Agenda item

The report will follow in a supplementary pack for this meeting after it has been published for the meeting of Executive Committee (due for publication on Monday 30 June).

This item includes confidential appendices and may need to be discussed in exempt session.

A report on the appointment of contractor for stage 4 designs of the Digital Manufacturing and Innovation Centre (DMIC) was presented to Overview and Scrutiny.

Members were informed that the DMIC project was nearing the completion of stage 3 designs and this report concerned stage 4 design only, which was the final stage before the construction phase of the project. This report sought approval to procure a design and build contractor that could work with the project team to complete Stage 4 designs and more accurately determine the likely costs of construction. It was stated that this approach would ensure there was input from the construction contractor prior to the actual construction starting.

It was reported that the project remained on track for the construction to start in January 2026. The stage 4 design work was due to be contracted via a JCT Pre-Construction Services Agreement and following input from costs consultants it had been estimated that the costs of bringing a contractor on board for Stage 4 designs would cost between £250,000 and £300,000. However, as the exact costs remained unknown prior to sourcing updated quotations this report requested delegated authority to agree a contract value of up to £400,000, to provide sufficient headroom and contingency.

A Member asked for clarification in respect of whether the paragraph 5.3 implied that the appointed lead designers of the AHR Architects were selected to design the DMIC project because of their climate change expertise. It was responded that the lead architects possessed background in designing to environmental standards, and the DMIC project specifically would be designed to accredited environmental standards, including local and national climate change policies, the implementation of environmentally friendly features would be scrutinised by the Project Board throughout the design. Some of the features to make the DMIC building environmentally friendly included opportunities for rainwater harvesting, air source heat pumps to provide low-temperature heating, and designs allowing space for a photovoltaic (PV) array on the roof of the building.

The Chair commented that the costs of DMIC had increased from £8 million in the original Town Investment Plan to almost £12 million in the revised Town Deal budget. It was asked whether this added cost was reflected in providing a DMIC building that was at least 50 per cent larger than the original designs. It was responded that allocation of extra funding to the DMIC had been signed off by the Ministry for Housing, Communities and Local Government (MHCLG). It was assessed by officers that the DMIC would provide significant added value for end users with the additional investment, including an increase in lettable space at DMIC from 7,000 square feet to 17,000 square feet.

A question was asked in respect of the target rental rate per square foot of space at DMIC. The Regeneration Project Delivery Manager undertook to obtain and provide this information to Members of Overview and Scrutiny. It was reported by officers that when the business model for DMIC was tested, there was an estimated operating surplus of £60,000 to £70,000 per annum after costs. This estimate was based on 90 per cent occupancy rate.  

Following consideration of the report, the recommendations contained in the report were endorsed by Overview and Scrutiny Committee.

RECOMMENDED that

1)    Officers procure a Design and Build Contractor (for Stage 4 Design Work Only for the Innovation Centre) in line with the Council’s procurement process up to the value of £400,000.

2)    Authority be delegated to the Deputy Chief Executive (Section 151 Officer) and the Assistant Director for Regeneration and Property; and

3)    The contract to be awarded through the procurement exercise detailed at resolution 1 above be funded through the Town Deal Programme.