Thanet council’s Section 151 officer – responsible for ensuring the legality and financial prudence of decisions – has raised concerns over the way a contract to replace berths in Ramsgate is being carried out.
Finance officer Tim Willis has highlighted concern over whether the proposal to buy two floating pontoons from company Bam Nuttall in a ‘direct’ contract would breach procurement rules because it does not invite bids from any other firm.
The pontoons, which will cost £1.4million, are for the Brett’s aggregate site at Ramsgate Port and for extended berthing at the Royal Harbour for offshore wind farm vessels.
Council Cabinet members will be asked at a meeting tomorrow (November 14) to agree to the deal to buy the pontoons in the two for one offer from Bam Nuttall.
One pontoon will replace berth 4/5 used by Brett’s for discharging aggregates brought to the port via sea.
A report to councillors says: “If the berth becomes unserviceable or is required to be decommissioned the Council would be in breach of this legally binding agreement with the lessee. The existing berth is at the end of its operational life and there is a high risk of service failure and the need to permanently decommission the berth in the near future. The report says not providing the berth facilities would have “catastrophic financial consequences.”
The second pontoon is earmarked for the Eastern Gully at Ramsgate harbour. The report says this would provide space for four larger vessels and free up eight existing berths.
However, the report from maritime services officer Mike Humber says the legality of whether the contract should be open to tenders or whether it can be awarded in a process only open to one bidder – contractor Bam Nuttall – has to be considered.
It also reveals that Mr Willis has not seen the latest legal advice or the project programme, despite being responsible for the proper administration of finance affairs.
The report says: “The Section 151 Officer has had concerns regarding the nature of the contract (whether it is a works or supplies contract, with the consequential requirements to follow Public Contracts Regulations 2015); and the procurement process to be followed, i.e. the justification for direct award, over a competitive process.
“The Section 151 Officer has not seen the latest specialist legal advice, but he is confident that the Monitoring Officer has done so and assessed the risk to the council of the various options.
“Cabinet must seek assurance from the legal comments, and obtain confidence in the legality of the decision to treat this contract as a works contract, and the decision to award the contract direct to BAM Nuttal without competition, when making its decision.
“There remain the questions as to whether or not a competitive tendering process or processes would offer a route that would provide better value for money; and whether or not alternative contract packaging would provide better value for money. This decision is finely balanced, bearing in mind the risks, the novel nature of the proposal, and the substantial value of the contract.
“By directly awarding a combined supply and installation contract for two pontoons with a value of £1.477m, it will never be known if a different packaging and/or competitive route would have yielded better value for money.”
Thanet council says it has had external legal advice from Blake Morgan Solicitors about the risks of challenge involved in making a direct award and concluded “It is not possible to say definitively that this is a works or supplies contract. This is important as a works contract would come underneath the EU Procurement threshold but a supplies contract would not. This question would only be answered by a court, if a challenge were raised.”
The report says there are sufficient arguments in favour of it being a works contract but adds that responsibility is “ultimately a question of judgement for the council, after considering the risks and mitigation measures.”
The report says alternative options would prove more expensive with the estimated cost of replacing berth 4/5 with a floating berth being £723k more than the pontoon offer and a fixed berth costing £1.7m-£2.6 million more.
The pontoons were previously in use during a tunnelling operation in London with the 3 million tonnes of materials excavated used to create an RSPB nature reserve at Wallasea Island in Essex.
The structures will be installed under permitted development rights rather than seeking planning permission. A marine licence will also have to be obtained for each berth.
The council also hopes the harbour berthing will bring an income of up to £596,975 over five years.
Cabinet members are being asked to agree to the spend of £887,000 for the Port of Ramsgate Berth 4/5 Replacement and £590,000 for the Ramsgate Harbour Commercial Berth in the deal with Bam Nuttall and to delegate contract negotiation and signing to Mr Humber, council director of operational services Gavin Waite and council leader Rick Everitt.
The issue will be discussed at the Cabinet meeting tomorrow (November 14).