Agenda item

RESOLVED

1. To award the contract for Sales Agent services for Britannia Phase 2b to Bidder E by way of a call off from the Notting Hill Genesis Estate Agents’ Framework in line with the fee set out in Exempt Appendix A - Tender Evaluation Detail, and

2. To enter into a call off contract and any other ancillary legal documentation necessary relating thereto with Bidder E for the Services under such terms as shall be agreed by the Director of Legal, Democratic and Electoral Services, and authorise the Director of Legal, Democratic and Electoral Services to prepare, agree, settle and sign the necessary legal documentation to effect the proposals contained in this report.

REASONS FOR DECISION

This report outlines the process which has been followed to select a preferred bidder for the provision of Sales Agent services for LBH Britannia Phase 2b during the Strategy, Pre-Sales and Sales Phase of the project’s delivery.

The role of Sales Agent for private for sale homes of this scale and nature is a commodity service from the market, with a number of well known agents available in the market, many of whom have provided similar services to LBH on previous projects

As set out in the Business Case, the procurement for a Sales Agent was carried out using Lot 2 and Lot 3 suppliers on the Notting Hill Genesis Estate Agents’ Framework. This accessed 10 suppliers who had already demonstrated the capabilities to carry out Sales Agent services for private sales.

This role will commence with a review and finalisation of the delivery phase Sales and Marketing Strategy, working with the Marketing and Branding Agent, and Development Manager to ensure a coordinated and appropriate response for the LBH Britannia Phase 2b project.

The engagement will then move into the Implementation Phase, in line with the agreed Implementation Plan and budget agreed during the Strategy Phase. This Implementation Phase will be split into the Pre-Sales Phase and the Sales Phase. A move to commence the Sales Phase of the project will be subject to Cabinet approval, as part of the Contract Award report for the selection of a Design and Build Contractor for the Phase 2b project. This is currently programmed for January 2023.

The expedient instruction of the Sales Agent is key to ensure that this Strategy and Pre-Sales work is completed in order to enable a Sales Launch at the earliest opportunity during the construction phase - this is of particular importance given the requirement to de-risk the development by way of off plan sales. The precise nature and timing of this launch will be subject to the agreed Sales & Marketing Strategy which is the first deliverable of this appointment.

As part of the Quality bid (10% of the 60% weighting), bidders were required to commit to specific outcomes in response to Hackney’s Sustainable Procurement Strategy. The response and commitments of the recommended bidder are set out in paragraph 7 to this report.

In line with industry practice, the fee for Sales Agent Services is predominantly based on a sales commission (percentage) rather than up front Fixed Price costs. To enable flexibility in the commercial models of each bidder, and to pre-empt any additional services which may be called off in the future, each bidder was also asked to submit a schedule of rates. Commission rates were requested for both domestic and international sales, and assumptions clarified to ensure normalisation across each bidder.

As the final fee for the engagement will be subject to actual gross sales achieved, the award of contract is on the basis of any up front Fixed Fees tendered, an agreed Schedule of Rates, and a domestic and international sales commission percentage. An analysis of this by bidder is set out at Exempt Appendix A - Tender Evaluation Summary

8.1  The Project Director introduced the report outlining the process followed to select a preferred bidder for the provision of Sales Agent services for LBH Britannia Phase 2b during the Strategy, Pre-Sales and Sales Phase of the project’s delivery. The Committee noted that the difference between the framework and open tender service had been considered during the business case and it had been found that the timeline to procure in the framework had been more efficient as well having the appropriate expertise in relation to international sales. With regard to the 50% notional split for international and domestic units, this split had been determined for financial cost comparison purposes and the percentage of domestic units was expected to be higher in the sales strategy due to be submitted in the next few months.

RESOLVED:

1. To award the contract for Sales Agent services for Britannia Phase 2b to Bidder E by way of a call off from the Notting Hill Genesis Estate Agents’ Framework in line with the fee set out in Exempt Appendix A - Tender Evaluation Detail, and

2. To enter into a call off contract and any other ancillary legal documentation necessary relating thereto with Bidder E for the Services under such terms as shall be agreed by the Director of Legal, Democratic and Electoral Services, and authorise the Director of Legal, Democratic and Electoral Services to prepare, agree, settle and sign the necessary legal documentation to effect the proposals contained in this report.

REASONS FOR DECISION

This report outlines the process which has been followed to select a preferred bidder for the provision of Sales Agent services for LBH Britannia Phase 2b during the Strategy, Pre-Sales and Sales Phase of the project’s delivery.

The role of Sales Agent for private for sale homes of this scale and nature is a commodity service from the market, with a number of well known agents available in the market, many of whom have provided similar services to LBH on previous projects

As set out in the Business Case, the procurement for a Sales Agent was carried out using Lot 2 and Lot 3 suppliers on the Notting Hill Genesis Estate Agents’ Framework. This accessed 10 suppliers who had already demonstrated the capabilities to carry out Sales Agent services for private sales.

This role will commence with a review and finalisation of the delivery phase Sales and Marketing Strategy, working with the Marketing and Branding Agent, and Development Manager to ensure a coordinated and appropriate response for the LBH Britannia Phase 2b project.

The engagement will then move into the Implementation Phase, in line with the agreed Implementation Plan and budget agreed during the Strategy Phase. This Implementation Phase will be split into the Pre-Sales Phase and the Sales Phase. A move to commence the Sales Phase of the project will be subject to Cabinet approval, as part of the Contract Award report for the selection of a Design and Build Contractor for the Phase 2b project. This is currently programmed for January 2023.

The expedient instruction of the Sales Agent is key to ensure that this Strategy and Pre-Sales work is completed in order to enable a Sales Launch at the earliest opportunity during the construction phase - this is of particular importance given the requirement to de-risk the development by way of off plan sales. The precise nature and timing of this launch will be subject to the agreed Sales & Marketing Strategy which is the first deliverable of this appointment.

As part of the Quality bid (10% of the 60% weighting), bidders were required to commit to specific outcomes in response to Hackney’s Sustainable Procurement Strategy. The response and commitments of the recommended bidder are set out in paragraph 7 to this report.

In line with industry practice, the fee for Sales Agent Services is predominantly based on a sales commission (percentage) rather than up front Fixed Price costs. To enable flexibility in the commercial models of each bidder, and to pre-empt any additional services which may be called off in the future, each bidder was also asked to submit a schedule of rates. Commission rates were requested for both domestic and international sales, and assumptions clarified to ensure normalisation across each bidder.

As the final fee for the engagement will be subject to actual gross sales achieved, the award of contract is on the basis of any up front Fixed Fees tendered, an agreed Schedule of Rates, and a domestic and international sales commission percentage. An analysis of this by bidder is set out at Exempt Appendix A - Tender Evaluation Summary