Karakusevic Carson Architects has succeeded in forcing a London council to rerun a contest for an estate regeneration contract following allegations over conflicts of interest
Lambeth Council wrote to residents earlier this month to confirm it was starting a new bidding process for the redevelopment of their homes on the Fenwick Estate in Clapham North after scrapping its original tender for the project’s development manager.
The local authority had picked construction firm Mace to carry out the contract valued at between £4 million and £8 million.
But the plans to demolish and rebuild 408 homes on the estate stalled following a legal challenge from the second-placed bidder, Karakusevic Carson Architects, which had also been involved in early feasibility work.
In a 47-page claim form, filed at the High Court’s technology and construction court on 16 June, the London-based company argued that the way the council ran the procurement was ‘fundamentally flawed’ and called for the contract award to be set aside.
The document accused the local authority of making errors in the evaluation process and raised concerns over a potential conflict of interest.
The claim form alleged there had been links between winning firm Mace and Inner Circle Consultants (ICC), the project management consultancy running the council’s Estates Tender Programme.
The claim points out that Fenwick’s current project manager, Jonny Moore, who is one of the bid assessors, was working for the council on secondment from his role at ICC, where two directors were former Mace employees.
One of them, Andrew Starkie, had been a senior employee and bid team leader at Mace before he moved to the ICC in January as a new director – a switch made while the procurement was still ongoing.
This led, the claim form alleged, to concerns about the ‘possibility for conscious or unconscious bias in favour of Mace to have crept into the writing and design of the tender documentation and subsequent evaluation’.
Yet, according to the claim, an internal review conducted by the council found the allegations were unsubstantiated and that Moore was operating ‘entirely independently of Inner Circle’.
A Mace spokesperson added that the company had won the contest fairly and was ‘hugely disappointed’ at the decision. They added: ‘We firmly refute any allegations of improper behaviour or bias in the tender process.’
But rather than face a court battle, Lambeth cancelled the offer to Mace and started the bidding from scratch.
While the local authority denied the procurement was flawed, the defence statement from the south London council said: ‘There may be arguments raised as to the adequacy of the contemporaneous documentation in explaining the council’s decision making.’
Karakusevic Carson partner Paul Karakusevic said ‘alarm bells’ should have rung earlier in the process. ‘The public sector needs to operate in a way that is beyond reproach and avoid a process that could lead to bias in the evaluation,’ he said.
‘We started the legal challenge to ensure Lambeth and other boroughs using external procurement consultants were made aware of potential conflicts of interest.’
Lambeth decided in July 2016 that Fenwick would be one of the six estates earmarked for demolition as part of its borough-wide regeneration programme, which has proved controversial with residents on the other estates.
A town hall spokesperson said it was committed to the Fenwick Estate regeneration, adding: ‘The procurement process in this case was rerun to avoid potentially expensive and wasteful legal action.’
Comment from Inner Circle Consulting
’We utterly refute any allegations of conflict of interest with regards to the procurement process for the redevelopment of the Fenwick Estate. Karakusevic Carson’s allegations are unfounded and entirely misconceived. There has been no finding of conflict of interest by any tribunal or independent body. In fact, Lambeth Council’s independent audit concluded that there were no grounds for Karakusevic Carson’s allegations. We are disappointed that Karakusevic Carson chose to challenge a process that was fairly determined.’