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Rydon director denies ‘secret deal’ with client on Grenfell contract win

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The man in charge of contractor Rydon’s bid for the Grenfell Tower refurbishment has denied his company had a secret deal with the client to land the job

Interrogated over the competitive tender process, Stephen Blake, Rydon’s refurbishment director, told the inquiry into the 2017 blaze which killed 72 people there was ‘no secret agreement’ between the main contractor and Kensington and Chelsea Tenant Management Organisation (KCTMO).

The inquiry heard that Rydon had been told on the 12 March it was in ’pole position’ to win the refurbishment project and that the contract was ’ours to lose’. This came six days before the decision was formally announced to any of the bidders (18 March) and before the company had been interviewed.

The builder had also been told by the KCTMO that, having seen its tender bid of £9.2 million, Rydon would have to find around £800,000 of savings through value engineering. Counsel to the inquiry Richard Millett suggested this had effectively ’changed the basis’ of the tender Rydon and the other contractors had originally bid for.

Internal Rydon emails make reference to Peter Maddison, director of assets and regeneration at KCTMO, being due to send through ideas for value engineering on 13 March.

Rydon and the KCTMO subsequently had a meeting on the 18 March to discuss value engineering measures and the need to cut costs.

Blake said he could not recall whether Rydon’s proposal for £862,000 of savings – and specifically for a cost reduction of £293,000 by switching to aluminium cladding – had been discussed at the meeting.

Later that evening Rydon was formally notified of its preferred bidder status by project manager Artelia. This letter contained no reference to value engineering or a need to reduce the project cost.

A report penned by Mark Harris of Harley also stated, in a log written on 2 April, that ‘Simon [Lawrence, of Rydon] advised that no decision will made on value engineering until the contract is formally awarded, to avoid other main contractors being given the impression that they were not given equal opportunity to look at value engineering’.

The report went on: ‘In the interim we have been asked to obtain a Nedzink sample for comparison purposes. The current exercise of obtaining alternative samples is being referred to as the ‘design process’.

The inquiry also heard that Blake had known Maddison since 2000, with internal emails from Artelia in October 2015 noting: ‘[Maddison] is conscious that his relationship with Steve [Blake] goes back a long way and Steve talks to him direct’.

‘However, Peter does not want that relationship to circumvent Artelia and bypass the role that we are playing in trying to get the project finished to the required quality and within budget.’

Blake was due to finish giving evidence to the inquiry yesterday (28 July) but was called back to answer more questions this morning.

david hughes

david hughes

David Hughes

His evidence follows that of colleague David Hughes, who told the inquiry on Monday (27 July) that he had authorised a change in insulation product without telling the architect, building control or the KCTMO. 

The inquiry had already heard from Simon Lawrence, a contracts manager at Rydon, told the inquiry that nobody at the contractor had the technical expertise to know whether designs for Grenfell’s cladding, or materials selected for its insulation of cladding panels, complied with regulations. 

But Hughes, a site manager at Rydon who joined the Grenfell Tower refurbishment project after Lawrence left in 2015,  admitted he gave permission to Harley, a sub-contractor which worked on the design and installation of the cladding and insulation, to use an alternative insulation to the one which was specified. 

‘I discussed with Ben Bailey [project manager at Harley] and agreed the use of Kingspan, as Harleys had difficulty obtaining Celotex from their supplier,’ he said. 

Hughes said this took place in December 2015 or January 2016, adding that he did not consider the fire performance of the replacement insulation, but had looked at a data sheet for the Kingspan Kooltherm KS15 to check that it had a similar thermal performance (U-value) to the Celotex RS5000 it was replacing.

The manager, who said he was not aware of the term ‘limited combustibility’ or the principle that walls should resist the fire of spread, said he told the Clerk of Works Jon White, as well as Rydon refurbishment director Stephen Blake, about the swap. 

However, he admitted he did not tell Building Control or KCTMO because he believed the Kingspan and Celotex insulation products were ‘so similar, to me from my knowledge and experience, I didn’t see it as an issue’.

This was despite a clause in Rydon’s contract with KCTMO saying it could not make any substitution for materials which were specified without prior written consent from the client.

The inquiry later heard that Harley has already been using Kingspan insulation before Hughes gave permission for them to do so.

A purchase order by Harley shows it had bought 96 sheets of the Kingspan insulation in May 2015, while a photograph of the tower taken around the time Hughes started working at the site shows Kingspan insulation already installed.

Hughes said he ‘not aware at all’ that Kingspan insulation had already been used on the tower when he gave permission to Harley for it to be used. 

The Kingspan insulation was eventually used on around 6.5 per cent of the rainscreen insulation boards installed on the Grenfell Tower.

Kingspan has said it was unaware its products were used on the tower, adding that the insulation was used ‘as part of a combination for which it was not designed, and which Kingspan never recommended’.

Phase one of the Grenfell Inquiry found that insulation was ‘more likely than not’ to have contributed to the spread of fire over the external walls of the tower during the 2017 disaster, although it said ACM cladding was the ‘primary cause’ for the spread.

Hughes also defended Rydon’s regime for checking proper construction of the tower, saying that it had been ‘quite thorough’ about monitoring sub-contractor work – although the onus was on Harley to make sure it was delivering a quality of work which was specified in its contract.

He admitted, however, that he had never identified any issues or defects with the cladding. Hughes said he had noticed the joins on the insulation boards were not taped and made inquiries about whether they should be.

According to Hughes he was told by Harley that they did not need to be, and subsequently he could find no reference to the need for tape in a product data sheet. He therefore assumed they did not need to be taped.

However, QC Kate Grange, counsel to the Grenfell Inquiry, pointed out that in the Celotex rainscreen specification guide said insulation boards should be taped with aluminium foil ‘in all cases’.

Witnesses from Harley have yet to sit before the Grenfell Inquiry.

Elsewhere in Hughes’s evidence, the Rydon manager said he was surprised by the lack of visits by the Royal Borough of Kensington and Chlesea’s Building Control, who had visited the site just once in 2015 before 15 November, according to official logs.

‘I would expect Building Control to appear at least on a monthly basis,’ said Hughes. ‘Normally if you haven’t called them in for something to inspect something, then they will turn up on a frequency visit.’

The inquiry continues.

Extract from inquiry on 28 July

Counsel for the inquiry, Richard Millett: ‘Do you know whether the client told other bidders that they were changing the basis of the tender?’

Blake: ‘That’s after the tender adjudications or comparison has been done.’

Millett: ‘ Indeed, Mr Blake. That’s the point . Were you aware whether the TMO, after the adjudication, had told other tenderers that a value engineering exercise was being pursued?’

Blake: ‘I didn’ t know what they had spoken to the others about.’

Millett: ‘Was there a secret understanding or arrangement behind the scenes that if you agreed to reduce your contract price by £800,000, you would get the job , and you didn’ t feel as if you could go back on that?’

Blake: ‘There was no secret arrangement.’

Millett: ‘Did it occur to you at the time that if this exercise of changing the basis of the tender, as you put it , came to the knowledge of the other tendering contractors , the tender process and Rydon’s appointment as preferred bidder would be likely to be subject to a challenge? Did that occur to you?’

Blake: ‘I didn’ t consider that for a moment…… I see that a fair tender has been carried out, we bid, and we were chosen. Thereafter, should the client wish to make adjustments to their budget, that’ s their volition .’

Millet: ‘You see, it wasn’t thereafter , is my point, it was before the decision to appoint you, and I just wonder whether you can shed any light on why the discussions about value engineering had taken place prior to 18 March as opposed to consequent or subsequent to it?’

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Readers' comments (3)

  • The tragic Grenfell case is THE prime example of D & B stitch up. All architects should now fully understand, take care, beware of and advise all clients of that "racket" - and then also avoid disastrous "value engineering" and subsequent moral, legal and PI consequences.

    An old practitioner whose "been around a while"!!!!!!!!!

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  • Being unable to recall whether a meeting on value engineering discussed a change of cladding specification is surely why - unless they're only casual chats, meetings are minuted, aren't they?

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  • Industry Professional

    Here is yet another example of why the need for genuine value engineering ends up being cost cutting and inappropriate compromising. People like to call it value engineering because that makes it sound more professional but those holding the purse strings need to appreciate how critical it is to understand that the consequences of such changes and who REALLY needs to be consulted. They kid themselves those they are talking to know what they do but too often the latter do not.
    Having started as a site manager back in 1984 before moving to design, I still have some appreciation of what it can be like on site. It does seem as though a much more thorough authorisation procedure for material supplier changes needs to be implemented across the industry.
    Jeffrey - an engineer - comments made via the IHS

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