2.29 In October 2018 the Sandwell Trust launched a full procurement procedure under public procurement regulations for the main construction contract to complete Midland Metropolitan. Balfour Beatty, the Trust's 'early works' contractor, was the only eligible bidder for the main construction contract who met the qualification criteria, so there was no competitive pressure on the price. The Departments reviewed the process to mitigate the risk of an elevated price. The Trust awarded the contract to Balfour Beatty in December 2019, following HM Treasury's approval, in October 2019, of the business case to complete the hospital. The Trust believes that the need to put together a new business case for the hospital and run a full procurement process has delayed restarting construction by 15 months.
2.30 The Trust agreed a 'target price' with Balfour Beatty for its work. The contract contains risk-sharing terms by which Balfour Beatty will absorb construction costs over the target price and share savings with the Trust if they complete the contract under the target price. The risk-sharing agreement also required Balfour Beatty to carry out due diligence on the work of Carillion and its subcontractors on the site before agreeing the final contract. The Trust has appointed the construction consultancy Gleeds as its project manager, to help manage Balfour Beatty.
2.31 The Trust has also obtained warranties for nearly all the prior work carried out by Carillion's subcontractors in addition to those purchased from the PFI company, where it was possible to re-employ those subcontractors. This and the risk-reward contract with Balfour Beatty means that the Trust will only pay extra for unwarranted issues with Carillion's work which become evident after the contract is signed.
2.32 The Trust appointed Engie in January 2020 as a replacement facilities management company to maintain the Midland Metropolitan once it is complete.