Stadium - Initial Evaluation Report

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London 2012 Olympics

Olympic & Paralympic StadiumInitial Evaluation Report

CLM-1020101-REP- Initial Evaluation-v10

!ocument "istory#

!ocument O$ner#

Paul Dickinson

Revision "istory#

%ersion !ate Reason or c'an(e )ut'or

V1.0 7thFeb 2007 Approved ssue Paul Dickinson

)pprovals#

!his docu"ent re#uires the follo$ing approvals.

*ame Si(nature +itle !ate %ersion

%raha" &arter 'ead of (tadiu" Area

)ob *night 'ead of +ontracts ,Procure"ent

(teve +ork 'ead of (outh Area

!istri,ution#

!his docu"ent has been for"all- distributed to

*ame +itle !ate %ersion

an +rockford Pro/ect (ponsor

Deborah &artlett a/or Venues


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l-"pic , Paral-"pic (tadiu"nitial valuation )eport

+a,le o Contents

Introduction

1.0 Purpose 3

2.0 &ackground 3

3.0 4ist of !enderers 3

5.0 Description of !endered 6orks 3

.0 (u""ar- of *e- ssues

.1 +o""ercial 3

.2 +ontractual

.3 Progra""e

.0 Detailed !ender valuation.

7.0 (u""ar- 7

8.0 )eco""endation 8


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10 Purpose

!he purpose of this report is to provide the DA and ke- stakeholders $ith initial feedback onthe tender sub"itted b- (ir )obert cAlpine 4td 9()4: dated 22ndDece"ber 200. t is notintended to be a full- detailed evaluation but rather an overvie$ for +4; DA and ke-stakeholders to understand the basis of the tender and be a$are of an- ke- issues arising outof it.

20 ac.(round

Follo$ing the P


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+otal Indicative Cost at 2008prices /697290 10:768/ 207880

Cumulative +otal 28760/

!he su" above sets out the e?tent of their priced $orks; ho$ever; the tender contains asubstantial nu"ber of e?clusions; $hich $ill have a financial i"pact upon the tender su";such as

Pro/ect contingenc-. ()4 have proposed the su" of ;0m; but it is unclear $hether DA

or ()4 o$n this contingenc-.

nvitation !o =egotiate Process Agree"ent 9PA: costs of ;19m

+ost ndices set at


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P$+ suggest; initiall-; that the fee percentage should be bet$een 8 and 1. 'o$ever;$hen considered in the conte?t of other profit deter"ination "echanis"s for non@co"petitive;cost rei"bursable t-pe arrange"ents $ithin public sector procure"ent; this could be bet$een5 and 8 dependant upon allocation of risk.

!o deal $ith this "atter +4 have re#uested that ()4 carr- a revie$ of their previouspro/ects setting out their anticipated and actual overhead and profit recover- to establish a fairand reasonable fee percentage that could be applied to the stadiu" pro/ect. DA I +4 $illendeavour to carr- out a si"ilar e?ercise of as "an- construction pro/ects as possible.

2 Contractual

()4 have set out a schedule of ke- contractual issues $hich re#uires further discussionand clarification is re#uired. Discussions bet$een DA I +4 and ()4 are ongoing but the.eycontractual issues are set out belo$

Incentivisation and =s'arin(> principles in respect o +ar(et Cost

()4 are prepared to bear pain for overspend against the baseline target cost but onl- to

the e?tent of putting at risk a proportion of their profit. !his effectivel- "eans that ()4onl- seek to li"it their risk in respect of their profit e?pectation. t does not affect theiroverhead recover-. DA $ill respond further on this "atter.

Parent Company ?uarantee @PC?A

()4 are onl- prepared to offer a P+% fro" (ir )obert cAlpine 'oldings 4td and notthe >lti"ate Parent +o"pan-; =e$arthill. DA have stated their position that the- re#uirea P+% fro" =e$arthill; ho$ever; the- are carr-ing out due diligence on (ir )obertcAlpine 'oldings 4td in respect of their financial standing. Further discussion is re#uiredpending the outco"e of due diligence.

Perormance ond

()4 consider $ording of the perfor"ance bond proposed b- DA as Gon@de"andC andtherefore unacceptable. DA have advised ()4 that the Gon de"andC "echanis" onl-applies $here it is supported b- an ad/udicators a$ard. Discussion is on going.

Contractor arranties ac.ed ,y PC?

()4 have confir"ed this proposal is unacceptable. DA have stated that the P+% "ustfollo$ the Gstep@inC to ensure the contract re"ains guaranteed in favour of the ne$"plo-er. Discussion is on going.

Collateral arranty rom Employer in


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Restriction on Contractor>s c'an(e to Company Control

()4 $ill not accept an- restriction on $ho controls the () %roup of +o"panies. !hisis non@negotiable.

!elay !ama(es provisions deleted()4 $ill not accept unli"ited da"ages. DA have advised ()4 that dela- da"ages$ill be capped but the level of da"ages have not been set.

)cceleration Provisions

()4 $ill not accept an- provision that forces the" to accelerate the $orks $ithout anaccepted #uotation and progra""e.

/ Pro(ramme

!he headline contract progra""e included $ithin the tender sets out the follo$ing ke- issues

+o""ence"ent on site H 3 "onths earlier than currentl- progra""ed co""ence"ent

date of 31starch 2008. !his is pri"aril- due to the bulk e?cavation proposed b- ()4for the (tadiu" bo$l.

3 "onth construction period for the (tadiu"

(tadiu" co"pletion date of 30th(epte"ber 2011 H this is currentl- 7 "onths later than the

planned date for the co""ence"ent of test events in Februar- 2011.

80 !etailed +ender Evaluation Procedure

!he ne?t stage is to produce a detailed evaluation report. !his $ill evaluate ()4Cs bid inaccordance $ith the assess"ent criteria set out in the nvitation !o =egotiate 9!=:docu"entation issued during the fourth #uarter of 200. !he assess"ent criteria stated in the!= $ere

a: Deliverabilit-

b: (uitabilit- of !echnical and Design (olution

c: Value for one-

d: +o"pliance $ith +o""ercial and +ontractual )e#uire"ents

!he process $ill co""ence $ith a Gco"pleteness and co"plianceC check. !his $ill then befollo$ed b- the "ain evaluation.

Completeness & Compliance

!he != docu"entation specified a nu"ber of deliverables that are considered necessar- forGco"pliance and co"pletenessC. ?a"ples include a covering letter and an e?ecutivesu""ar-. !hese ite"s $ill not be scored as part of the for"al evaluation but their inclusion oro"ission $ill be recorded and the ()4 $ill be re#uested to provide an- "issingdocu"entation.

Met'odolo(y or !etailed Evaluation

t is intended to split the evaluation into t$o distinct ele"ents that $ill be dealt $ith;concurrentl-; to reflect the nature of the assess"ent criteria

Part 1 @ !echnical valuation H Deliverabilit- , (uitabilit- of !echnical Design (olution

Part 2 @ +o""ercial valuation @ Value for one- , +o"pliance $ith +o""ercial and+ontractual )e#uire"ents


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!he technical evaluation $ill be undertaken using an evaluation "atri?. !he co""ercialevaluation $ill be assessed b- $a- of a co""entar-. !he "ethodolog- for both parts of theevaluation is e?plained belo$.

t $as clearl- stated in the != that the assess"ent criteria $ere not $eighted hence no$eighting s-ste" $ill be used in the evaluation.

Suita,ility o +ec'nical !esi(n Solution and !elivera,ility

!he technical evaluation $ill be undertaken using the attached evaluation "atri?. !he bidsub"ission $ill be assessed b- a nu"ber of +4 and DA tea" "e"bers each assessingspecific ele"ents related to their specialist kno$ledge and e?perience. ach topic $ill beassessed against the re#uire"ents laid out $ithin the != b- $a- of nu"ber of ke- #uestionsagainst $hich the assessors $ill "ake a /udge"ent. !he bid response to each #uestion $illbe graded according to the scoring regi"e outlined belo$

Scorin( Re(ime Mar.'ighl- Developed

'igh 4evel of +o"petenc- 5

Above Average 4evel of )esponse 3

)e#uires Develop"ent 2

>nacceptable I =o )esponse 1

!his scoring regi"e does not allo$ assessors to Gsit on the fenceC. t re#uires that eachassessor decides $hether or not the response "eets or e?ceeds the "ini"u" standards9scores 3 or "ore: or re#uires further develop"ent 9scores 2 or belo$:.

!his assess"ent process has the advantage that it clearl- identifies those ele"ents that $ill

naturall- be the focus of attention in the negotiation stage follo$ing the assess"ent process.

Commercial & Contractual

!he co""ercial and contractual assess"ent $ill be undertaken b- "e"bers of the DA and+4 co""ercial tea" $ith support fro" DACs legal and financial advisors and $ill assessthe bidderCs confor"it- to the co""ercial and contractual re#uire"ents. !he results of thisassess"ent $ill be provided b- $a- of a co""entar-.

%alue or Money

!he value for "one- assess"ent $ill also be undertaken b- "e"bers of the DA and +4

co""ercial tea" and DACs financial advisors. !he assess"ent $ill anal-se and evaluatethe bidderCs proposals and cost plan to deter"ine $hether the pricing structure and pricinglevel provides value for "one-. !his $ill include bench"arking against si"ilar contracts$here possible. te"s such as the fee level; percentage on@cost proposed and ke- rates $illbe the "ain focus of the assess"ent. !he process $ill also assess confor"it- $ith the DACsbudgetar- re#uire"ents and affordabilit- envelope. !he results of this assess"ent $ill beprovided b- $a- of a co""entar-.

:0 Summary

&ased upon the above the current position is as follo$s

!he tender su" is significantl- in e?cess of the DACs budget; !he tender progra""e provides for co"pletion 7 "onths later than the planned

co""ence"ent of planned test events;


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(ignificant re@designed solution; of the (tadiu" onl-; $ill be necessar- to "eet the revised

DA budget of ;2:m;

*e- contractual provisions $ill re#uire DA involve"ent to achieve resolution;

+larification re#uired of the list of e?clusions as part of the final negotiations;

+oncluding the detailed tender evaluation; planned for "id Feb 2007.

90 Recommendation

!he pri"ar- ob/ective is to develop an l-"pic and Paral-"pic (tadiu" that "eets the DArevised budget and baseline progra""e to allo$ the planned co""ence"ent for test eventsin Feb 2011; unless instructed other$ise. !o do this the follo$ing actions are re#uired

+onclude the detailed tender evaluation b- "id Feb 2007 providing bench"arking data

$here possible.

Develop a re@designed solution to "eet DA budget of ;2:mfor the (tadiu" onl-;

Develop construction progra""e concurrent $ith the re@designed solution to allo$

co""ence"ent of test events in Feb 2011;

Agree short ter" progra""e to facilitate pro"pt resolution of re@design options and

solutions;

ntegrate +4 $ithin the design process to ensure co"pliance $ith design; brief and cost;

(eek DACs position on ke- contractual provisions; i.e. those $hich are non@negotiable;

and

+onclude 6orks nfor"ation concurrentl- $ith the developing brief.

Documents

Stadium - Initial Evaluation Report