Decision details

The Annex should be treated as exempt in accordance with paragraph 3 of Schedule 12A of part 1 of the Local Government Act 1972, as it relates to the financial or business affairs of a person including the council.

The Cabinet member approved:

1.     The virement of the total sum of £836,572*, in consultation with the Cabinet Member for Resources and Digital Peterborough and the Corporate Director of Growth and Regeneration to the A1139 Junction 17 – 2 widening scheme project from the corporate public realm capital funding to settle the additional construction costs and fees as detailed in recommendations 2 and 3 below;

2.     The payment for construction costs in the sum of £638,000 to Balfour Beatty to complete the project works; and

3.      The payment for associated professional fees in the sum of £230,549 to AECOM for project management and supervision services.

*The two sums in recommendations 2 and 3 do not equate to the figure in recommendation 1 due to £31,977 remaining from the original £18 million budget.

The virement of £836,572 is recommended in order to prevent any further escalation of costs and the need to seek further budget to close down the project. Working relationships between all the parties to date have been amicable with carefully negotiated discussions regarding the construction contract pain/gain share.

If the recommendation is not approved it is likely that the Council will be forced to enter into adjudication proceedings under the dispute resolution procedure identified in the NEC3 Contract. This could potentially incur not only the additional construction and supervision costs but also the expense of the legal proceedings themselves. In this eventuality the funding required is likely to significantly exceed the £836,572 currently being sought.

The alternative option to accepting the current negotiated figure for the construction contract in full and final payment of all sums payable by the Council and to pay outstanding professional fees for design and supervision would be to invoke the dispute resolution procedure (W1) as defined under the contract. This might escalate the issue into further protracted legal negotiations and adjudication.

None.

October 2013 Cabinet Member Decision Notice to award a contract to URS Infrastructure and Environment Limited relating to the duties of site supervision and contract administrator for the A1139 Fletton Parkway Junction 17 A1(M) to Junction 2 Widening Scheme:

http://democracy.peterborough.gov.uk/ieDecisionDetails.aspx?ID=843

            December 2013 Cabinet Member Decision Notice to appoint Balfour Beatty/Civils Limited as the construction contractor for a target cost scheme of £11m:

http://democracy.peterborough.gov.uk/ieDecisionDetails.aspx?ID=867

February 2014 Cabinet Member Decision Notice to appoint Balfour Beatty/Birse Civils Limited as the construction contractor for a target cost of up to £12m:

http://democracy.peterborough.gov.uk/ieDecisionDetails.aspx?ID=898.

January 2015 Cabinet Report to approve the completion of additional works necessary to complete the widening scheme and authorise the virement of £4.5m to the project budget:

http://democracy.peterborough.gov.uk/ieDecisionDetails.aspx?ID=1044