The Grenfell Tower owner held a secret meeting to lower renovation costs – including discussing switching to cheaper cladding – despite attorneys warning that it might breach procurement law and could invalidate the main contract, a public investigation of the disaster was told.
David Gibson, head of venture capital at the Kensington and Chelsea Tenant Management Organization (KCTMO), which was running the tower council building for its owner, the Royal Borough of Kensington and Chelsea, organized a “secret” and “disconnected” meeting with the contractor at which they agreed to Save more than £ 800,000 for the investigation committee on Thursday.
The March 18, 2014 meeting was not in session, but Redon later agreed to drop the landscaping work, reduce the cost of windows, and swap out the more expensive zinc cladding panels for aluminum alternatives that became the main cause of the June 2017 fire spread that claimed 72 lives.
This operation reduced the budget from 9.2 million pounds sterling to 8.4 million pounds. The savings of £ 293,368 on cladding was under £ 2,500 per apartment.
Gibson told the investigation committee that he ignored legal advice that such secret negotiations would violate European procurement rules because Rydon had not yet been formally appointed following a public bidding process.
Redon had already submitted a price cheaper than two competing bids and £ 800,000 less than the owner advisors estimated. But the investigation heard that the owner still wanted to increase the savings before the contract was awarded. Neither the engineer nor the owners’ construction advisors were informed of the meeting.
He has investigated I heard earlier How the tower’s owner, Royal Borough of Kensington and Chelsea, lost patience with the first contractor hired on the remodeling project, Leadbitter, when he said the project would cost £ 1.2m more than the budget.
And it also turns out that Peter Madison, TMO’s Director of Asset and Renewal, has a long relationship with Rydon’s Renovation Manager, Stephen Blake, having previously worked with him. Blake splurge In one email 10 days before the cost-cutting meeting it was “informally notified.” [by Maddison] We are in center stage – our losing stance. “
On the same day the meeting took place, Redon was appointed as the preferred presenter in a formal letter that did not state that he agreed to cut at least £ 800,000 from his official bid. TMO lawyers warned that such negotiations would be in breach of EU regulations, stating that “value engineering” could take place after the contract is awarded, but not before. Gibson read and understood the legal advice, and knew that his negotiations with Reedon were against the advice, he said.
“There was good reason not to tell other bidders that one of the reasons for the award of the contract was that Redon agreed to reduce its price by £ 800,000 or so,” said Richard Millett, the investigating attorney. “This is because if they find out that TMO was discussing cost savings with Rydon before awarding the award, it increased the risks of challenging the award decision.”
It’s true, Gibson said.
Millett suggested in his interrogation that Gibson had performed “an improper and penetrating operation with Rydon” and he knew it was wrong. This explains why Gibson was not mentioned of the meeting in a witness statement to the Commission of Inquiry, who said that the tendering process was “rigorous and transparent” and was conducted within European Union rules.
Millett suggested that this was “misleading”. “I don’t agree,” Gibson said.
The investigation is ongoing.