract Administrator will on receipt of the notice request any further information and then decide whether or not to grant an extension of time.

He does this within 12 weeks of receiving the Notice of Delay.

He would do this based on his opinion on whether any of the delay is caused by a Relevant Event.

Here it may be that the Contract Administrator grants an extension of time on the basis that COVID-19 constitutes a force majeure event.

Force majeure is not defined within the contract conditions and in Scots Law there is no freestanding concept of force majeure.

However the term is frequently used and understood to describe an unforeseeable event outside the reasonable control of either party.

Force majeure will entitle the contractor to claim an extension of time claim under cl.2.27 as a Relevant Event under cl.2.29.14.

The duration of the extension is determined by the Contract Administrator and to be awarded an extension of time the Contractor has to use his best endeavours to prevent delay and to proceed with the works to the satisfaction of the CA (clause 2.28.6).

The occurrence of a Force majeure is not a Relevant Matter and does not entitle the contractor to make a loss and/or expense claim under cl.4.23.

2.4 Cessation of Works in response to Emergency Legislation (cl.2.29.13)
In the event the government passes emergency legislation which has the effect of shutting down the Site and stopping work then an extension of time claim could be made under cl.2.27 on the basis that a change in law has caused delay which is a Relevant Event under cl.2.29.13.

However, again there is no equivalent Relevant Matter so the contractor would not be able to pursue a loss and/or expense claim under cl.4.23.

Currently, while there has been strongly worded guidance issued by the Scottish Government, there has been no emergency legislation passed which requires the closure of construction sites.

We are of the view that the current guidance would not constitute a change in law and would not be a Relevant Event allow the Contractor to claim relief under cl.2.29.13.

It should be noted however, that on 21 April 2020 the Government passed an amendment to the Health Protection (Coronavirus) (Restrictions) (Scotland) Regulations 2020 which makes it a criminal offence for all open business not to comply with social distancing.

Therefore, when the Contractor is performing the works whether in their office, workshop or on Site, they may give a further Notice of Delay on the basis of the Relevant Event - this change in law to accommodate social distancing.

It would then need to be ascertained to what extent the change in law has led to a delay.

Again, however, this would not constitute a Relevant Event and therefore the Contractor would not be entitled to loss and expense as a result of the change in law.

2.5 Right of Either Party to Terminate (cl.8.11)
Both a force majeure event and/or change in law event are potentially termination events (entitling either party to terminate the contract under cl.8.11.1 and cl.8.11.5 respectively) if the event has prevented the carrying out of the whole or substantially the whole of the uncompleted works for a period of more than 2 months.

Following expiry of that 2 month period either party may give notice that unless the suspension of the works has ceased 7 days after such notice has been received by the counterparty, then the Contractor’s employment under the contract is to be terminated.

On termination by either party under cl.8.11 the Contractor would be due payment for work undertaken to the date of termination, payment of loss and/or expense claims ascertained prior to termination, de-mobilisation costs and costs of any materials or goods properly ordered for the Works.

The Contractor would not be entitled to claim losses/damages arising as a consequence of termination.

2.6 CMS legal Summary
The contract provides the Contractor with a route to claim for relief in relation to time but not for costs arising from Covid19.

ERC should be mindful that both force majeure and change in law events causing a delay of more than 2 months could trigger a termination event under cl.8.11.

The Contractor is under an obligation to use “best endeavours” to mitigate any delay – case law would suggest that there is a distinct line between what constitutes “mitigation” and what constitutes “acceleration” and therefore, while the Contractor is under this obligation, this shouldn’t be construed as meaning the Contractor requires to work through the night once back on Site to recover the delay suffered.

CMS are seeing a variety of responses to this situation from both Contractors and Employers.

Some are agreeing to share some of the additional costs arising from the delay.

The thinking behind this being that had the Contractor decided not to follow Scottish Government guidance and stay on site the Employer may have found themselves requiring to instruct the Contractor to suspend works.

In that scenario the Employer would be responsible for all costs and time risk arising from the suspension.

Whereas a Contractor choosing to follow Government guidance to shut down works rather than forcing a client instruction is bearing all the costs.

It may be that the Council wishes to consider sharing some of Heron Bros costs but as it stands this would be a voluntary contribution and not a contractual requirement.

Another element that can be addressed in such a response is to agree to extend the termination trigger point so that it is less likely to be pressed.

2.7 ERC Project leads comments

Building contract clauses don’t always fit the situation and finding ourselves in a global pandemic meant we all had to work together to achieve the end goal of delivering five new early years centres.

During lockdown weekly project team meetings were scheduled on teams to resolve design and technical queries and to ensure any delays to programme were minimised.

This allowed the contract to move forward behind the scenes which has meant programme delays have been minimised.

The support of the Council during this period has been crucially important to the Contractor and this has undoubtedly reduced any risk of triggering the ‘termination’ clause across the five new build contracts.

In such unprecedented times the ERC project team wanted to ensure due diligence so we sought further advice from the Scottish Futures Trust (SFT) and neighbouring Councils (see section 4.0).

Education and Legal services were represented at the SFT workshop meetings and these have proved very useful as it has given us a benchmark of criteria we can assess against.

This criteria has been developed by other Councils in order to fairly asses Covid claims from their Contractors.

G&T have been in negotiations with Heron and the financial settlement figures are in section 5.0.

........../3.0 Construction Covid Impact and Restart Model (15 June 2020)
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