Simon Cash of Artelia testifies about cost estimates, procurement decisions, and report modifications during the Grenfell refurbishment planning phase (2012-2013).
00:00:06 yes would you ask mr cash to come back in please
00:00:31 all right mr cash ready to carry on hi i'm indeed yes good thank you yes mr miller thank you mr chairman mr cash and i'd like to turn now to the topic of the decision to re-tender in 2013. now just obey a
00:00:44 in 2013. now just obey a by way of background it's right i think that in late 2012 and early 2013 twitching lim produced a number of budget cost estimates for the refurbishment didn't she correct yes and just in brief would you
00:00:57 correct yes and just in brief would you agree that a budget cost estimate is a pretender report on costs so that the client can compare them with the contractor's tenders yes they vary in detail as the design
00:01:08 yes they vary in detail as the design develops
00:01:09 develops through that stage yes yes and you monitored and supervised ms lim's cost analysis process i think as you told us before
00:01:15 before correct yeah now i just want to look at some documents showing the artelia cost analysis as against the tma's budget we know from the documents that ms lim did i think several cost estimates
00:01:27 did i think several cost estimates can you confirm what we know from the documents already that from stage d onwards every cost estimate that ms lim prepared was over the tmo's eventual budget
00:01:37 budget of four point that sorry 8.4 point sorry 8.415 million for construction correct yes that's 8.415 million
00:01:48 correct yes that's 8.415 million uh and just an example of that to see it in the documents we can see a rt406140 this is the stage d
00:02:00 this is the stage d report which artelia prepared on costs of december 2012 for the tmo you can see that on page one and from page three if you look at the second
00:02:10 second to last paragraph stage d costs have been
00:02:14 been have now been developed in parallel with the latest design to give an estimated total construction cost of 8.415 million pounds excluding vat including contingency at 10 but
00:02:25 including contingency at 10 but excluding fees and an estimated overall project cost of 9.645 million excluding that can you confirm that the artelia estimates
00:02:37 estimates after that did not reduce to a figure less than
00:02:41 less than 8.5 million pounds odd i think that's correct
00:02:44 correct yes given that did you ever did you ever think to yourself that the ktmo could not afford this project given the discrepancy with the tmos budget that you had
00:02:56 budget that you had yes they wrote in terms of the funding that they had identified as being available at the time yes did it ever occur to you that they couldn't afford this project in other words their budget was too low for construction costs and
00:03:07 was too low for construction costs and fees
00:03:07 fees not that their budget was too low that their expectations were too high right that may that may be a uh the same thing depending on whether the coin lands tails
00:03:19 the coin lands tails up or heads up it is but in in reality what we
00:03:22 what we you start with is what you have in your pocket and um what we normally find is that clients expectations in terms of what they were trying to what they tried to achieve the money that they have to afford is
00:03:33 the money that they have to afford is normally in excess of their expect you know in terms of it it's in excess of what they what they can afford it has to be managed i i follow i i think we have the your evidence on that um can i then turn
00:03:46 your evidence on that um can i then turn to
00:03:47 to um the lead bitter costs uh now in early 2013
00:03:51 2013 miss lim engaged with um mr kotecha of ledbitter didn't he didn't she yes and
00:03:58 and that was specifically on the subject of ledbit as cost budget for the refurbishment do you remember that yes yes and ledbetter's budgets were consistently higher than artelias weren't they yes um if we look at your first witness
00:04:09 yes um if we look at your first witness statement of page 30 please we'd look at paragraph 96 and 97 i'd like you to read those in full um well i'll show them to you in full 96 you say the tmo is concerned
00:04:21 in full 96 you say the tmo is concerned about the gap between ledbetter's costs and its budget as seen in paul duncan's emails to alan dawson on the 15th of march 2013. in allen's response to paul duncan he noted led but has continued failure to engage with the
00:04:33 continued failure to engage with the questions asked of it as follows and then he sets out the text of that as discussed when we met the level of detail being provided by ledbitter is very lean even acknowledging that it's based on stage d
00:04:43 stage d information see attached by way of example we've repeatedly asked for more detailed breakdowns which led bitter have not provided this makes it very difficult for us to make proper comparisons we hope therefore that the proposed
00:04:54 we hope therefore that the proposed face-to-face meetings with ledblitter and their supply chain will allow us to interrogate their figures straight alliances in more detail and so help unblock this current and pass and thus put us in a position to give you clearer advice on the matter
00:05:06 clearer advice on the matter and then it continues allen continued to press
00:05:10 press ledbet for better information as seen in his emails between the 15th and 20th of 2013. however ledbetter continued to be unresponsive despite peter madison making his frustration clear to colin
00:05:21 making his frustration clear to colin chiles
00:05:21 chiles in his email on 20th of march 2013 allen also reiterated his concerns to colin giles
00:05:26 giles on the 21st of march 2013. now um you say in paragraph 97 there that ledbetter continued to be unresponsive did you mean that they just didn't
00:05:37 did you mean that they just didn't communicate at all i think that was the the uh implication yes yeah i mean they wouldn't break down their costs into into segments is that is that fair correct and they didn't agree
00:05:49 correct and they didn't agree certainly with artelia's costs correct is there anything else that they failed to do by way of communication i can't remember if there were any other specifics right miss lim who had done the detailed analysis of the lead of ledbetter's
00:06:01 analysis of the lead of ledbetter's costs
00:06:02 costs um says in her evidence that she felt that ledbetter had not provided adequate detail or support for its figures would were you of that mind at the time yes and and she also says uh that she wasn't convinced by what
00:06:14 uh that she wasn't convinced by what ledbetter was saying and found their lump sum
00:06:17 lump sum approach suspicious that's her witness statement
00:06:20 statement art fought four zero five eight one seven at page 15 paragraph 53 again was were you of that mind at the time as well i wouldn't say that i was suspicious i was just concerned that they weren't giving sufficient detail to allow us to
00:06:32 giving sufficient detail to allow us to interrogate their figures to find out what was actually contained within their budget estimates very well now we've seen that paragraphs 96 and 97 of your statement that you've given a a sort of
00:06:43 given a a sort of recitation of the record shown by those emails
00:06:47 emails can we go to an email from ms lim to mr dawson
00:06:52 dawson at art 406095 this is the 21st of january 2013 and she says hi alan unfortunately there's no breakdown provided by them just a lump sum figure
00:07:04 just a lump sum figure and she goes on to say it's difficult to take a view at this stage as they didn't provide any rates and she makes some comments we're providing a a w would it be enough in principle for lead bitter to provide a lump sum figure
00:07:16 lead bitter to provide a lump sum figure and no rates it wouldn't allow us to do a reasonable comparison to understand where the differences were between our figures and theirs and that's why you'd want a breakdown presumably correct and rates i see um were you personally
00:07:28 and rates i see um were you personally looking for any of the detail of ledbetter's figures during this period this is january 13 through to april 13. yes did you think ledbetter should have provided more detailed breakdown and
00:07:39 provided more detailed breakdown and rates
00:07:39 rates yes i do did and did your view of ledbit um during this period
00:07:46 period from january 39 was becoming more positive or did it stay the same that they remained unresponsive it remained the same despite uh requests for them to provide further information right well let's look at mr kotech's
00:07:57 right well let's look at mr kotech's side of the story he was lead project surveyor for lead bitter and i'd like just to show you what he says in his witness statement this is
00:08:04 this is lb um lbi403938 at page two
00:08:14 and he says that page two paragraph seven
00:08:17 seven um due to the limited design information provided by the client's professional team
00:08:22 team and the high level nature of the specifications issued by the tmo and all their professional teams throughout the tender process my knowledge and involvement in the grenfell tower refurbishment project was limited
00:08:32 limited to carrying out a basic feasibility study rather than the provision of detailed proposals in this regard i work with the with the set of tender documents provided by the client's consultant team in order to develop the basic cost plan
00:08:43 develop the basic cost plan issued by apple yards into an elemental market tested cost plan which is a more detailed review of the cost in a package by package breakdown which highlight the allowances for each construction package
00:08:55 construction package now he's criticizing the design information provided by the grenfell professional team as limited and high level
00:09:03 level would you agree with mr ketech's assessment that the designs and specifications that led better received were limited and high level no i wouldn't agree with that around the basis that they were
00:09:14 basis that they were reaching stage d which is a technical level
00:09:17 level right can we look at colin chiles's witness statement he's another gentleman mentioned by you in the context of this exchange or period
00:09:25 period this is lbi 409 3936 please page five paragraph five um sorry i want to show you paragraph 17
00:09:36 um sorry i want to show you paragraph 17 and 18 on that page page 5. under the heading cost proposals and submissions made by ledbetter he says as a general comment given the underdeveloped nature of the client specification and design
00:09:47 specification and design ledbetter was not in a position to put forward firm pricing proposals nevertheless we continued to provide budget advice and began to review buildability issues the design was in an undeveloped state and whilst areas of the design developed
00:09:59 and whilst areas of the design developed in a good way for example internals on the lower floors the brief remained fluid with elements being added removed or adjusted in various areas of the tower certain areas of the design were subject to redesign for budgetary reasons and
00:10:11 to redesign for budgetary reasons and consequently the ledbitter team had to carry out
00:10:13 carry out repeat costing exercises and at 18 he says this the design was far from sufficient to provide detailed prices and our commercial team had to take robust views of budget costs
00:10:25 had to take robust views of budget costs to ensure a deliverable budget could be achieved
00:10:27 achieved with the supply of supply chain with the advice of supply chain members where necessary
00:10:32 necessary the headline figure in our initial budget was substantially above the cost plan
00:10:36 plan some provided by apple yards alternative materials to adjust budgets were proposed by the client's design team however as the design was underdeveloped this
00:10:45 this did not permit substantial movement of the budget costs that's what he says and uh picking out what he says there is the design in an undeveloped state and fluid was it your
00:10:56 undeveloped state and fluid was it your view that the design was sufficiently detailed for a contractor to be able to provide a cost breakdown which the time you which the gmo and artelia sought of the level of detail that we were looking for we were looking for
00:11:07 looking for we were looking for supporting information that sat behind the lump sum figures we weren't looking for a firm pricing proposal
00:11:14 proposal do you accept that the design was underdeveloped and fluid such that it was
00:11:19 was justifiably difficult for ledbetter to provide detailed prices no i don't i think that there was sufficient detail within the information that had been provided there were elements that were still fluid in terms of
00:11:29 of uh final decisions but the principles of design were still there right can you account for why it is that both um of these um individuals from ledbetter mr kitecher and mr charles were of this view that the
00:11:41 mr charles were of this view that the design was undeveloped and fluid and insufficient information was available to them to be able to provide a detailed breakdown of the costs
00:11:50 costs i don't know why they say that you don't you can't account for it right
00:11:56 right let me just try and give you some examples i mean do you remember we can go to documents if you need it but let me just suggest them ledbetter had suggested value engineering on cladding stairs and reduced insulation insulation
00:12:09 reduced insulation insulation do you remember that yes and then suggested
00:12:12 suggested savings on cladding of three hundred thousand pounds in fact haven't they yes remember that yes and also i think there was a suggestion from andrew mcquatt of max ford max fordham um in february of 2013 about
00:12:24 2013 about alternative boilers do you remember that uh
00:12:27 uh vaguely yes so even at this stage is it right that in fact ledbit although they couldn't provide the breakdown we're nonetheless suggesting ways of making the budget or reducing their budget by way
00:12:39 budget or reducing their budget by way of um
00:12:41 of um value engineering correct but that was in respect potential changes not in respect of the design that had been carried out to that point in time yes
00:12:54 now excuse me um as part of the cost analysis work i think we know that artelia sought to check the prices of other contractors remember that yes can we look at art409136 please
00:13:09 yes can we look at art409136 please this is an internal artelia email of march 2013 and you're copied in on all of the emails in this string it runs over a number of pages if we can just look at the the top one
00:13:20 if we can just look at the the top one it's from alan dawson to robert powell and you're copied in on it 22nd of march 2013
00:13:26 2013 and uh he
00:13:30 and uh he says to robert powell twitchin is now advised that waits and wilma dixon have come back with the two best performance ratings from our database so i'd suggest that they're the two we need to talk to for the purpose of this
00:13:41 need to talk to for the purpose of this high level cost check exercise in terms of the time frame
00:13:45 frame this will largely depend on when we're next meeting with the client which has yet to be resolved pending led but it's availability but i thought we should have a cost back for the end of next week latest now the reference there to a high level
00:13:56 now the reference there to a high level costs check exercise do you remember remember that uh topic being discussed yes i do do you know why um a high level costs check was done to try and uh provide
00:14:09 was done to try and uh provide a a check against the cost estimate that we had prepared and against the figures that led bitter were submitting to see if
00:14:20 led bitter were submitting to see if um to see where a market test might put uh to effectively another opinion of what the job might cost right is this something that happens on other projects
00:14:31 something that happens on other projects yes it is structural projects generally it is yes let's go to art409101 because we we can scroll forward in time to the 23rd of april 2013
00:14:42 to the 23rd of april 2013 to this documents mr cash this is a status report of april 2013 produced by apple yards correct uh now do you remember that this was issued to paul duncaton of the tma
00:14:54 was issued to paul duncaton of the tma and signed off by robert powell of apple yards as it then was i remember it being issued right but not i can't remember specifically being issued to paul duncan when it no all right well when it was
00:15:05 right well when it was you do you think that you read it or really or approved it in any way before it was sent out i was aware of the contents of it yes right did you have any personal input into it
00:15:14 into it uh he was prepared by robert powell and uh
00:15:17 uh then i would have reviewed it right i see
00:15:21 see so if we look at page 18 in this document under paragraph five procurement principle contractor
00:15:30 and picking this up at the third paragraph down uh it says given the present issues surrounding the project and acknowledging that the cause of at least some of the delays and
00:15:41 of at least some of the delays and inability to reconciliate as it's put will cost plans between apple yards as pqs and leadbitter have been suggested due to a lack of responsiveness and proactiveness on ledbetter's part it has been
00:15:53 on ledbetter's part it has been suggested that yemen might be best suited to procure an alternative principle contractor for the project you see that and then in the next paragraph um it says it's currently being considered
00:16:04 it says it's currently being considered that an alternative framework might give the tmo access to other contractors capable of better delivering the gtrp project
00:16:14 and then five paragraphs down on the same page
00:16:18 same page it says that today the lhc framework has been identified as a possible solution and a number of contractors available on this framework have been requested to provide a check price against ledbitter based on a short
00:16:29 price against ledbitter based on a short scope of work and drawings provided to them and then there are four entities set out waits wilma dixon higgins contracts and lake house just uh can you help us the lhc
00:16:41 just uh can you help us the lhc framework what is that um it is a framework that is been through a pre-selection process to identify contractors for a particular um for particular works
00:16:54 um for particular works right now rbkc were part of the lhc framework southern england region i think weren't they i believe so yes does that mean that they could procure works from each of those lhc contractors listed in
00:17:05 each of those lhc contractors listed in the bullet points yes yes so just to explain for everyone's benefit that meant didn't it that the tmo could appoint them without a competitive tender i'm not sure what the terms of the nhc
00:17:17 i'm not sure what the terms of the nhc framework are specifically as to whether they'd be required to go through a what is termed mini tender process or whether they could be appointed direct i see but um whether it's one or the other of those
00:17:28 other of those it wouldn't be a full-blown ojeu style tender
00:17:32 tender correct right now i do you remember that none of those contractors weights wilma dixon higgins or or um or lake house returned check price estimates in the end did they
00:17:44 estimates in the end did they no they didn't no an nhc does that stand for london housing consortium yes it does um ryden i think was also asked to provide a market check wasn't
00:17:55 asked to provide a market check wasn't it
00:17:56 it yes it was and we can see that from the next document i want to show you that's a rt409105 please that's an email run in april 2013.
00:18:06 2013. page four takes us to the email of the fifth of april from mr from robert powell to steve blake you see that yes
00:18:20 um and it starts oops um yes that's it um we can keep on that one there are a number of emails but that's the email to look at and he said
00:18:32 that's the email to look at and he said he says to steve blake in the second paragraph perhaps you would look at the attached supporting information for the proposed redevelopment of grenfell tower rbk and c if you would be prepared to venture a
00:18:43 c if you would be prepared to venture a check price against this it would help us recognizing that we need to agree a usable framework straight means procurement with rbk and c as mentioned we are talking to more than one contractor in consideration of such
00:18:54 one contractor in consideration of such an appointment and our client is looking to utilize their existing frameworks to procure
00:18:58 procure same did artelia have an existing relationship with ryden no do you know who put robert powell in touch with steve blake at ryden
00:19:09 touch with steve blake at ryden no was it peter madison possibly i don't know you don't know
00:19:15 right can we then look at art408434 this is a little earlier in time
00:19:26 this is a little earlier in time uh no it yeah yes and it's um 8th of march 2013 email run about the costs check and uh on the 8th of march you can see that
00:19:37 on the 8th of march you can see that alan dawson writes to you and twitchin lim
00:19:40 lim saying simon tricia and as i thought ryden aren't on either framework please see below
00:19:45 see below so whilst i've already spoken to them this afternoon away and a way to call back on monday i'm not sure that they could be used moving forwards you see that yes and then you come back by way of response about an hour later
00:19:59 by way of response about an hour later and say uh alan my view is that you explain the situation to ryden and see if they're still happy to assist they may say yes as a means of developing a relationship with apple yards
00:20:10 relationship with apple yards now we can see that you've been involved in a discussion about a month before about approaching ryden to quote so at this time ryden weren't part of any framework involving the tmo were they
00:20:26 they weren't involved in either the particular frameworks that were under consideration no would that mean or did that mean at the time that the tmo wouldn't be able to appoint ryden directly to the project or off one
00:20:38 ryden directly to the project or off one of the
00:20:39 of the frameworks it meant that right would have to compete in an open competition and win it unless there was another framework that the tmo could procure through that rydens were actually
00:20:50 rydens were actually part of indeed but did you know of one i didn't no
00:20:53 didn't no i don't think one was suggested was it i don't believe so no
00:20:59 now just going back to the email to which you're responding this is from alan dawson to you on the 8th of march in his last sentence there he says any thoughts on this is i'm a little reluctant to draw them in under false
00:21:10 reluctant to draw them in under false pretenses
00:21:11 pretenses and or do you have any preferences for a n other
00:21:14 n other did you envisage it at this time that ryden might be appointed to the grenfell project
00:21:18 project had no intent no no um vision that they may or may not be right so i think you wanted to be above board with ryden and make clear to them that they were only being asked to
00:21:29 them that they were only being asked to provide a price but if if they had to if they were going to come in they'd have to take part in an open tender potentially yes
00:21:38 at all events i think it's right in the end that ryden didn't actually provide a market price or market check price to artelia at this time did they i don't think they didn't know can we then turn to a different
00:21:50 can we then turn to a different sub-topic which is rbkc's role in this um can we go first art 50636 please this is an email to you
00:22:02 [Music]
00:22:07 sorry from you to an email address called um 11833 grenfell tower subject grenfell tower regeneration
00:22:18 subject grenfell tower regeneration project led bitter um and it's in the text is addressed to alan dawson just just help me what's 11833 grenfell tower
00:22:28 tower that's uh an internal email address which would distribute to myself alan dawson treeton lim and keith bushel and david hale
00:22:41 and keith bushel and david hale so it was rather than using individual internal email addresses it was a uh it was a group email address yes i see and you say you alan you should also be aware of the email that laura johnson has sent to
00:22:53 email that laura johnson has sent to lead bitter which is more specific than marx and clearly states that they are recommending the tmo do not proceed with ledbetter
00:23:00 ledbetter uh and your emails we can see forwards uh an email from laura johnson of the art of rbkc uh it's a little bit below that but but
00:23:11 uh it's a little bit below that but but do you remember that perhaps we should look at it um
00:23:17 uh if you go to art 50637
00:23:25 this is the email from rbkc
00:23:30 do you see that and it's dated the 3rd of january 2013 and that's what you four did to the artelia team yes yes and it's addressed to cliff thomas at
00:23:41 and it's addressed to cliff thomas at lead bitter from laura johnson and if you look at the third paragraph it says
00:23:48 it says uh there was originally a total of around 60 million pounds available
00:23:55 available for the calc project and grenfell tower rbkc will now no longer be recommending the tma proceeding with you on the latter
00:24:02 latter and will advise them to re-tender the works to a list of contractors not including ledbitter now just pausing there is it right that in january 2013 you knew that rbkc did not want
00:24:14 you knew that rbkc did not want ledbetter on the grenfell project at all that was the uh implications from laura yes yes do you know why rbkc did not want ledbetter on the
00:24:26 rbkc did not want ledbetter on the grenfell tower project at this time because they'd had a lot of protracted negotiations in trying to get financial close on the calc project and saw that uh in terms of ledbit and
00:24:38 and saw that uh in terms of ledbit and not
00:24:39 not providing the information that had been requested in relation to the um cost estimates that they could see something similar happening again on the grenfell tower project
00:24:49 project right when you saw that email did you did you take any action i can't remember if i did what struck you from that email i mean
00:25:00 what struck you from that email i mean what was your reaction to it that um that the rbkc had lost patience with
00:25:07 with ledbetter and uh but didn't want to go through the same hoops again with the grenfell tower project right given what rbkc had said in clear and firm terms that they no longer
00:25:21 clear and firm terms that they no longer want
00:25:22 want ledbitter on the grenfell tower project why did you and the tmo want still to see if you could negotiate lead better down to a lower price
00:25:33 down to a lower price i can't remember why we did that i can't remember in terms of the context of this particular email between laura and cliff what um bearing that had in terms of instructions to the tmo
00:25:45 instructions to the tmo right in taking ledbetter forward
00:25:49 how well known to to the best of your knowledge and understanding looking back on it how well known was rbkc's view about ledbetter within the tmo itself
00:26:02 about ledbetter within the tmo itself i'm not sure right did you ever have any discussion at this time at this time with anyone at the tmo about rbkc's desire not to use lead bitter on the grenfell tower
00:26:14 lead bitter on the grenfell tower project i can't remember i don't believe so
00:26:16 so right
00:26:20 you see artela doesn't seem to have done anything in response to that email but does rin does investigate reprocurement in the february and march of 2013 and into the april as we've seen
00:26:32 of 2013 and into the april as we've seen we've already shown you that my my question really is given why our bkc given the fact that rbkc had said they don't want lead ledbetter on the grenfell tower project
00:26:43 grenfell tower project why did you continue to um see if you could get ledbitter down by way of examining their costs our bkc weren't our client in particular in reference to the grenfell tower project
00:26:53 project so did you ignore what laura johnson was saying on the basis that since she wasn't your client it wasn't up to them our client the tmo wanted us to carry on discussions with ledbitter i follow
00:27:10 what we get i think from the documents in that at that time the first quarter of 2013 is that artelia was trying to bridge the gap between its own cost analysis and that of lead bitters but at the same time
00:27:22 of lead bitters but at the same time and perhaps separately tmo is investigating reprocurement is that a fair summary of what was happening in those months yes when you say bridge the gap what we were trying to do is understand why the
00:27:33 were trying to do is understand why the gap not necessarily bridgette i understand that my choice of my poor choice of words understand the gap yes um but other than that
00:27:43 that correction is that a fair summary yes the events of that time correct okay can we then turn to what then happened in the spring of 2013 leading to the decision to put the
00:27:55 leading to the decision to put the project on hold later that year and we start i think with art409101
00:28:06 now this is a status report produced by artelia in april 2013 did you have any involvement in the production of this document not in the production only in
00:28:17 production only in um the overview of it once it had been produced so did you approve it once it had been produced i i'd say yes in terms of the loosest sense i didn't
00:28:28 in terms of the loosest sense i didn't say that it yes i approve it but um i i reviewed it and i didn't have any comment on it very well
00:28:34 well okay i mean before it went out you were happy with it were you correct right did you do you know who actually wrote it robert powell robert powell did you have any help or did you do it himself i believe he did it himself okay now if
00:28:46 i believe he did it himself okay now if we go to page five we find an executive summary uh and we can see from the second paragraph in that
00:28:54 that um that the report had been generated because the project has been extremely slow
00:28:59 slow um and it says that the scheme was outside the parameters for time and cost i'm summarizing it but that's a that's a fair summary of the background isn't it yes yeah and in the middle of page five
00:29:12 yes yeah and in the middle of page five uh we can see a seven bullet point list summary of the contributory factors to the present situation in summary it says the contributory factors to the present situation are
00:29:23 present situation are and i'll read them out to you client brief has been allowed to develop in a piecemeal fashion over time absence of a controlled and managed scope for the project late commitment to a defined
00:29:34 late commitment to a defined construction budget historic relationships and contractual position regarding the associated calc project may have frustrated good and proactive progress absence of earlier intervention absence
00:29:45 absence of earlier intervention absence of proper change control applied to the design brief and slow reaction of the proposed contractor to address and align cost plans do you agree that that
00:29:55 that list accurately summarized the state of the project as at april 2013 yes i do can we look at the bottom of page eight then and over to page nine
00:30:07 then and over to page nine we could see some further factors there which uh some of which repeat previous points about what led the project to to stall um it it says at the bottom of
00:30:21 to stall um it it says at the bottom of page eight however at today's date the project has effectively stalled primarily due to the inability to align the cost plans of the contractor and the pqs
00:30:29 pqs the difference being in excess of 1.2 million pounds further there is circumstantial evidence to suggest the following that the scope of the project developed over time without clear guidance on budget from the client
00:30:41 budget from the client early cost plans indicated affordability of the project and scope creep due to the absence of clarity of a budget and design team inclusions of clients requests for scope enhancement and perceived requirements from local
00:30:52 and perceived requirements from local authority planners in addition to the foregoing there have been several changes of personnel involved with the project
00:30:57 project in each of the client professional and contractor teams which may have contributed to the issues being faced by the project at today's date do you agree that those three bullet points were also contributing factors yes i do right now
00:31:10 contributing factors yes i do right now let's look at page nine a little lower down the second um uh paragraph i've just read to you which says in addition to the foregoing several changes of personnel there can
00:31:21 several changes of personnel there can you
00:31:21 you just enlighten us as to what that meant what was being referred to there uh that um there were different there were changes along the route by
00:31:32 were changes along the route by we had had changes in terms of our own personnel because of people leaving the business and having to bring bring in new people uh that the tmo mark anderson when he started was only in an interim role and his role was then
00:31:45 in an interim role and his role was then passed down to paul dunkerton and that i'm not sure if by this time claire williams was already on board
00:31:54 on board and that there were changes in personnel as well in terms of the lead bitter team in terms of who was dealing with aspects of the project as well yes i see um who are the people leaving the business from artelia's end
00:32:06 business from artelia's end uh it would have been alan dawson oh okay where did he leave sorry when yeah just i can't remember it's a statement i statement i can't remember the exact dates but it's obviously covered within his statement right um we know that claire williams
00:32:18 right um we know that claire williams wasn't in fact involved in this project until the september of 2013. but we also know peter madison joined it in the january of that year is that one of the other fee one of the features or factors that's referred to
00:32:30 features or factors that's referred to here
00:32:30 here yes and again uh another person who was introduced to the project and again i can't remember the exact dates was david gibson as well i follow so flux within the client team
00:32:41 i follow so flux within the client team in a nutshell yes yeah now um i i just put to you that peter madison became involved with this project in the jan
00:32:49 jan in the january of 2013. do you remember that
00:32:53 that i it's a matter of correct do you remember it i can't remember specifically but yes i know that he became
00:32:58 became he became involved yes right did you notice any particular change in attitude from tmo once he became involved not uh that i can remember right
00:33:12 um you there's also a reference to changes in each of the professional and contractor teams what was that a reference to do you know i believe that it would have been a reference to i suppose like ourselves a change in personnel who were
00:33:23 ourselves a change in personnel who were people who had left the business uh and had been replaced or people who had been moved between projects right who specifically can you give us anything you can't remember names dates no right um then let's look at page 18.
00:33:42 at the bottom of this page you'll see a numbered list and this is a list of of what it says whilst this exercise is underway apple yards would suggest this is not a viable option
00:33:56 for the following reasons and this is a retender
00:34:00 retender essentially one and i'll show you the list one pqs project costs maintain that the overall cost of the scheme is in excess of the budget which would indicate
00:34:11 indicate a more fundamental action is required rather than to just change the contractor two usurping ledbitter at this stage throws up legal questions about the tma's ability to do this apple yards are unable to comment on the
00:34:23 apple yards are unable to comment on the legalities of this and recommend separate legal advice is sought if this would remain an option three replacing the principal contractor at this stage will incur additional time at expense without the guarantee that the tma would
00:34:34 without the guarantee that the tma would be any better served by the replacement and four ledbet has knowledge of the overall scheme the client and the project team is lost and over the page to nine it says accordingly and given the recommendations elsewhere in this report
00:34:46 recommendations elsewhere in this report if we just flip to page nine
00:34:50 top of page nine nineteen i'm so sorry
00:34:56 accordingly and given the recommendations elsewhere in this report applejacks recommend retaining lead bitters as preferred contractor for the scheme
00:35:03 scheme in whatever form it is finalized now pqs there is that a reference to project quantity surveyor yes that's mislim isn't it correct under your supervision
00:35:14 your supervision yes and now before i ask you further about this can i also show you page 25 of the same document
00:35:25 here we see artelia's conclusions and recommendations and in the second paragraph down it says to revise the scope of the
00:35:37 it says to revise the scope of the project
00:35:42 uh i'm so sorry i'm looking at the wrong paragraph i'm going to come back to that one
00:35:48 one very shortly before i do um it's a little higher up the page second is the second main paragraph under conclusions and recommendations i'll come to that list later but it says the project is currently
00:35:59 but it says the project is currently over budget with little expectation that if left to iterative reviews with the contractor giving diminishing returns that costs will be aligned or reduced sufficiently to make the scheme affordable
00:36:10 to make the scheme affordable and in the next paragraph it says the tmo is advised that it desire it has desires
00:36:14 desires to change the overall scheme to accommodate a change in brief and the proposed ve options value engineering options to afford these proposed changes may be consumed simply to bring the existing
00:36:25 consumed simply to bring the existing scheme
00:36:25 scheme within the realms of affordability and then if we look at the third paragraph from the bottom uh on page 25 it goes on to say accordingly it is apple yard's opinion that unless the project in its current
00:36:37 that unless the project in its current guys is stopped in a fundamental review embarked upon to redefine the scope program and cost it will fail so bearing in mind those sections of the report i have read to you
00:36:48 report i have read to you is it fair to summarize artelia's recommendations as being don't replace ledbitter as the main contractor one yes yes and and secondly do have a fundamental
00:36:59 and and secondly do have a fundamental review of the scope of the project to redefine the scope programming cost correct yes and and if you look at the recommendations at the bottom of page 25
00:37:10 recommendations at the bottom of page 25 now
00:37:11 now it says according to our recommendation to stop the scheme and it's an existing guys immediately pending a design team review two to revise the scope of the project including the decent homes requirements within the 8.5
00:37:22 within the 8.5 million budget in mind and issue formally three revise the project program and there are other things too so that summer that those are artelia's recommendations
00:37:34 recommendations in essence is this right mr cash the real problem here was that the tmo simply couldn't afford the project as designed within the existing budget correct we then move on
00:37:46 correct we then move on in time because that's the status report in in well let me suggest to you extremely clear terms in april 2013. yes yes
00:37:58 in april 2013. yes yes i mean i suppose this is an unsally question but were you in any doubt when you saw this document about what it was that artely was telling your client no doubt at all no then let's go to art
00:38:12 no doubt at all no then let's go to art 406252 please this is an email of the 21st of may 2013 a month later from robert powell to philip booth about a meeting with the tmo and you're copied in
00:38:24 tmo and you're copied in and it says philip interesting meeting this am basically peter madison has been overruled by laura johnson she wants to keep the works of the boxing club and nursery and doesn't want to progress the kitchens and bathrooms at
00:38:36 progress the kitchens and bathrooms at this stage necessarily also pm peter madison not keen on progressing with leadbitter our report kicking this all off was based upon the objective of preserving the program this now not so important
00:38:48 the program this now not so important value for money is accordingly we are likely to reprocure scheme via ojeu
00:38:57 now just looking at that laura is laura johnson is it correct presumably and then um it goes on now it looks as if you attended this meeting is this
00:39:08 if you attended this meeting is this is that right yes that's correct you were uh right when um robert powell used the words overruled peter madison has been
00:39:19 overruled peter madison has been overruled by laura johnson what did you understand he meant that laura i believe that peter madison reported to laura
00:39:28 laura as head of social housing within rbkc and that she had effectively told him that
00:39:36 that what she wanted uh would i would basically
00:39:39 basically take precedence over what peter madison was trying to achieve and as i suppose the major funder for the project uh contributor of funds to the project that um he obviously had to take cognizance
00:39:50 um he obviously had to take cognizance of what she was saying right right so as you understood it it sounds from what you've just told us that rbkc had some sort of decisive influence about whether or not this contract would be rep
00:40:01 contract would be rep reprocured is is that right it appears so yes
00:40:04 so yes it appears so but did it appear so to you at the time yes really um
00:40:11 really um did you ask yourself or ask the tmo how that could be no because at the end of the day um that's a relationship above our client were you aware that as
00:40:22 above our client were you aware that as rob powell says here peter madison was not
00:40:23 not keen on progressing with leadbitter i was aware of that yes from the meeting what gave you that impression do you remember he had told us that at the meeting do you know why he wasn't keen on progressing
00:40:34 know why he wasn't keen on progressing with ledbetter i i don't know other than he said that he wasn't keen to progress with ledbitter i think whether that was because he was being influenced by or being overruled or whether that was his own opinion i don't
00:40:45 whether that was his own opinion i don't know you don't know you didn't explore that with him no okay um again looking at the words of the email we can see that the objective was value for money can you explain what
00:40:56 was value for money can you explain what you understood was meant by the preserving program not being so important and value for money is or was in a construction project there are
00:41:05 there are three particular criteria which you identify in terms of priorities so that's time cost and quality and that when we set out on this particular project time was of the essence in terms of
00:41:17 time was of the essence in terms of trying to get the project done as quickly as possible and trying to complete it in line with the calp project and then this meeting effectively reappraised that in terms of priorities and put
00:41:27 and put value for money as the key priority of a program and ensuring that the project was delivered within the approved budget right you didn't mention quality in the
00:41:38 right you didn't mention quality in the in your description after having referred to it did you have any impression that given that uh the program is not so important value for money is where did quality sit in that hierarchy
00:41:51 where did quality sit in that hierarchy i would
00:41:52 i would [Music]
00:41:54 [Music] say that quality and program were probably of equal equal importance after the value for money
00:42:01 money after the value for money in terms of quality relative to um expensive expense of quality not quality as in
00:42:12 quality not quality as in [Music]
00:42:14 [Music] deleterious quality i follow um i think i follow i think are you saying there's a difference when you look at quality um between how much you spend on
00:42:26 um between how much you spend on something of equivalent safety on the one hand and saving money by using cheaper products which are less safe on the other i'm not saying that no
00:42:36 the quality is in reference to the cost of maybe different types of materials but they all have to be compliant in terms of whatever regulatory compliance they must conform to yes i follow now let's move
00:42:48 conform to yes i follow now let's move um forward in time art 406232 please this is an addendum to the status report
00:43:01 this is an addendum to the status report uh dated may 2013 and we can see from elsewhere in the document i didn't i think showed to you that it was issued on the 24th of may it's on page three in fact we don't need
00:43:12 it's on page three in fact we don't need to turn it up by rob powell it was distributed to peter madison did you see this addendum before it went out i believe i did yes can we look at page five uh
00:43:26 can we look at page five uh under the heading addendum it's clearly what it is it's clear what it is and if we look at um
00:43:33 um the first bullet point
00:43:36 uh it sits underneath a paragraph that says uh in the intervening period and following a meeting the tmo held with laura johnson of the royal borough of kensington and chelsea in the week commencing the 13th of may
00:43:47 commencing the 13th of may the tma have clarified their position relating to a number of contributory factors to the scheme value for money is to be regarded as the key driver for the project uh and there are other things as well
00:43:59 uh and there are other things as well there
00:44:01 there um and then if you go to page six
00:44:05 you can look at you can see the first and second paragraphs on page six uh at a meeting between the tmo and apple yards on the 21st of may
00:44:16 apple yards on the 21st of may 2013 it was confirmed by the tma that the question of program should be considered subordinate to value for money on the project and then you say or it is it says in light of the
00:44:28 or it is it says in light of the foregoing our original recommendation to review options to replace the contractor as this will add further risk costs and time to the project must now be reconsidered indications are that value for money may be enhanced
00:44:40 value for money may be enhanced by reprocuring the construction element as opposed to proceeding with the existing contractor arrangement perpetuated from the associated kensington academy and leisure center project
00:44:53 now
00:44:57 we saw that the original recommendation in the status report was based on artelia's opinion that replacing the contractor would not create the cost savings
00:45:08 create the cost savings which had been sought we saw that in the in the first edition of this report before this addendum can you explain why it's being said here in this addendum report the value for money may be enhanced by reprocuring
00:45:20 money may be enhanced by reprocuring the construction element because uh it would push it back into a competitive market it wasn't actually saying that it would actually bring the project back into budget which was a different matter
00:45:30 entirely i i i think i followed that the original recommendation was based on your view that replacing the contractor wouldn't create the cost savings that
00:45:41 wouldn't create the cost savings that had been sought but now now it's being said um that a reprocurement um uh effectively would no what it was saying there were two different distinct parts here one is to
00:45:53 different distinct parts here one is to is that the brief and the scope of works were exceeding the budget available so that was the unaffordability and then in addition to that the price that was being put forward by lead
00:46:04 that was being put forward by lead bitters was even higher than our expectations were in terms of our budget estimate and that we felt that
00:46:09 that in terms of changing now to a program driven uh sorry from a program driven to a value for money driven uh perspective that um the price that was being offered by lead
00:46:20 the price that was being offered by lead bitters could could actually be achieved we could achieve a better value for money against that uh in terms of being going through a competitive tender process but it didn't necessarily mean that it would still be affordable within
00:46:31 that it would still be affordable within the tmos budget well what would a new contractor do by way of providing value for money that led butter wouldn't or couldn't do because ledbetters were in a negotiation position they felt that they presumably
00:46:43 position they felt that they presumably had this project in the bag because they were
00:46:45 were already on the calc project and one of the things that we couldn't get to the bottom of in being able to interrogate the detail of their price was for example to what level that they had allowed for allowed for
00:46:56 allowed for allowed for risk or contingencies within the project which
00:47:00 which a competitive tender may actually take a view on and take commercial views on rather than trying to load a price with everything that they could think might actually occur on a project and
00:47:12 actually occur on a project and therefore hedge their bets so to speak um but nothing had changed fundamentally about the circumstances of the project had it
00:47:20 had it correct so it was too big for the budget and the design wasn't controlled all those
00:47:25 those factors that you'd spelt out in your april
00:47:28 april um status report remained the position didn't they correct and we weren't changing our views on that particular element
00:47:33 element well we'll see because given that those things hadn't changed um why was reprocurement suddenly a good idea
00:47:44 idea because it was a means of trying to procure a better value price rather than going through a negotiated process it's a known fact in the industry that negotiated prices are generally higher because people
00:47:56 are generally higher because people don't feel that they're in competition and therefore able to put in the levels of profit that they require and therefore and also load prices with all the levels of costs of risks
00:48:07 of risks that they may encounter rather than taking some of those risks on board themselves yes but i thought you'd accepted that replacing the contractor not negotiating but replacing ledbetter wouldn't uh
00:48:19 but replacing ledbetter wouldn't uh create the cost savings so that was the effect of the uh report in april correct that was replaced so replacing ledbetter wouldn't get the that was the one of the root causes was
00:48:31 that was the one of the root causes was that the expectations of the tmo were greater than that the affordability of what they had available in their pocket
00:48:37 pocket yes but then also we had an issue in terms of trying to negotiate with a contractor who was also trying to push the figures up even higher than our expectation was so we had one one issue was trying to
00:48:48 one issue was trying to curb the tmos expectations in terms of their scope of what they wanted to achieve in the project and the other one was trying to achieve
00:48:57 achieve and procure a contractor and secure a contract
00:49:01 contract at a value that was also [Music]
00:49:05 [Music] at a good level and if the scope had been brought down to the level that was affordable within the budget then a competitive procurement was more likely to also procure a contractor at that level
00:49:16 contractor at that level as well i i see so you're saying that the advice not to replace ledbetter as the main contractor meant that the obverse was keeping led better as a main contractor and that
00:49:27 better as a main contractor and that would mean he was stuck in a negotiation which would not have not not produced the savings that were required correct but it didn't mean to say that we wouldn't have to go through a process of
00:49:36 of value engineering to still achieve a scope of service and a brief the client brief that met the budget that they had available to them now let's just move on with this document page six please
00:49:47 document page six please uh which we're on if you go down to the fourth paragraph you say um there remain two options for reprocuring a contractor for the scheme utilize an appropriate framework to select a contractor
00:49:59 select a contractor and submit a full oj eu compliant procurement exercise and then you go on to spell out the different advantages of of each at this point the cost difference i think between artelia and
00:50:10 difference i think between artelia and ledbitter had narrowed quite considerably hadn't it i believe it had yeah yes i think you were only about by my calculation 684 000 pounds apart yep does that sound about right
00:50:21 about right something like that yes right um and i think in fact we could probably see those in
00:50:27 those in in in in some documents i'm not sure it's necessary to go to that but do you remember that the difference between tmo and ledbetter at this point was less than the amount of the contingency i can't remember that specifically no
00:50:40 i can't remember that specifically no well let me give you some figures and we can look at documents if you need to but in the status report of the 23rd of april we've looked at the tmo's costs were 9.364 million which included a contingency of
00:50:53 which included a contingency of hundred 760 sixty-five thousand pounds does those figures sound right to you it was a project cost there's a project cost
00:51:00 cost all right i think i i can't remember if it was if that was project let's be clear art four zero is nine 9101 please at page 14 let's just go to those i wasn't going to take you to them but we can
00:51:22 take you to them but we can and if you go to page 14 you can see what the current position is and there's a revised um estimated construction cost by by you as as 9.364 million
00:51:34 by you as as 9.364 million including seven hundred and sixty-five thousand pounds is a client's contingency that's that's why i put it to you as it was a contingency yes so those are the figures there and i think
00:51:45 those are the figures there and i think lead bitters figures were six hundred and eighty four thousand pounds more than that because as you can see at the bottom of that very page 18th of april 2013 ledbetter's sixth submission is 10.048 million so you're six
00:51:58 is 10.048 million so you're six say four apart which is less than the 765 contingency isn't it yes yes so so um they have were progressive attempts to
00:52:09 they have were progressive attempts to align the costs but there was still a gap but the gap was only 684 000 at that stage yes um now given the program was no longer a factor
00:52:20 longer a factor why was the tmo unwilling to wait for ledbit and artelia to reduce that discrepancy that 684 thousand pound gap further given how close they were
00:52:31 gap further given how close they were because the contingency is is a contingency held by the client so the real difference was in the 9.364 less 765 contingency
00:52:42 in the 9.364 less 765 contingency yes it's a 765 to the hundred thousand pounds you're over a million pounds worth of difference yes but um are you saying that the 10.848 million therefore didn't include
00:52:54 10.848 million therefore didn't include the contingency i don't know what was in ledbetter's figures because we couldn't get the breakdown either way i'm confident one can argue about the figures i've put you 684 which includes the contingency which
00:53:05 684 which includes the contingency which is indeed a client retention my question again given that the program wasn't a material factor anymore um was there not a prospect at least that the the gap
00:53:17 that the the gap between the client and ledbitter so close as to be bridgeable at this stage no because the contingency is a contingency held by the client and that could be for all eventualities
00:53:28 could be for all eventualities from uh from that point of the estimate through to the end of the project it could uh it might have to cover things like discovery later on in the project right and therefore that contingency is held by the client and is
00:53:39 contingency is held by the client and is only released as and when there is a need to so therefore you need to look at the net cost not the gross cost i understand that so
00:53:46 that so cutting to the chase here on was it your view at the time that this this gap whether it was 684 000 or or just about double that if you take the contingency into account
00:53:58 the contingency into account was an unbridgeable gap at that point at a point of time yes
00:54:08 right and we i don't need to show you i think the the um
00:54:15 the um richard cloak of of ledbetter who was the man
00:54:18 the man who was committed to touch his manager it was of the view that unless the scope was altered or additional budget was made available ledbit his own view was that the scheme as proposed couldn't be delivered in
00:54:30 as proposed couldn't be delivered in in line with the client's advised budget that sounds as if it was similar to your view at the time yes yes at least in accordance with the status
00:54:41 at least in accordance with the status report of april correct right now staying with um
00:54:49 yeah if we can go back to the status report of the 23rd of april 2013
00:54:57 uh art four zero is nine one zero one we're on that um if you go to the bottom of page 18. you said there
00:55:12 in the third bullet point and i read this to you replacing the principal contractor at this stage will incur additional time and expense without the guarantee that the tmo would
00:55:24 without the guarantee that the tmo would be any better served by the replacement it looks from the addendum that artelia's advice had now changed is that right
00:55:35 changed is that right but by the time we get to may and the addendum yes yes was it was it artelia's view that the scheme was still unaffordable given the tma's budget
00:55:46 the tma's budget correct was arterial of the view that the scope of the project still needed to be redefined yes can you explain why artelia changed its advice
00:55:57 its advice because the change in emphasis from program to value for money in terms of the the drivers the key drivers from the tmo
00:56:08 drivers from the tmo can we then look at art 406418 please
00:56:15 this is an email to you from robert powell
00:56:19 powell of the 22nd of may 2013 in which uh he uh um to which he attaches his addend his draft addendum to the april report we've
00:56:31 draft addendum to the april report we've seen the addendum and in his second paragraph he says fundamentally this is a bit of political lubrication to give the tmo justification to go against the recommendation in our original report which suggested
00:56:43 in our original report which suggested they keep ledbitter involved with the project
00:56:46 project what did you understand by the term political lubrication mr cash i'm not sure what it was um trying to imply other than that having changed the priorities within in
00:56:58 having changed the priorities within in the drivers that the tmo were looking to apply to the project that we needed to review what we'd said in the first report
00:57:08 report and therefore the state and the status report was going to be presented to the tmo board for approval
00:57:22 does it do we take from this that although you didn't think well artelia didn't think that this was the right advice to go out to a fresh retender nonetheless you were prepared to give it to help the tmo out politically
00:57:33 to help the tmo out politically no this is uh the addendum had been prepared because there had been a change in drivers and therefore we had reviewed that in terms of what we said originally what was the nature of the political problem
00:57:44 problem as you understand it don't know about any political problems might it have been and this is perhaps not a question for you but for others but the tmo needed a piece of paper to allow them to do what laura johnson had
00:57:55 allow them to do what laura johnson had demanded i don't know you don't know
00:57:59 or did the tma want different advice but so that it could pursue its own agenda of value engineering i don't know did you understand that the tmo had actually asked artelia to produce an addendum
00:58:11 asked artelia to produce an addendum report which in which the advice was changed i can't remember if it did or not i knew that an addendum would be required because of the change in circumstances right you don't know who prompted the uh prompted the
00:58:22 prompted the the production of that identity i can't remember but it may have been something that was discussed at the original meeting that we had where the changes were originally discussed right in terms of the drivers
00:58:34 in terms of the drivers were you giving advice just to suit the tma's purposes here no right
00:58:42 if i can show you art three zeroes sorry four zeros eight nine eight four page twenty nine this is mr powell's witness statement
00:58:53 i'll get your comment on it see if you agree with what he says paragraph 89 he refers to the addendum and he says in the third line in fact i'll read it all to
00:59:05 third line in fact i'll read it all to you the addendum is a reflection of the changed parameters for the project the tmo clearly hoped that the revised approach would provide better value for money with the program being less important the tma had been prompted by rbkc to
00:59:17 the tma had been prompted by rbkc to change its focus to a different order of priorities having previously accepted the advice we had given it if all the tmo had was a status report from auk advising on a different course of action to the one adopted based on
00:59:29 of action to the one adopted based on based upon an earlier order of priorities which had been superseded that would leave the tma without the full story on paper as the order of priorities had changed we needed to reflect that do you agree with that that's the first statement yes right
00:59:43 can we then move on to uh a rt409020 this is an email chain between artillery and the tmo
00:59:55 it i'll just wait for it to come up in know in
00:59:59 know in may 2013
01:00:02 may 2013 and if i go to page two we can see that you were
01:00:06 you were um copied in on this email chain
01:00:12 if we look at page two in the middle of the page we can see an email that mr powell
01:00:17 powell sent excuse me sent to peter madison attaching the addendum report and you're copied in on that yes peter please find attach the addendum to our report we discussed this should now give
01:00:28 report we discussed this should now give you the comfort you're looking for to proceed with looking to reprocure the construction against our earlier recommendation which was based on now obsolete information if we scroll up to page one we can see a further email to david gibson 20 minutes
01:00:40 further email to david gibson 20 minutes later
01:00:44 you see that uh where robert powell essentially sends him the email he'd sent
01:00:51 sent below to peter madison also copying you in david apologies i left you off my earlier correspondence to peter attached as a copy of our addendum to our report um and then um at the top
01:01:05 um and then um at the top of the page peter david gibson uh writes to
01:01:08 to robert powell uh four days later 28th of may
01:01:15 thanking him and saying in the second paragraph the recommendations within the addendum are in line with our discussions of last week and allow us allows us to progress towards reprocuring the construction
01:01:26 reprocuring the construction do you know what discussions mr gibson is referring to there no were you involved in any of those discussions do you think i don't believe so right
01:01:37 i don't believe so right do you accept that in this email it looks as if the tmo had discussed with artelia what recommendations um they wanted artelia to make no i don't think that's i wouldn't agree with
01:01:48 don't think that's i wouldn't agree with that i would say that they had a conversation about what the recommendations were i don't know it doesn't seem to imply that that uh right the tmo were actually telling us what to write no i'm not suggesting that quite i'm
01:01:59 no i'm not suggesting that quite i'm just asking you what your understanding of this email was
01:02:04 was there'd been a conversation about the changes required as a result of the changes in the drivers on the project and that an addendum would have to be written because it would have to reflect
01:02:15 written because it would have to reflect the changes in the intact in terms of recommendations yeah i mean i mean on the face of this email it looks and i just want you to comment on it looks as if there were discussions first and then the addendum was drafted to be
01:02:27 and then the addendum was drafted to be in line with those yes yes so this wasn't discussions about the addendum this is an addendum to reflect the discussions is that fair yes but i don't know what whether the the discussions were about
01:02:39 whether the the discussions were about what might be in the attendant just to give the tmo an advance indication of what was going to be included
01:02:49 and do you know what the information was that mr powell had said has become obsolete which he'd referred to in his earlier email in terms of the
01:03:00 earlier email in terms of the recommendations to continue with negotiations with lead bitter uh on the basis that uh time was of the key driver rather than in value for money right that wasn't really information becoming obsolete that was
01:03:12 information becoming obsolete that was an instruction changing isn't it really the right way
01:03:20 can we then go to art409106 we move we move now into the early part of june 2013 and these are the minutes of a tma meeting on the 6th of june
01:03:32 of a tma meeting on the 6th of june and we can see that you attended this meeting as did peter madison yes you see that and again the notes apple yard's notes quality author booth checked robert powell
01:03:43 powell and if we go to um the first item attachments project number one project brief and the first item is the approval of
01:03:56 and the first item is the approval of the revised project brief and we saw that earlier and then underneath that item two contractual procurement 2-1 pm peter madison requested applegate
01:04:08 2-1 pm peter madison requested applegate to review the previous addendum report to include greater detail on programming costs
01:04:13 costs to demonstrate that tendering the contract will deliver greater value for money
01:04:16 money the main project driver by that did you and you were present as we know did you understand that the tmo had asked for a further revision of the addendum report in other words that
01:04:28 addendum report in other words that addendum draft we saw a little bit earlier
01:04:32 earlier the one from may that we've just been looking at yes that he wanted it in more detail right do you remember what was discussed at this meeting in relation to reviewing that draft of the addendum report the
01:04:44 that draft of the addendum report the mayor denton report i can't remember the detail no right um when it says that there was to be greater detail
01:04:55 that there was to be greater detail on program and costs quotes to demonstrate that tendering the contract will deliver greater value for money the main project driver do you remember that this was the tmo
01:05:07 do you remember that this was the tmo telling
01:05:07 telling you what your advice should be in a revised addendum no giving instructions about the subject matter and purpose of the the amendments to that addendum
01:05:19 of the the amendments to that addendum i don't believe so i think he was effectively looking for more detail and felt that what we'd said in the report wasn't sufficiently detailed what was wrong with your addendum as it may that you had approved and sent i can't remember did you think there was
01:05:32 i can't remember did you think there was something wrong with it something incomplete about it something insufficient about it i didn't think so at the time i can't remember specifically did you did you disagree with mr madison and say well look you've got enough in that
01:05:43 got enough in that i don't remember saying anything to the country though right did it come as a surprise to you that peter madison had asked you to do to give greater detail on programming costs for the purposes of demonstrating that
01:05:54 for the purposes of demonstrating that the contract will deliver greater value for money
01:05:56 for money i can't remember right is it fair to say looking back on it that the may version of the addendum didn't quite give peter madison enough of the political lubrication that he was after
01:06:07 after i don't know but you must have had an impression at the time you were at the meeting
01:06:11 meeting i wouldn't know in terms of i didn't think of it in terms of political lubrication i think i thought of it in more as a report to uh to give a status at a particular
01:06:22 to uh to give a status at a particular point in time i wasn't thinking of it in terms of
01:06:24 terms of um any other use other than uh giving a recommendation for taking the project forward
01:06:30 forward no i mean just looking at it from a little distance you produced a detailed status report in april you'd had a change of instructions you would put it in later on and produced a an addendum in
01:06:42 later on and produced a an addendum in may
01:06:43 may responding to the new situation my question really is why why did it not occur to you at the time that that was enough and ask yourself why it was that peter madison wanted further detail we quite often write reports and we
01:06:55 we quite often write reports and we think they're in sufficient detail and clients come back to us and saying that they require further detail to allow them to explain or to pass on to others
01:07:04 to others yeah i see all right well let's see how this let's see how this pans out we go to art406181 please now this is a
01:07:15 please now this is a a revision to the original status report of april 2013 as you can see from the front page updated 18th of june
01:07:26 2013. and and oddly it says next to the words in brackets 22nd of april 2013. and just while we're on it have you can you explain why the original april
01:07:37 can you explain why the original april status report bore the date of the 23rd of april
01:07:40 of april but this one says 22nd of april updated 18th june
01:07:44 18th june i can only assume that the 22nd and 23rd there was an error i see now there's not two different versions are there no well it says it's an updated report
01:07:55 no well it says it's an updated report right let's look at page 27 of this document
01:07:59 document this is the up the june update of the april status report and there we can see that there's an addendum which is now added to this document so
01:08:11 which is now added to this document so that so
01:08:12 that so it's been implanted into the status report by way of a june update have i got that right yes um looking at this addendum does this look
01:08:23 looking at this addendum does this look familiar to you yes did you write this do you think no i didn't did you approve it at the time
01:08:31 time i i would have reviewed it right as part of your review of the update yeah yes and if we look at page 27 at the top it says there that the tmo have clarified their position um
01:08:43 have clarified their position um uh and you can see it says there uh in the intervening period between the issue and the origin of the original draft of this report and following a meeting the tmo held with laura johnson of the royal borough of kensington chelsea in
01:08:54 royal borough of kensington chelsea in wheat commencing 13th may 2013 the tmo have clarified their position relating to a number of contributing factors to the scheme and that's that's what we saw from the original addendum and then again value for money is to be regarded as the
01:09:05 value for money is to be regarded as the key driver for the project and and then the other bullet points again all identical to the 24th of may first draft of the addendum yes yes
01:09:17 may first draft of the addendum yes yes and then looking below that we can see things that are familiar and then
01:09:24 then um if you go to page 28 of this document from the third paragraph from the bottom
01:09:40 this text is new isn't it given that the amended project brief gives primacy to value for money for the project we recommend that the tma reprocures the principal contractor through an ojeu compliant open market
01:09:51 through an ojeu compliant open market tender
01:09:53 tender that's i think new isn't it i believe so yes that wasn't even in the addendum in may was it i know were you comfortable that that recommendation reflected your own professional opinion
01:10:06 own professional opinion i believe it reflected the opinion of robert powell i'm not sure
01:10:11 i can't say for myself because i wasn't actually the the author of the document you believe it reflected the opinion of robert powell did you have a discussion with robert powell about this paragraph
01:10:22 with robert powell about this paragraph i can't remember were you comfortable with this document going out with that in it
01:10:32 can you explain why it took you or others at artelia between the 6th of june
01:10:36 june and the meeting we saw and the 18th of june to make these changes and add these editions at the end here this was uh i think the reason it went down this route was because we felt that
01:10:47 down this route was because we felt that uh ledbetters shouldn't be excluded from a re-procurement exercise and if you went down a framework route that uh where they weren't on that particular framework having already been
01:10:58 framework having already been had it as part of their original tender under the count project they may be able to raise objections and therefore we felt that nodu compliant tender would still allow ledbetters the
01:11:09 would still allow ledbetters the opportunity to bid on an open market if they so wished and therefore avoiding any risk of them coming back with a um with a formal complaint in terms of
01:11:20 um with a formal complaint in terms of the procurement process can we go to art 401241 please this is an email from you to peter madison on the 19th of june 2013
01:11:31 madison on the 19th of june 2013 and you attach a status report june version five final you see that um peter you say apologies for the delay in issuing this to you but
01:11:42 for the delay in issuing this to you but it has taken longer than i anticipated to update our status report following our discussion last week
01:11:49 i'm aware that you have a board meeting tomorrow and may not have sufficient time to review what i've written but in essence i've taken on board your comments and reworded sections to read in a better light
01:12:02 now you refer there to discussions last week that's the week before the obviously the week of this email do you remember having discussions with peter madison
01:12:11 madison yes i do what was the gist of those discussions can you tell us yes he wasn't happy that uh within the report
01:12:19 report that we were raising criticisms of the tmo
01:12:24 tmo right
01:12:30 so he wanted you to produce a report that
01:12:33 that was less critical of the tmo correct right
01:12:40 now when we compare the documents the april status report with the june update
01:12:48 update we see not only the addition of the addendum
01:12:51 addendum as changed itself as we've seen but also other things as well and i wonder whether we can whether we can look at those let's go and i'm going to do a compare and contrast
01:13:00 contrast can we go first of all to the status report the original april status report page five
01:13:06 page five that's art four zeros nine one zero one page five
01:13:10 page five and there's a bullet point list there
01:13:13 which i've showed you before the seven bullets starting with client brief has been allowed to develop in a piecemeal fashion over time and and and at least the first four of those are critical of the tmo
01:13:24 those are critical of the tmo or aren't they yes yes uh the three first three the first first three
01:13:35 the first first three um but also historic relationships and contractual position regarding the associated calc project may have frustrated good and proactive progress that's also reasonably critical of the tmo it is but i think that was in particular reference
01:13:46 i think that was in particular reference to lead bitters as well all right fair enough but but i take the point
01:13:51 point um but the first three are certainly critical of the tmo and the fourth one includes a criticism of the tmo then if we compare that with the updated version of the june
01:14:02 with the updated version of the june report the update this is art406181 page five
01:14:13 you can you can see now that the there's been a change uh and instead of um saying client brief has been allowed to develop in a piecemeal fashion over time it now says the development of the
01:14:25 it now says the development of the client brief went through a number of iterations over time expanding to reflect the desired objectives
01:14:32 so that's a change that has been made in order to cast the tmo in a better light isn't it
01:14:38 isn't it yes yes and the next next bullet point was um absence of a controlled and managed scope for the project uh and etc and that's all gone and now
01:14:51 uh and etc and that's all gone and now you've got a perceived poor commitment from leadbitter to demonstrate a full commitment to this project the indications are that this project was not properly resourced due to the parallel demand of the kick of calc
01:15:04 that's a new bullet point isn't it it's uh yes it is and that i think reserve in replacement of the fourth bullet point of the previous report yes and the second and third bullet points have gone as well haven't they
01:15:15 points have gone as well haven't they yes yes so you've taken out the critical second and third bullet points and replaced it with a a much less critical fourth bullet point that really just fires at lead better and excludes the
01:15:27 fires at lead better and excludes the tma yes
01:15:28 tma yes again it's to put the tm in a better light to be blunt yes yeah the indications that you refer to there the indications are that this project was not properly resourced what was that a reference to in terms of uh ledbetter's commitment
01:15:40 to in terms of uh ledbetter's commitment to the project we felt that uh their priorities were on the calc project and we didn't think that um
01:15:47 that um that they had
01:15:50 sufficiently resourced project in terms of being able to respond to the questions that we're asking for and also because
01:15:59 because there are a number of meetings that have been arranged with lead bitters where they didn't actually turn up this is a new reason though isn't it and these aren't reasons that were reflected in the original addendum
01:16:10 in the original addendum original report of uh of april were they i think it was it was in referred to in a roundabout way in the fourth bullet point in terms of the existing relationships with the cow product yeah so you beefed up blaming lead bitter
01:16:22 blaming lead bitter and let the tml off the hook on this one in in that sense yeah because the truth is as you've told us that the issue prompting the removal of leaders it was actually a change in
01:16:34 of leaders it was actually a change in the priorities of the client to reflect value for money that was the the change in the attack on the priority and the drivers yes yes and i think you've
01:16:46 the drivers yes yes and i think you've accepted that the criticism of the tma about a late commitment to budget has been removed
01:16:53 now am i right in thinking um that you agreed with these statements when this status report went out i didn't necessarily agree with them personally no why did you let them
01:17:06 personally no why did you let them out then to peter madison if you didn't agree with them peter madison and i had had a particularly strong conversation about the changes that had to be made he was being very persistent
01:17:17 he was being very persistent and put a lot of pressure on us to make those changes uh i was quite resistant because i felt that it was a true reflection of what had happened on the project but at the same time this was a report that
01:17:29 the same time this was a report that peter madison was looking to present to his board and that if we weren't going if we didn't make the changes then the report wouldn't be presented to the board and therefore no decision would be made
01:17:40 and therefore no decision would be made or no no
01:17:41 or no no recommendations would be drawn from that and therefore the the whole basis of the report would have failed completely so you were basically strong armed into making these changes yes this is chairman is that a convenient
01:17:52 this is chairman is that a convenient moment yes i would think it is thank you very much and we'll have another break now mr cash thank you we'll uh come back at 25 to 4 please and usual rules please don't talk
01:18:03 please and usual rules please don't talk to anyone about your evidence or anything to do with it while you're out all right all right we could go to the usher please
01:18:19 25 to 4 please
01:35:44 yes would you ask mr cash to come back in please okay
01:35:56 in please okay [Music]
01:36:00 right mr catch all ready to carry on yes very good let's pour this off some water then we'll start thank you
01:36:09 yes right ready mr cash just um finishing off on the last topic before we move to another one can i ask you to go to tmo10048 no sorry 48490
01:36:23 this is an internal email of the 17th of september 2013 from david gibson to claire williams and i obviously are not copied in on it
01:36:35 i obviously are not copied in on it uh but um it it follows on from or forwards i think to claire williams the email that you had sent to simon
01:36:47 had sent to simon to peter madison uh and copied to david gibson on the 19th of june so this is two months later and what david gibson tells claire williams is this claire
01:36:58 this claire re-vfm through procurement this is all i have seen from apple yards and we had to twist their arms quite hard for them to write it have a quick look at the executive summary and see if it fits the bill
01:37:10 see if it fits the bill as i say you didn't see them to see this exchange at the time but do you agree with
01:37:14 with that characterization of the circumstances in which you amended the status report yes i do yes can i then turn to value engineering as a topic and i want to start by asking you some questions
01:37:26 to start by asking you some questions about value engineering as a matter of principles first in 2013 what was your understanding of what
01:37:33 what value engineering was or meant it's a it's a process which is common to most projects
01:37:39 projects that challenges a design or a concept to ensure that uh what is being proposed is giving the best
01:37:50 is giving the best value in terms of the client's objectives
01:37:54 was it usual to have value engineering on projects like the grenfell tower project
01:37:59 project yes it's common on i think virtually all projects that i've been involved in can we look at your first witness statement please then at paragraph 52 on page 15
01:38:10 at paragraph 52 on page 15 um you say that ve is a well-known term in the construction industry and you say well to some degree views differ as to its precise meaning in my view ve involves achieving the
01:38:21 in my view ve involves achieving the same scope of work required by a client but at better value ve does not involve a change in the scope of work or any reduction in performance or function or a loss of an element of the work
01:38:32 or a loss of an element of the work altogether in terms of better value that value is not necessarily always a reduction in cost although usually it does achieve a cost saving and then you're going to give examples
01:38:45 and then you're going to give examples and you see your emphasis here and i'm summarizing the paragraph tell me if this is unfair but you're emphasizing cost
01:38:51 cost savings without a loss of performance and functionality correct yes and is that important as a qualification in other words you can have cost savings as part of evaluation
01:39:02 as part of evaluation engineering exercise or value engineering exercise but you mustn't have loss of performance or functionality that's the purpose yes yes when you're doing a ve exercise which is
01:39:15 when you're doing a ve exercise which is more important the reduction in the cost or the preservation of performance or functionality the reduction in cost is not the key objective
01:39:24 objective it's about actually trying to maybe achieve the the targets better and that may or may not be
01:39:33 not be where a different material delivers better value how carefully when doing a ve exercise would you examine any potential to compromise performance or functionality
01:39:44 functionality i think that's part of an overall technical review that would be carried out by the team as a whole right
01:39:52 you say an overall technical review carried out by the team as a whole just looking at it broadly on this project who would carry out that exercise in the context of any
01:40:03 exercise in the context of any the adoption of any particular material on the grenfell tower project in terms of the pre-construction phases that would be studio e max fordham and curtin's
01:40:13 curtin's right and and after the after the design and build contractor had been appointed then the expectation would be that ryden as the designer build contractor would identify what the
01:40:24 contractor would identify what the benefits are in terms of making forward uh putting forward any alternative proposals
01:40:29 proposals and the tmo in terms of having taken on board the
01:40:32 board the role of technical review we would also review that themselves as well right now can i ask you to go to page 16 of this document this this witness statement para54
01:40:44 this this witness statement para54 you say like auk studio e was doing its job by raising ve i believe that on almost every construction project i've ever worked on ve has been considered at some stage it is just part and parcel of good
01:40:56 it is just part and parcel of good practice in the construction industry and trying to get the client the best value for its money so is it your experience that value engineering is something that an advisor such as studio he would always raise
01:41:07 such as studio he would always raise with a client at any stage i believe it should be right
01:41:15 and in the paragraph immediately above it you
01:41:18 it you you say in contrast a reduction in scope this is a contrast with value engineering in contrast a reduction in scope
01:41:26 scope involves a change in design that is actually reducing performance or function
01:41:30 function or removing an element of work altogether so you're summarizing it is it your view that after a value engineering process the design should achieve the same level
01:41:41 the design should achieve the same level of safety as before i don't whatever whether it be a reduction in scope or a value engineering there should be no reduction in standards of safety right
01:41:52 standards of safety right so say whether it's ve or reduction escape the design should still achieve the same level of safety yes in terms of regulatory compliance yes
01:42:01 yes in practical terms would you expect that somebody within the team the design team would check or analyze whether each of the design changes which are proposed as part of a value engineering exercise
01:42:13 as part of a value engineering exercise or perhaps product or specification changes um we were compliant with all applicable regulations and uh statutory requirements yes i would
01:42:24 would and on the grenfell tower project i think you've given me the answer before that was
01:42:28 that was is it right studio e up to the point at which ryden were appointed and after that it was ryden so it'd be studio e curtins and max fordham in their capacity in respect of whatever that saving might be or
01:42:39 whatever that saving might be or whatever that value engineering aspect might be
01:42:42 might be until the tender correct and after that max fordham were retained by the tmo yes and so max fordham and the tmo and ryden's
01:42:50 ryden's yes and what sort of check or analysis would you expect those entities to carry out in order to ensure that value engineering had not compromised performance
01:43:01 compromised performance or functionality depending on what the v item might be that they would look at specifications for compliance with statutory requirements british standards uh
01:43:11 uh and such codes of practice and things like that
01:43:15 like that now did you or anybody else at artelia ever investigate whether a check or an analysis had been done as part of the value engineering exercise that we come to see to make sure that compromise there's
01:43:26 to make sure that compromise there's been no compromise to functionality or performance if there were proposals being put forward we would then uh we would look to the design team to carry out those checks yes you would but did anybody at artilla
01:43:37 yes you would but did anybody at artilla ever check that um those checks had been carried out by the design team whoever they were at the time i can't say for sure is there any reason why artelia wouldn't have done its best to make sure that whoever
01:43:48 done its best to make sure that whoever was doing the checks they'd been done properly we would have we should have done and we i hope we would have done okay you should have done it um and hopefully would have done right let's then turn to the valuation
01:43:59 let's then turn to the valuation exercise
01:44:00 exercise the value engineering exercise in 2013. um in general i think you would accept that throughout the early stages of the project
01:44:10 project so from inception in 2012 through 2013 there was substantial change in the design of the project we've seen examples of that yes um and um let's just look at
01:44:24 um let's just look at a couple more if you go to art409057 this is an email chain between bruce sones of studio e and alan dawson in march 2013
01:44:40 and it starts in fact at the end of february of that year if you go to page five please this is an email on page five of the 26th of february 2013 from bruce sayings to alan dawson and he
01:44:54 from bruce sayings to alan dawson and he says it's not really possible to undertake a radical rethink without sight of the figures the discussion with the client and involvement with the services engineer who's not copied into your email uh is the m e not under review as well now of
01:45:06 the m e not under review as well now of course this is at the point at which um there's discussion about about cost because the difficulties with with um led buttons had arisen in terms of bridging the gap
01:45:17 of bridging the gap uh and he sets out some obvious targets as he calls them for savings emit garages baseline undercroft work change zinc cladding material to something cheaper
01:45:28 something cheaper see that yes now those those um changes um are um are quite substantial aren't they yes
01:45:39 um are quite substantial aren't they yes some of them are would be and you can see if you go up the email chain to the bottom of page four
01:45:44 four allen dawson's reply is um in the last paragraph of that reply he says most of your list seems to be emissions or downgrading the spec as opposed to ve
01:45:57 spec as opposed to ve would you agree um that at least some of those proposed changes that he was proposing were actually reducing the scape of the project and not value engineering at all they appear to be yes yes and did you think at that time that there might have
01:46:08 think at that time that there might have to be a reduction in quality in order to meet the tma's budget in possibly in terms of its expectations of
01:46:19 possibly in terms of its expectations of the level of specification in terms of quality right not in terms of its conformity no i understand it was there any area of the
01:46:29 the specification at that stage where you thought quality could be compromised in order to achieve more successful value engineering i hadn't i didn't really think of it at the time but i know that
01:46:40 the time but i know that uh cladding had been a discussion point obviously for some time i follow so from that answer and indeed the email
01:46:50 the email we see as early as february 2013 do we take it that so far as you are concerned
01:46:57 concerned the cladding was always in the frame if i can use an expression for value engineering did the selection of the type of cladding was always in the frame because it had not been finalized there were
01:47:08 finalized there were no number of discussions and although there was
01:47:12 there was the studio we were trying to pursue one particular type of cladding i don't think any clear decision had been made as to whether it might be one particular cladding or another but it was more a case of the fact that
01:47:23 but it was more a case of the fact that the cladding had to have a certain level of performance yeah did did you just looking at what mr sones says about the cladding change zinc cladding material to something
01:47:35 zinc cladding material to something cheaper
01:47:36 cheaper and alan dawson's response where he says most of the list seems to emissions or downgrading the spec as opposed to ve did you think that the change from zinc to something cheaper was a downgrading
01:47:48 to something cheaper was a downgrading of the spec no not necessarily right not necessarily what would make it a downgrading of the spec if the performance ratings were different to those that were expected i
01:48:00 different to those that were expected i thought
01:48:01 thought can we then move to a different topic which is ryden's appointment and i'm going to come back i think later to the question of value engineering once ryden are on
01:48:12 engineering once ryden are on board can we go to artelia's contractual obligations once again and go back to the ea schedule at art405742 at page 48.
01:48:26 now at the bottom of the page there in the left-hand column we can see tick box 1.42
01:48:32 1.42 and this is under the heading 1.4 pre-construction raba outline plan of work 2007. and that tick box is not ticked
01:48:43 and that tick box is not ticked 1.4.2 and it's advise on suitable tenderers for the building contract prepare recommendations for the client's approval
01:48:51 approval by that mr cash do i understand it correctly that artelia's position is that it did not have an obligation to advise the tmo tmo on who to appoint as the main contractor
01:49:02 as the main contractor no this is a generic set of scopes or services and therefore are to be used not only in public procurement but also in private procurement and sometimes when we go in in terms of private procurement
01:49:14 private procurement uh where we don't have to go through a public process then it is up to us to put forward suggested names of contractors that we think might be suitable
01:49:22 suitable for uh long listing or shortlisting to a tender
01:49:26 tender and in this particular instance we were not being
01:49:29 not being because it was a public procurement we wouldn't be going through that process which is why that uh box was not text ticked
01:49:39 so is the short answer to my question that because this was to be a an ojeu compliant tender your advice on suitable tenders wasn't required and therefore the box wasn't ticked correct right
01:49:53 however it's right i think as a matter of fact
01:49:57 of fact in other words what happened on the ground was that artelia as the employer's agent for the tmo so i think phil booth actually
01:50:05 actually and also as qs ms lim in fact were both involved in all of the stages of the oj eu procurement process weren't they
01:50:14 they correct
01:50:15 correct [Applause] now moving forward in time then we know that several bidders returned bids during the oj eu process um can we look at art405886 please
01:50:29 um can we look at art405886 please this is an email chain of the 14th of february 2014 to you mr cash from
01:50:40 and this is about prices
01:50:46 yes and
01:50:50 if we scroll to the bottom of page one and over to page two we can start by looking at her email to you of the 14th of february 2014 bottom of page one and let's look
01:51:03 2014 bottom of page one and let's look at the top of page two she says hi simon just to let you know that the lowest tender is 9.25 million exclamation mark thanks that was from ryden wasn't it the
01:51:16 thanks that was from ryden wasn't it the tender yes yes the tender now um we can see from documents in that in early 2014 mrs lim had actually reanalyzed the budget
01:51:27 lim had actually reanalyzed the budget and she herself had costed the budget at 10.045 million pounds 10 million and 45 000 pounds do you remember that yes and so we don't need
01:51:39 yes and so we don't need to show you a document for that just for our internal purposes and everyone who wants to look at it it's a rt405805 which is artelia's updated final tender report of the 17th
01:51:51 updated final tender report of the 17th of march 2014. you'll find that figure on page 12. that's just to put that into the transcript just say looking at those two figures the 9.25 million from
01:52:02 the 9.25 million from ryden and artelia's own figure of over 10 million um they were coming in at
01:52:09 at just around about a million perhaps just about 900 000 actually less than muslims estimate yes yeah but it was still at 9.249 million
01:52:21 yeah but it was still at 9.249 million um about 750 000 pounds higher than the tmo's own budget of 8.415 million
01:52:28 million correct yes now if we can just look up to page one in this email run
01:52:35 run we can see that um you come back and say or same day um in fact about three minutes later no six minutes later um or even eight
01:52:48 six minutes later um or even eight minutes later good result then what did they miss and who is it
01:52:52 who is it can you just explain what you meant by good result why was it a good result because the uh tender was uh within the project within our pretender estimate uh
01:53:03 project within our pretender estimate uh which
01:53:03 which we that included a level of contingency as well uh so we were satisfied that um that we weren't that we weren't way out in terms of telling
01:53:14 we weren't way out in terms of telling the tmo that the works were over budget
01:53:19 right so a good result because it was very low figure not because it was a low figure but because it was within what we had predicted uh right okay so you say the ten ten odd million that ms limit produced
01:53:31 ten odd million that ms limit produced was a prediction was it yes i mean you were using it as a benchmark figure were you it's it's a it's an indication yes it's not uh it's not a it's not meant to be
01:53:42 be a competitive tender no indeed no you mean your figure wasn't correct no so they had beaten it by about 900 000 pounds and that was the good result yes but bear in mind that miss lim's
01:53:53 yes but bear in mind that miss lim's figure also included an element of contingencies as well in indeed now you go on to say what did they miss was your initial impression that ryden's price was unrealistic
01:54:04 unrealistic no it was a light-hearted quip it may have been a light-hearted quip um but it reveals a deeper truth um perhaps and i just wonder what that
01:54:15 perhaps and i just wonder what that deeper truth is did you think they might have made a mistake no so why did you say what did they miss a as i say it's it was equipped to um i suppose uh ryle mislim
01:54:27 um i suppose uh ryle mislim in terms of uh saying so that maybe they had got something wrong but it wasn't meant in any particular way other than that was the quip perhaps provoked
01:54:36 provoked by by the size of the underbid under the 10 odd million that ms lim had calculated no right did you have any concerns at
01:54:48 no right did you have any concerns at this stage that ryden's bid might mean that uh they were coming in unrealistically low no therefore they would follow that you didn't have any concerns that that price
01:54:59 didn't have any concerns that that price quality and safely were somehow being sacrificed in favor of a low price no
01:55:06 did you have any thoughts at the time that if ryden's tender offer had been accepted
01:55:11 accepted that ryden might later be under financial pressure to produce the project or develop the project on budget no he didn't did the tmo ever ask you at
01:55:24 no he didn't did the tmo ever ask you at any stage about the sustainability of uh ryden's bid at that level uh not that i recall
01:55:30 recall did you or anyone else at artilla consider whether it was an abnormally low tender which might itself be unsustainable no right okay um if we go then to uh
01:55:43 um if we go then to uh art four zeros two nine
01:55:48 look at the first page this is artelia's final tender report um date of the 12th of march 2014. we looked at this i think yesterday and i just want to just show you page 13 in that document
01:56:07 and if you look at that page uh you can see six paragraphs down there is uh a table
01:56:21 there is uh a table uh and and just above that two sentences up it says overall the table on page seven uh reveals broadly consistent pricing at a sustainable level
01:56:33 sustainable level and it may be that that's a reference to a wrong reference to a page number it doesn't matter
01:56:40 given the discrepancies between artelia's own costings and total cost and ryden's in price and indeed between the other bidders and ryden
01:56:50 ryden did artelia really think that the pricings were consistent yes and sustainable yes we did
01:57:00 you see ryden had come in substantially below
01:57:03 below uh the other uh bidders haven't they yes and substantially below artelia's own
01:57:10 own benchmarking and i just wonder why it is given how low ryden was and given your initial quip that ryden must have missed something quick though it may have been you really thought it was a sustainable
01:57:21 you really thought it was a sustainable and consistent price consistent with all the others ms lim had done a review of the tender price that's that they'd sent
01:57:28 sent that they submitted and the analysis that they submitted and felt the prices were not unreasonable right do you accept that the statement that we see
01:57:40 accept that the statement that we see here that there is broadly consistent pricing at a sustainable level might have given the tmo comfort that the the project scope as set by them could be delivered for the right price set by ryden or
01:57:52 for the right price set by ryden or quoted by ryden yes right
01:57:58 can i then turn to um the question of mr blake's relationship with mr madison and what you knew of that
01:58:06 that now we saw earlier an email of the first of october two thousand i didn't know of it no i i does the topic of what sorry i'm not this is what i want to explore i'm not jumping to the conclusion i just
01:58:17 i'm not jumping to the conclusion i just want to ask you about it this is art406206
01:58:26 and we looked at it earlier on in your evidence
01:58:29 evidence dated the first of october 2015 and it's about a conversation that you had with peter madison of the tmo about steve blake and in the first paragraph in line two he he or you
01:58:43 he he or you say to him um he that's peter madison is conscious that his relationship with steve goes back a long way and steve talks to him direct however peter doesn't want that
01:58:57 direct however peter doesn't 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 now when you say
01:59:09 now when you say that he is conscious that his relationship with steve goes back a long way
01:59:14 way and steve talks to him direct um when did you first find out that they knew each other at all do you remember uh i think this was not long before it was not long before
01:59:26 not long before it was not long before this when it became apparent that they were having direct conversations that were leaving us out of the loop which is why i then had the conversation with peter madison yes did how did you find out that they
01:59:37 yes did how did you find out that they were having conversations direct and leaving you out of the loop i can't remember precisely but i think it would have been through a conversation with neil reed
01:59:49 when you say to neil reed he is conscious that his relationship with steve goes back a long way is that something that peter madison told you yes do you remember what he said to you i
02:00:01 do you remember what he said to you i remember specifically i was just trying to recount what came up in the conversation right did he give you any indication of how far his relationship with steve blake went back i don't believe so right did you ask him
02:00:14 i don't believe so right did you ask him i don't think so right what did you glean at all if anything about their relationship that they had worked together for some time in in the past and that uh obviously steve blake was
02:00:26 and that uh obviously steve blake was talking to him and trying to have conversations uh in regard to the delivery of on the project which should have actually been coming through us did you have any concerns that the
02:00:37 did you have any concerns that the relationship as described to you by mr madison might somehow compromise the tmos particularly mr madison's impartiality about ryden and its performance and its
02:00:49 ryden and its performance and its pricing there was nothing in the conversation that implied that no do you did you yourself have any inkling or concerns about nothing about that
02:01:00 can we then go back in time to 2014 and i want to show you ryd 3086 please
02:01:13 now if we go to the bottom of page one we can see that this is an internal email
02:01:20 email on the 20th of february 2014 from katie bachelier to simon lawrence and others in ryden and she says all i have just called peter blythe from
02:01:33 all i have just called peter blythe from artelia
02:01:34 artelia to see if there was any early feedback on our tender in short the answer was not yet but he did mention that they will be holding interviews on 5th of march
02:01:43 march he couldn't tell me at this stage whether we would be invited or not but we should hear by the end of the end of next week might be worth putting the date in diaries just in case
02:01:54 in your experience was it common at the time to give feedback to bidders on their tenders during the oj eu process not at all not at all
02:02:05 eu process not at all not at all you say not at all in quite firm terms was that because that would be forbidden yes yes yes can we then go to
02:02:17 yes yes can we then go to six four ryd3086648
02:02:22 um this is another internal email within ryden
02:02:27 ryden uh now on the 6th of march 2014 so a couple of weeks later and into the aj eu tender process and we can see here that steve blake
02:02:41 and we can see here that steve blake is telling tim shutler at ryden copy to jeff henton um that the at the housing conference we we had meetings with senior
02:02:53 we we had meetings with senior representatives from knc and my opinion is that in the event we were successful contractor they would have no issue signing up to a form of documentation as we suggest then two lines down he says we have been
02:03:05 then two lines down he says we have been informally advised that we are in pole position ours to lose
02:03:12 lose were you aware that ryden had been informed
02:03:15 informed informally of its performance on in the tender even before the interviews had taken place no i wasn't if you discovered that fact
02:03:26 no i wasn't if you discovered that fact what would your reaction have been it would have been the the tender process have been compromised
02:03:36 right
02:03:39 and what would the consequence of that have been
02:03:43 have been effectively it could avoided the tender process right so the informal information that reiner and pole position ours to lose was
02:03:54 lose was irregular and improper yes yes right
02:04:01 and would you have been unhappy if artelia employees had told the bidder that they were likely to win before the close of the oj eu process yes
02:04:11 yes we then just move on on this topic um back a few days in time but on in the topic art
02:04:17 topic art four zero six four three three please this is an email from jenny jackson of the 3rd of march 2014 so just a few days before we were looking at it
02:04:30 before we were looking at it and um you're copied into this
02:04:37 uh and
02:04:41 uh in the first line uh she says that she wants to discuss
02:04:52 says that she wants to discuss uh i'm just looking at the email um yes you are copied into it well there's an email from her to david gibson
02:04:59 gibson and she says we need i need to think how this will be presented to the board we will be asking them to sign a contract for a contract some in excess of the current budget the contract specifically includes a term referring to value
02:05:10 includes a term referring to value engineering and if necessary work can be omitted
02:05:12 omitted i'm in the office tomorrow and we can discuss how this will be presented
02:05:18 and then
02:05:22 if you go to page two of this document that's how it culminates but i think so i wanted to show you that first yes it is the end result of the discussion that starts on essentially on page two and she sends to
02:05:34 essentially on page two and she sends to you an email of the second of march which i want to show you and it's it you can see that it says please can we discuss how we intend to bridge the gap between the 9.249 odd million pound
02:05:46 between the 9.249 odd million pound tender submitted and the 8.5 million client budget and then she says the advice obtained from trials and hamline's is clear then we have a different typeface and i better read it to you kctmo has
02:05:58 and i better read it to you kctmo has advertised the contract as a restricted procedure based on an estimated contract value of 8 million to 10 million pounds tenders are required to submit a price for undertaking the program and kctmo is
02:06:09 for undertaking the program and kctmo is required to assess the tenders based on the price
02:06:11 the price straight quality criteria you have set out in the tender documents the restricted procedure does not permit a contracting authority to undertake negotiations with the tenderers prior to contract award and does not
02:06:22 prior to contract award and does not provide
02:06:23 provide for the contracting authority to revise the tender document or for tenders to submit revised best and final offers to do so would be a breach of the eu regulations even if you allowed all the tenders to renegotiate their prices
02:06:35 tenders to renegotiate their prices your only eu compliant options are to assess the tenders and award the contract to the tenderer who scored the highest based on your price straight quality criteria or not award the contract and run a new
02:06:46 or not award the contract and run a new procurement exercise if the contract allows it you may run value engineering exercises with your selected tenderer but only once the contract has been entered
02:06:57 entered so that was the advice
02:07:01 and then she goes on to say in the event that there is a formal challenge we may be required to disclose some stroke elements of the formal report so i suggest the references to value engineering are
02:07:12 references to value engineering are removed
02:07:13 removed for the moment i think the way forward is to enter into the contract for nine point two four nine two down four million and then embark on the ve post award say that the award is on the basis of if the published
02:07:24 on the basis of if the published evaluation criteria of of the published evaluation criteria there will need to be some informal quotes on quotes discussion with the preferred contractor prior to award so
02:07:35 preferred contractor prior to award so there is an understanding of the approach views question mark now we then see your response to this mr cash if we go to it which is over the page to page one
02:07:50 and you say this is third of march next day
02:07:55 day jenny i agree with you in terms of placing the contract at the submitted tender value and an offline discussion with the preferred contractor particularly to set out the intent once a contract has been entered into there is absolutely nothing to say that once
02:08:07 is absolutely nothing to say that once in contract the kcta cannot look for ways of making savings and as part of the informal discussion the intention can be made clear and although not binding the contractors agreement sought to work with the ctmo to achieve the required savings
02:08:19 ctmo to achieve the required savings some savings have already been identified and the contractor may will put forward others for consideration during the discussions that can be investigated prior to entering into contract do you remember this email chain yes i
02:08:31 do you remember this email chain yes i do yes now at this point that you write your email third of march there's been no formal notification to any of the bidders had there none and the oj eu process was considering was it wasn't it was
02:08:43 considering was it wasn't it was continuing was correct yes there were interviews still outstanding yes and the question here was how to bridge the gap uh between the tma's budget and ryden's price but you had no discussions about
02:08:54 but you had no discussions about bridging that gap yet had you no no sorry i was going to say actually the discussion was more about the tmos signing off that the appointment of the contractor had a
02:09:05 appointment of the contractor had a value over their approved budget yes and and you had no discussions about bridging that gap between the tma's price and any other tenderest price either had you correct yes so what was contemplated i
02:09:16 correct yes so what was contemplated i think was an it was an informal discussion with ryden about value engineering and not
02:09:23 not the three other tenderers there were only two others at that time that were being considered in the end that's correct but i'm right in on my point aren't i that there wasn't any contemplation of any even any informal
02:09:36 contemplation of any even any informal discussion with those other tenderers only with writing that's correct
02:09:45 can we then go back just to jenny jackson's advice on page two
02:09:50 i showed you this a minute ago but i just want to focus on it uh oops
02:09:58 yes she says there um as i've shown you um that uh the the
02:10:09 uh the the well she suggests that references to value engineering are removed for the moment in the formal reports
02:10:17 reports did you support the advice to remove mentioning value engineering i can't remember if i made any objections or not at the time but uh
02:10:28 at the time but uh i can't say for sure right did you understand looking at the last paragraph of her advice
02:10:36 advice or view that she meant that valuation value engineering exercises could only be conducted post award yes that was the intention and what did
02:10:47 yes that was the intention and what did you understand post award meant in that context
02:10:51 context post confirmation of appointment of ryden's
02:10:54 ryden's right so not therefore before notification of the preferred bidder correct or indeed in the standstill period
02:11:01 period after the notification correct yes or indeed at the end of the standstill period or do you think at that point you could discuss it at the end of the standstill period then we could we would be in a position
02:11:12 we could we would be in a position because they would have been effectively uh selected right i see so i think you would say um you could only
02:11:21 only properly start discussing value engineering at the end of the standstill period and not before correct
02:11:28 correct [Applause] but she is of course saying that the tmo can have an informal quote unquote discussion prior to award so that the contractor
02:11:40 prior to award so that the contractor could understand quotes the approach now to the naked eye mr cash she is saying that although you can't actually seek to negotiate
02:11:52 seek to negotiate a bidder's price you can tell them informally off the record as it were that the tmo would want to have a value engineering discussion as part of the contract they will enter that's how it looks
02:12:03 will enter that's how it looks is that how you understood it that as my understanding was that yes it was to to set out uh the principles of what would happen post-award
02:12:14 post-award indeed in in in is this wrong that in other words she's saying that the tmo
02:12:20 the tmo can seek to get some tacit agreement from ryden um that will that they will enter into a contract that includes a ve exercise not so much a tacit agreement
02:12:31 exercise not so much a tacit agreement it was an understanding which would not be it's not a binding agreement in any way and it was there to try and give her the ability to provide comfort to the board to
02:12:41 to of the tmo to sign off a contract value in excess of their approved budget all right let's try it a different way that she was suggesting an informal as it were not in a wink
02:12:52 informal as it were not in a wink agreement not binding in law from ryden in advance of them being notified that they were the preferred bidder i wouldn't uh no i wouldn't call it a nod in a wink i'd i think that's an incorrect um reference
02:13:04 i think that's an incorrect um reference i
02:13:04 i think it's more a case of uh the way i saw it was it was having a conversation with the preferred bidder but not actually telling them that they were preferred bidder in terms of saying that this is the
02:13:15 in terms of saying that this is the approach that would happen in the event that they might be awarded a project indeed what did now let's go back to what you say about about this at page one you you refer there
02:13:26 there to having an offline discussion with the preferred contractor when he when did you envisage that that offline discussion as you put it would
02:13:37 offline discussion as you put it would take place uh that it would happen at a point in time before award of the contract right in other words before notification of the preferred bidder
02:13:48 of the preferred bidder before yes right and by offline discussion do you mean secret uh i suppose it's secret because it's not in it's not actually in conjunction with discussions
02:13:59 actually in conjunction with discussions with anybody else that was my next question and was the purpose of that offline discussion say that the tmo could get some sort of if not binding agreement then comfort
02:14:11 if not binding agreement then comfort from the contractor in an informal way that they would work with the tmo to achieve savings yes but not with any particular reference to them being a preferred contractor
02:14:22 does it come to this the tmo it was all right with you the tmo could make some sort of or come to some sort of informal understanding with ryden that they would reduce their prices by
02:14:33 that they would reduce their prices by way of value engineering once in the contract and that understanding would be entered into or arrived at perhaps prior even to the award of the contract it was my understanding that the conversation would not necess would not
02:14:44 conversation would not necess would not make any reference to their position in terms of the tender that it was purely trying to seek an understanding that they that they were accepting of the process that would be
02:14:55 the process that would be followed once an award had been made if they were successful you you go on to say in your email
02:15:07 that uh some savings it says the penultimate line have already been identified and the contractor may well put forward others for consideration during the discussions that can be investigated prior to entering into
02:15:18 investigated prior to entering into contract
02:15:20 contract are you saying there that the tmo could ask writing to identify specific savings that they would make before they're awarded the contract no as uh reference to other savings that might be uh identified by other members of the
02:15:31 be uh identified by other members of the professional team not by the contractor uh all right but in terms of timing the timing is that ryden would identify um
02:15:44 other savings for consideration which could be uh discussed before the contract was awarded no that's not that's not what's being said there what are you saying there
02:15:56 said there what are you saying there the the savings had already been identified that there were savings that they some had been identified within ryden's tender yes some have been identified by other members of the professional team yeah and that there were still ongoing investigations in terms of looking at
02:16:08 investigations in terms of looking at what other potential savings might be made by the professional team and that once the contract had been awarded to whoever it might be awarded to
02:16:14 to then further discussions might be entered into as to whether there are any actual further savings other than those that already been identified yeah this is rather different though from what jenny jackson is saying isn't it because she's saying that the tmo could let a bidder know
02:16:26 that the tmo could let a bidder know that the tma would like to do a valuation exercise when in contract but not actually seeking savings before the contract correct yeah but you're what you're suggesting is rather different from
02:16:37 suggesting is rather different from the trauer's advice isn't it no because trials are saying that you can you if you enter into a contract at the value then you can enter into a value engineering process once they are awarded indeed what you're
02:16:48 once they are awarded indeed what you're suggesting i think in your email is that they could be this offline discussion with the preferred contractor prior to the contractor even being notified that it was preferred purely to identify the process that
02:17:00 purely to identify the process that would be followed it wasn't wasn't to actually investigate any savings or any value engineering i see so that's the distinction you would draw is it in other words identifying a process rather than identifying a specific
02:17:11 rather than identifying a specific savings
02:17:11 savings correct i see why not uh go through the same process with the other bidders we should we probably should have done but the feeling was that they were so far away that there was no opportunity
02:17:23 far away that there was no opportunity that um that there was no way that they were going to close that gap and the the tmo actually needed to be able to have comfort uh otherwise they wouldn't be
02:17:34 comfort uh otherwise they wouldn't be able to sign off the tender report in which case then we wouldn't have had a project because the nature of the comfort if i've understood it correctly is in in effect to tell the preferred bidder
02:17:45 bidder that although the contract sum was 9.4 million in reality there would have to be a reduction in different aspects of the work to bring it down within budget
02:17:56 it down within budget that was the essential nature of what was being
02:17:59 was being uh communicated wasn't it yes there would be a process gone through to uh so
02:18:05 uh so effectively it was managing the contractors expectations that if they were awarded a project a contract at 9.24 million that actually eventually the price that gets uh that would get signed off wouldn't be
02:18:17 uh that would get signed off wouldn't be that value
02:18:21 yes why didn't you just to revisit the point the chairman's just put to you why didn't you adopt the same exercise across a level playing field with all the tenderers to give them an equal opportunity to discuss the approach proposed
02:18:32 to discuss the approach proposed approach if even if not figures for value engineering because we felt that the the difference between the the um the tenderers in terms of what had already been evaluated was such that
02:18:43 already been evaluated was such that uh there was only really one one player in the
02:18:46 in the in the um in the process now right this is before even the interviews as we can see it's four days before the interviews what was the point of having the interviews then if you'd already made the decision that as you put it there was only really
02:18:58 that as you put it there was only really one player in the process because the interviews had been identified as part of the og process evaluation process and therefore we couldn't just discount those and they were part of the overall scoring mechanism to achieve an overall
02:19:10 scoring mechanism to achieve an overall score
02:19:11 score score but even if uh ryden had scored zero
02:19:14 zero and everyone else had scored five they still wouldn't have actually been in a better position it wouldn't have changed the markings
02:19:23 indeed and doesn't that rather tell us that in fact this exchange whether or not it complies with the legal advice or con corresponds with trauer's legal advice
02:19:37 corresponds with trauer's legal advice shows us that actually the tmo had essentially selected ryden purely on the basis of price on the basis of the tenders as had come
02:19:46 come in and it was for that reason that the value engineering discussions or approach to value engineering was not um opened uh with any of the other tenders no because the overall evaluation criteria were based
02:19:58 overall evaluation criteria were based on
02:19:59 on price quality and interview so the uh the price was forty percent the uh overall quality was fifty five percent and the interview was five percent so actually the emphasis
02:20:10 five percent so actually the emphasis was on quality not on price
02:20:18 let me put it a different way whatever had led to the conclusion you had already made your minds up by the third of march that ryden was going to win
02:20:26 to win and which is why you didn't approach the other tenants you made our minds up that was the
02:20:30 was the outcome of the evaluation it wasn't the fact that we just made our minds up we had gone through a particularly detailed process of evaluation and scoring which had resulted in all three tenders being scored and ridens was
02:20:41 being scored and ridens was exception yeah that had performed exceptionally well on both price and on quality relative to the other tenderers but as i said to you a moment ago that process hadn't been completed yet the
02:20:53 process hadn't been completed yet the scoring because the interviews hadn't taken place which represented five percent and that that gap wouldn't have been bridged even as i say
02:21:00 as i say rydens had scored zero and uh the other tenders had scored five so in actual fact although we had to go through that process because that's the odu process and somebody could have challenged us if we
02:21:11 somebody could have challenged us if we hadn't
02:21:12 hadn't gone through that process um it was already
02:21:15 already a foregone conclusion i think that answers my question can we then go to the top of this email art 446433
02:21:27 art 446433 and we can see there that um as i showed you before jenny jackson says to david gibson we need to think how this would be presented to the board is it right
02:21:39 be presented to the board is it right that the tma wanted to seek reductions
02:21:43 from ryden as the lowest tender even in advance of entering into the contract
02:21:50 it was expected that the value engineering would result in reductions in the contract award price and was that because the tmo wanted to reduce the price to fit their budget
02:22:02 reduce the price to fit their budget they wanted to reduce costs yes to fit their budget yes or as close to as they could yes because they didn't have any way of increasing their budget right and by this advice were you assuring the tmo
02:22:13 assuring the tmo in what you were saying uh that they could seek reductions in advance of the award of the contract or at least seek clarity about the approach to reductions i can put it more delicately in advance of the award of the contract
02:22:25 in advance of the award of the contract if we could say that the contractors the contractor had understood what the process would be but we couldn't give any further clarity other than that because there is no obligation or commitment
02:22:36 there is no obligation or commitment from the contractor to actually have to comply with that yes
02:22:43 so so in a nutshell this email change shows that even before the interviews it was forming part of the oj eu process there were unilateral or there were there were proposals for
02:22:54 there were there were proposals for unilateral discussions with ryden as one of the bidders about value engineering that were not made available to the other bidders about the process of value engineering not about the detail of value
02:23:05 not about the detail of value engineering uh and if it was about the process of a and therefore completely above borders you might have it why was it needed why did it have to be quotes on quotes informal or offline as you put it because the whole
02:23:17 offline as you put it because the whole process of value engineering had been taken out of the tender report and therefore it was going to become a post award uh process right do you feel entirely comfortable
02:23:28 right do you feel entirely comfortable about this way of proceeding mr cash no but this was a it was a process of being able to get the tmo board to be able to sign off and get to a position where a contract could be
02:23:39 position where a contract could be awarded
02:23:40 awarded let's say otherwise there wouldn't have been a contract award and there wouldn't have been a project does that tell us that artelia was prepared to support the tmo in a course of action that the tma wanted to take even if artelia wasn't entirely comfortable with
02:23:52 artelia wasn't entirely comfortable with it
02:23:52 it it was i suppose again where we were being put under pressure by our client to try and follow a process yes
02:24:03 yes now let's move forward a little bit in time
02:24:07 in time as i understand it chronologically the events are on the 7th of march the interviews take place
02:24:13 place and on the 10th of march claire williams produces a report recommending ryden as the winner do you remember that as well if i got those dates i think those are correct yes
02:24:22 yes yes and on the 12th of march i think it's right that artelia produced a final tender report also recommending ryden as the winner and i can give a reference for that that's a rt402197 there's no need to
02:24:34 that's a rt402197 there's no need to turn it up and then on the 18th of march just following the chronology putting it in context
02:24:40 context notices were sent by artelia to all bidders letting them know the outcome that that's does that accord with your recollection yes and um the one that went to ryden is at a
02:24:51 um the one that went to ryden is at a rt408632
02:24:53 rt408632 i just want to have a look having given you the framework of the dates 8 7th of march to 18th of march 2014 what happened in detail in that period
02:25:04 what happened in detail in that period mr chairman this is a reasonably lengthy um topic but we can make some progress in five minutes um i'd quite like to start on it if we can alright yes uh i could probably get down to up the
02:25:17 uh i could probably get down to up the next subtopic in five minutes can i ask you to go please to ryd 30331
02:25:26 this is an email chain between the tmo and ryden on the 13th and 14th of march 2014. and can we look please first of the email from david gibson of the tmo to steve blake of ryden at the very
02:25:37 to steve blake of ryden at the very bottom of the first page page one and then over onto page two
02:25:44 the bottom of page one these things get cut off sometimes but the bottom of page one
02:25:49 one shows that this is an email
02:25:54 uh from david gibson to steve blake 13th of march 2014. if we get to the top of page two
02:26:01 page two we can see the substance of it let's look at the first three paragraphs he says steve peterson peter madison of the tmo has given me your contact details i understand you are currently in a meeting i've attached a simple spreadsheet
02:26:12 spreadsheet indicating the areas we would like you to look at in relation to possible savings
02:26:16 savings our target is around 800 000 pounds which included the cladding savings already priced and any grant income to the scheme um
02:26:27 were you aware of this email at the time do you think no you weren't were you aware at the time that ryden was asked by the tmo to find savings of eight hundred thousand pounds no and therefore it would follow that
02:26:38 no and therefore it would follow that you weren't aware uh that the tmo had asked ryden to find savings of eight hundred thousand pounds even before ryden had been notified that they were the successful bidder correct but does that surprise you it does
02:26:53 why does it surprise you because i wasn't aware that this was happening well that's that goes without saying that's how most surprises happen but does it shock you well yes because i wouldn't expect that of an organisation of the tmo
02:27:05 of an organisation of the tmo no if we can go up to page one we can see that the parties agree to meet the following tuesday which is the eighth as it turns out the 18th of march 2014
02:27:17 18th of march 2014 there was an error about monday and tuesday
02:27:20 tuesday now that meeting was in the period during which the oj eu process was still running wasn't it yes because in fact the
02:27:27 the although the letter went out on the 18th of march 2014 it went out late in the day on that day were you uh or to your knowledge anybody else at artelia aware that on the 18th
02:27:38 else at artelia aware that on the 18th of march
02:27:38 of march 2014 before the notification of the result tmo and ryden had a meeting to discuss savings to be made including savings on cladding no and again are you surprised in this
02:27:50 no and again are you surprised in this in the sense of shocked to discover that that had happened yes
02:27:55 i i seem from what you've just told us that there was no one from artelia at the meeting not that i'm aware of no i must can i also assume that you've never seen any notes of that meeting no we've asked those who have
02:28:08 no we've asked those who have attended whether they took any notes and we've not seen any um can we then go to um art 408755 this is the email from philip booth
02:28:21 this is the email from philip booth sending out ryden's notification that it was
02:28:23 was it was the preferred bitter you can see that uh 18th of march 2014 and it's centered
02:28:28 centered five to six in the evening 5 55. do you see that yes dear peter and it goes to ryden peter ronald ryden dear peter please find attached the notice of tender result for the works of grandfather tower
02:28:41 grandfather tower and it appears to be sent out as far as we've been able to piece together the timing after the meeting between the tmo and ryden about value engineering on that day do
02:28:52 about value engineering on that day do you know how artelia knew to send out the notices was there a final instruction from the tmo to press the button and send it out i would expect there would have been
02:29:03 i would expect there would have been because once our tender report gets submitted it gets reviewed and i believe that it had to be presented to the tmo board for them to sign off and approve the appointment of the
02:29:14 and approve the appointment of the contractor yes do you know when that happened i can't remember for sure no but it would i believe it would have happened prior to us issuing those we wouldn't have issued them without some reference from the tmo no indeed and do you do you know
02:29:26 and do you do you know you have a feel for how soon before five to six on the 18th of march 2014 the instruction came from the tmo to send this letter out to the to the bidders i don't know you don't know right mr chairman is that
02:29:39 you don't know right mr chairman is that a convenient moment yes and that's who's you does it it does right well mr cash we're going to finish there for the day i'm sorry i've got to ask you to come back and
02:29:49 and answer some more questions tomorrow but i think you may have been warned that that
02:29:53 that was likely to happen yes i have been um so
02:29:56 so we'll resume at 10 o'clock tomorrow morning please don't talk to anyone about your evidence or anything to do with it overnight all right and we'll look forward to seeing you tomorrow all right thank you very much
02:30:06 much thank you very much we'd like to give the usher thank you
02:30:19 thank you 10 o'clock tomorrow
02:30:43 you