Building firms concerned AHS contract is ‘closed shop’

Local construction firms are seeking assurances that they still have a role to play in the £36 million new Anderson High School project.

It follows Wednesday’s announcement that one of the UK’s largest building companies, Miller Construction Services, has been appointed as the lead contractor.

The school, to be built at the lower Staney Hill, will be designed by Newcastle-based company Ryder Architecture and it is hoped construction can begin in a year’s time.

This week’s appointments, for what is likely to be the last big building project undert­aken by the SIC this decade, were privately branded a “stitch-up” by some local industry sources yesterday.

In exchange for the government funding two-thirds of the school’s cost, the SIC signed up to hub North Scotland (hubco). The organisation has been tasked with overseeing the delivering of several schools, working with six local authorities in Scotland’s “north territory”.

Locally a consortium of three major construction firms – DITT, Hunter & Morrison and Tulloch Developments – had teamed up to approach hubco with a view to tendering for the main contract, but were rebuffed.

Meanwhile, Irish building firm O’Hare & McGovern has warned it is still considering whether to take legal action against the SIC following this week’s announcement. It had been contracted to build a previous incar­nation of the new school four years ago.

Hubco is a partnership between the Scot­tish Futures Trust and private company Alba Community Partnerships. Alba, made up of the Miller Group and PFI specialists Cyril Sweett Investments, owns 60 per cent of hubco and controls its day-to-day decisions.

Alongside Miller Construction, the Sweett Group is to be a technical adviser for the AHS project. Two other big-name firms, Turner and Townsend and Faithful and Gould, will carry out surveying and certification work.

One respected industry figure said a project of this size was clearly too big for a single local firm. But there was “no reason why hubco couldn’t have entertained a joint venture” combining expertise on the ground here.

“They could have looked at Shetland being a special case, keeping it local – it seems to be a bit of a closed shop.”

Tulloch Developments director Alistair Tulloch said it was a “disappointment” that the local consortium had not been able to tender for the “tier 1” AHS contract.

Hub North’s development director Fraser Innes said 18 contractors and consultants in Shetland had expressed an interest in becoming subcontractors on the project.

Mr Innes said hubco planned to initiate talks with local firms in the next few days.

He said the intention was for a minimum of 80 per cent of project works to be tendered.

“All your members have previously been very clear that support for the local economy is absolutely crucial, and that’s uppermost in our mind,” Mr Innes told members of the education and families committee on Wednesday.

He said so-called “meet the buyers” events had “proved to be a popular and successful means of meeting local companies”, an approach which would be used for the AHS. It is anticipated that the first such meeting will take place before the end of April.

But Mr Tulloch was sceptical yesterday: “Millers is a very, very big company and they’ll soon take their own guys up,” he told The Shetland Times.

“I would think that there’ll not be a lot that will come the way of Shetland contractors at all, personally.”

He said the awarding of the contract effectively ensured that the bulk of the £36 million would not stay in the local economy.

Mr Tulloch is still hopeful his company can supply groundworks and concrete blocks as part of the AHS project.

SIC convener Malcolm Bell said the council would lobby hard to ensure local firms had the opportunity to at least bid for the work.

There is now a tangible sense of optimism among councillors that the 20-year saga is finally nearing its climax. In 2007, the SIC had been all set to plunder its own reserves for a deluxe £63 million replacement school at the Knab.

Mr Bell said: “We’re delighted – it’s another significant milestone on the road to … getting a new state-of-the-art school for in the region of £36 million [while only paying a third of that].

“It’s a successful programme which has delivered public buildings all over Scotland. We have to seek value for money, but clearly this is a first experience with hubco. Obviously we’ll tread warily, but it wasn’t something we could or should have turned down.”

One councillor said this week he felt the project’s management structure seemed “horribly complicated”, but he hoped it would not “end in a right wrangle”.

O’Hare and McGovern were hours away from beginning a £50 million version of the AHS on the existing Knab site in 2009 before councillors’ last minute change of heart.

Director Eamon O’Hare this week said the council had promised his company would have the opportunity to tender for the new contract.

He said the company felt aggrieved it did not get that opportunity and felt the SIC had ignored O’Hare & McGovern’s legal advice.

But Mr Bell said the council – which paid O’Hare & McGovern around £2 million for the work it carried out four years ago – had terminated the contract several months ago.

“We’ve fulfilled all our contractual obligations to them,” he said.


Add Your Comment
  • John Pedley

    • March 22nd, 2013 14:29

    I am somewhat puzzled by this business. It seems to me we have a rather “chicken and egg” situation. According to your article above, and I now quote “The school, to be built at the lower Staney Hill, will be designed by Newcastle-based company Ryder Architecture and it is hoped construction can begin in a year’s time.”
    Could somebody please explain how a contract for the building of a school, or anything for that matter, can be first of all be tendered for and then be accepted as the winning contract when the object of the contract hasn’t even been designed yet!

  • Andrew Miller

    • March 23rd, 2013 18:15

    Hi John,

    To try to answer your question….

    The process of the design all depends what type of procurement contract has been chosen for the project. For example, if the procurement contact is a Design & Build the contractor will take design responsibility for the project but this will be based on criteria outlined by the client (number of classrooms, m2 of building, gym hall, assembly hall, etc).

    Based on the building criteria, when tendering each contractor would of presented a design proposal of how the building will look when completed, but in depth design would not be completed or even started at this stage.

    Hopefully this brief answer helps 🙂


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