Benefit of Surveys and Reports - Section 6.4

24  This section of SoPC deals with surveys and reports.  Latent defect risk is only applicable when existing facilities are taken over by the bidder and is not covered by the Model Contract.

25  However, the guidance on obtaining more detailed survey information is relevant to (e.g.) site surveys.  The options are:

25.1  the Local Authority can commission more detailed surveys.  If this option is followed, the Local Authority should agree the specification and appointment with the short-listed bidders and either ensure that the survey can be novated or transferred to the successful bidder, or that an appropriate warranty is available in its favour.  The successful bidder should in turn reimburse the Local Authority for the costs of the survey (if this represents value for money);

25.2  an alternative may be for the short-listed bidders to jointly commission, and pay for, surveys to their specification, perhaps with the successful bidder reimbursing the other bidders;

25.3  if the short-listed bidders (and their financiers) are unable to agree on the scope and terms of reference for the survey work (which is unlikely) each bidder can undertake any survey it feels necessary.

26  If the Local Authority believes the bidders due diligence costs could be reduced by the carrying out of a survey (and the reduction in bidder costs is reflected in the bids) then the first option is the recommended approach.  Local Authorities are reminded of the need to comply with the Procurement Regulations if they are to be involved in the appointment of the surveyor (and the value of the appointment exceeds the relevant threshold) and to avoid inadvertently taking back risk.  Local Authorities should not warrant the survey.