The Trust wishes to enter into a contract for the construction of the Midland Metropolitan Hospital under a NEC 4 Contract, with a construction company experienced in acute hospital construction.

In December 2015 Sandwell and West Birmingham Hospitals NHS Trust signed a PF2 contract with The Hospital Company (Sandwell) Ltd(“THC”) to design, fund, build and maintain a new acute hospital in Smethwick – The Midland Metropolitan Hospital. In January 2018 THC’s construction contractor (Carillion Construction Ltd) was liquidated. The project agreement with THC was consensually terminated on 20.7.2018.

On 5 October the Trust entered into an Early Works Contract with Balfour Beatty Construction Ltdfollowing a procurement process, in order to manage the site and prevent further dilapidation until the construction arrangements for the new hospital could be re-procured.

The Trust is now looking to appoint a contractor for the construction of the Midland Metropolitan Hospital under a NEC 4 Contract. The detailed Scope is set out within the Contract documents. Key points to note are set out below.

Design and Construction Responsibility

There are a number of Works packages where the Trust requests that Tenderers assume full design and construction responsibility. These packages of work will be collectively referred to as the “D&C Works” and shall include:

(a) Mechanical, Electrical and Public Health Engineering (MEP),

(b) Internal Fit-out (for the avoidance of doubt, “internal” includes any covered space – including the Winter Garden, Courtyard 7, Energy Centres and Car Parks). Clinical functionality design liability resides with the Trust,

(c) Hard and Soft Landscaping,

(d) other specific elements of the Works:

— courtyards 1 & 2 “HALO’s”,

— drainage attenuation tanks,

— (Include any further items highlighted and agreed between the Contractor and The Trust during the tender process).

For packages of works not included within D&C Works (above) the Trust is not seeking for tenderer’s to assume any design risk. These remaining works packages will be collectively referred to as the “Build Only Works”.

Pricing

During the dialogue process tenderers are required to develop an aggregate contractor price, comprising price elements, a contingency schedule, Fee (a variable percentage fee as defined under the contract) and a risk management payment. The Trust has specified a “Not to be Exceeded Price” of 320 000 000 GBP (inc. VAT) in the ITPD. The aggregate Contractor price submitted as part of the final tender must not be greater than this not to be exceeded price.

During the preferred bidder phase the Trust will work collaboratively with the preferred bidder to increase outcome-certainty on those items on the contingency schedule and to mitigate cost exposure to the project. As clarity is achieved, the revised costs for each item will crystallise and be re-allocated from the contingency schedule into the price elements. At the end of the preferred bidder stage, the balance of the contingency Schedule will be liquidated, with any remaining items (and their associated values) moving across to the price elements which becomes the activity Schedule for use within the construction phase.

For the avoidance of doubt, the aggregate Contractor price will not increase during the preferred bidder stage and the contract mechanism will only accommodate reduction. Similarly, the fee or the risk management payment will not increase during the preferred bidder phase. The saving generated by this reduction will be shared on a 50:50 basis with the preferred bidder. This gainshare will be added to, and treated in the same manner as, the risk management payment. This gainshare sum is not subject to a cap (as is that within the subsequent construction phase).