Trust to split cost savings on Midland Met hospital job

Aaron Morby 2 months ago
Share

Contractors considering completing Carillion’s stalled Midland Metropolitan Hospital have been told the project budget has been capped at £320m.

But The Sandwell and West Birmingham Hospitals NHS trust has pledged to share any cost-savings identified on the project once the preferred bidder is selected. Firms will have to accept full MEP design risk on the project.

Now firms have been formally invited to apply for shortlisting to complete the half-finished hospital project.

Three firms will be shortlisted to enter competitive dialogue for up to six months.

Balfour Beatty, which has a £13m contract to safeguard the unfinished hospital, and a Kier/N G Bailey joint venture are expected to pitch for the job.

NG Bailey was managing the design and installation of the full £80m MEP package for Carillion.

Sir Robert McAlpine, Laing O’Rourke and Graham also recently attended a bidders briefing day.

The winning contractor is expected to start in late October 2019 completing the project in 2021.

Trust preferred bidder procurement plan

During the preferred bidder stage the Trust will work with the chosen contractor to increase outcome-certainty on items on the contingency schedule to reduce cost exposure to the project.

As clarity is achieved, the revised costs for each item are expected to crystallise and be re-allocated 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 moved across to the price elements.

The Trust has warned that it would not accept the contractor price to increase during the preferred bidder stage with the contract mechanism only allowing for price reduction.

The fee or the risk management payment will similarly not be increased during the preferred bidder phase. Saving generated by any reduction will be shared on a 50:50 basis with the preferred bidder.

This gainshare, which is not capped, will be added to, and treated in the same manner as, the risk management payment.

 

Latest news

Competition probe launched into construction services

CMA says investigation into possible bid rigging is at a very early stage
2 days ago

Main construction work starts on 50-storey City tower

Lendlease breaks ground at 8 Bishopsgate ahead of three-year+ build programme
2 days ago

Morgan Sindall seals £1bn Essex council development deal

Brentwood Council housing delivery partnership follows Hertfordshire deal
2 days ago

Costain to start £125m Tyneside A19 upgrade

Work on bundled junction upgrades to start immediately
2 days ago

Eric Wright wins Pooley replacement bridge in Cumbria

New bridge to be first single span bridge of its type in the country
2 days ago

McGee clears vast west London site for HS2 crossover box

Costain/Skanska/Strabag JV to build 130m long Victoria Road box for HS2 railway
2 days ago

School wall collapse kills construction worker

Tragedy on school extension site in Bath
2 days ago

Subcontractors wanted for South Coast sites

Work opportunities up for grabs at Meet the Buyer event: Register now
3 days ago

Boost your online presence – join the Enquirer Directory

New site for suppliers and buyers showcases products, services and latest stories
11 months ago

Burst pipe causes flash flood at Battersea Power Station site

Video: Watch dramatic footage of water pouring through major London project
3 days ago

Wates trumpets record order book despite Brexit slowdown

9% fall in construction revenue offset by rise in residential and property services
3 days ago

Vinci wins £100m UCL East student blocks deal

Firm secures Olympic Park twin student buildings
3 days ago

Persimmon launches retention scheme for home buyers

New home owners can withhold cash until any build faults are sorted out
3 days ago

Griffiths to restart Dawnus £14m Swansea road job

Welsh civils firm to take on Kingsway city centre scheme
3 days ago

Hunt for £6bn Meridian Water phase 2 developer

Up to 250 affordable homes to be built in Meridian Two scheme
4 days ago

BBC construction skills blasted over EastEnders set woes

Lack of project management skills leads to £27m cost over-run and five-year delay
3 days ago

Kier slumps to £35.5m loss as problem contracts continue

Workloads wobbling in highways, utilities and housing maintenance markets
4 days ago

Go-ahead for £175m Cumbrian deep coal mine

Plans advance for Britain's first deep coal mine for 30 years
4 days ago

Hi Vis site wear launched for pregnant women

Clothing designed to make life safer and more comfortable "from bump to baby"
4 days ago

Speedy buys powered access hirer for £9.6m

Lifterz deal allows Speedy to offer nationwide powered access equipment hire
4 days ago

Build to rent specialist plans Bolton urban village

Placefirst to use in-house contractor for £27.5m scheme
4 days ago

Water winners revealed for £2bn Severn Trent spend

More contractors win first lots on AMP7 as client revamps working practices
4 days ago

Stranded Carillion chief takes helm at Kier

Andrew Davies named new Kier chief executive
5 days ago

Interserve £170m prison project to be rebid

Ministry of Justice confirms Glen Parva to be tendered as a publicly funded project
5 days ago

Cabinet Office promises Interserve subbies will get paid

Parliamentary Secretary makes pledge in House of Commons debate
5 days ago

Sir Robert McAlpine commercial director exits

Martin Pitt steps down from board after four years at group
5 days ago

Lakehouse subbies plan showdown with Sureserve bosses

Suppliers owed millions to demand answers at company AGM
5 days ago

Tolent to build first homes at £400m Leeds scheme

Builder gets foot in the door with prototype homes for Kirkstall Forge
5 days ago

Interserve subcontractors told it’s business as usual

Outsourcers circle Interserve support services division
6 days ago

Morgan Sindall wins 20-year Sellafield civils deal

Four teams named for Sellafield decommissioning project partnership
6 days ago

Contractor services