The procurement timetable was extended on six occasions

2.17  At the outset of the procurement, the Agency expected that the deal could be closed within nine months. They extended the project timetable on six occasions:

a)  In May 1995, the estimated contract award date was slipped to the end of December 1995 due to difficulties in preparing the Agency's statement of requirements and to allow more time for bidders to produce written proposals;

b)  In October 1995, because of the development of a strategy on the services to be included in the project, and the realisation that more issues needed to be clarified in discussion with the three short-listed bidders, contract signature was put back until March 1996; and

c)  After the appointment of Newcastle Estate Partnership as preferred bidder in June 1996, signature of the contract was deferred on four further occasions. In the original project timetable it had been assumed that contract signature would follow the selection of supplier within several weeks. In the event this stage required 18 months of difficult and complex negotiation, including five months in which NEP concluded obtaining external finance for the deal.

Figure 8 shows the progress of the procurement through its main stages.

2.18  The Department and NEP worked together to reduce the operational consequences of this delay. When the Contributions Agency first invited interest in January 1995 they drew bidders' attention to the need to rationalise the estate so as to be able to break or not renew existing leases from 1999 onwards. The original NEP proposal in February 1996 assumed that the new accommodation would be completed by September 2001. Though the negotiation period took a year longer than expected, and the programme as a whole will not be completed until July 2002, revisions to the construction plans agreed by the Agency and NEP mean that some 20 per cent of the new space will be provided 18 months earlier than originally planned.

2.19  NEP told us that they and the Agency were concerned to complete the project in time to enable existing leases to expire as originally planned. To achieve this, NEP decided to undertake detailed design work before the deal was signed but after they had the comfort of having achieved commercial close. This built on earlier design work required as part of the procurement process. Based on progress to date leases should not need to be renewed.