Kensington & Chelsea Tenant Management Organisation (TMO) Evidence - Monday 26th October 2020 (1/2)

Full transcript

00:00:15 good morning everyone welcome to today's hearing we're going to continue today hearing evidence from mr peter madison so would you ask mr madison to come in please thank you

00:00:39 good morning mr madison good morning all ready to carry on yes thank you very much yes mr millet good morning mr chairman thank you mr madison good morning good morning um we were i think on the topic

00:00:50 morning um we were i think on the topic of the discussions with ryden in mid-march 2014 when we stopped on thursday

00:00:57 thursday afternoon before we go back to that topic can i just revisit with you and different topic which we did also look at last week which was the question of sprinklers and you'll recall the exchange we had

00:01:08 and you'll recall the exchange we had about that subject can i show you rbk3z

00:01:14 please

00:01:19 now this is uh the tmos business plan year two from 2009 to 2014 and you can see that it bears the date of march 2010.

00:01:30 of march 2010. just in general terms do you remember whether this was a document that you saw when you first joined the tmo in january 2013 i don't remember seeing it i remember seeing it right let's see

00:01:42 seeing it right let's see if a particular part of it jogs a recollection can we go to page three please this is section one introduction and background uh and you can see the first two paragraphs

00:01:54 can see the first two paragraphs the 2009 tmo business plan sets out the ames values and strategic objectives for the period 2009 to 14 and builds upon our first plan which was written in 2006 and updated

00:02:07 which was written in 2006 and updated during 2008 and then it says in the second paragraph the tma was set up in 1996 and the arms length management organization almo was established in 2002 kctmo manages

00:02:21 was established in 2002 kctmo manages 9440 properties of which 73 600 6920 are tenanted and 27 2548

00:02:34 and 27 2548 our leasehold dwellings 98 of our properties are flats of which 25 percent are in blocks of 10 stories or more 66 of the rented tenants rely on housing benefit

00:02:45 benefit and 50 of rented households have a person with a long-term illness or disability living in the home half of tenants have their origins within the many black and minority ethnic bme communities that live in the royal

00:02:56 communities that live in the royal borough

00:02:58 borough now can i just ask you in general terms were you aware when you joined the tmo of these statistics or roughly these statistics um

00:03:13 i suppose roughly the statistics right and now we discussed the question of sprinklers at day 57 pages 57 to 61. and i just want to ask you some

00:03:25 to 61. and i just want to ask you some general questions when the decision was made in 2013 not to retrofit sprinklers in general in the light of the recommendations made by the latino house

00:03:38 recommendations made by the latino house coroner

00:03:39 coroner did the tmo to your knowledge take account of the high proportion of high-rise flats in the tmos housing stock um so i think there were there were a

00:03:50 um so i think there were there were a number of

00:03:51 number of um different conversations that were going on at that time in relation so um the

00:03:58 so um the head of health and safety within the tmo was in dialogue with the fire brigade about

00:04:02 about um about potential works that would result from the lachnal house inquiry and um

00:04:10 and um there was a conversation that happened with the fire brigade regarding sprinklers and i don't think that would have there was ever a decision made it wasn't decision made not to pursue sprinklers was something that was

00:04:22 sprinklers was something that was could and would be considered as part of an ongoing strategy but it was identified that it was a complex issue both in terms of the practical issues of

00:04:33 both in terms of the practical issues of retrofitting sprinklers but also in terms of the cost although the cost of the the idea of within our asset management strategy was to prioritize works that related to health

00:04:45 prioritize works that related to health and safety when you were considering this matter in 2013 not to retro fit sprinklers for the

00:04:57 not to retro fit sprinklers for the reasons you've given was any consideration given so was a count

00:05:02 count taken of the proportion of those with long-term illness or disability within the housing stock um i believe at that time i think that

00:05:13 um i believe at that time i think that would be something that um would be considered in the is part of the

00:05:18 the overall fire strategy in terms of fire risk assessments might take that into account or we had a and also there was a high level health

00:05:27 health health and safety rating system that was applied in terms of looking at health and safety risks in relation to the asset management strategy when the designs for the grenfell tower

00:05:38 when the designs for the grenfell tower refurbishment were being considered was any account taken of the profile of the residents so far as concerned their long-term illness or disability so that you as the client could assess

00:05:50 so that you as the client could assess the fire safety of the design um i mean the consultation that was um undertaken with residents as grenfell um took into into account people's

00:06:03 um took into into account people's individual requirements so we had a dialogue with with residents not um so

00:06:11 not um so [Music]

00:06:12 [Music] um

00:06:17 yeah and also on the outs at the outset of the works we um worked with ryden to visit all of the homes and talk to people about their specific requirements and understand

00:06:28 and understand if there were any particular needs in general there was a a housing management department would also have uh close liaison with residents and any particular needs that they

00:06:39 particular needs that they they had they were based on site do you recall

00:06:42 recall [Music]

00:06:43 [Music] either before your time from documents you saw when you arrived or during your time whether any specific instructions were given by the tmo either to studio e or to ryden

00:06:55 either to studio e or to ryden to take into account the long term uh illnesses or disabilities of those living within the tower when considering the design um

00:07:06 considering the design um in terms of the implication in terms of the um

00:07:11 the um the the delivery of the work we would talk to residents and understand if there were any particular needs that we could accommodate through throughout the works but that's not really my question my question was really a more general one

00:07:22 really a more general one when when con giving instructions so far as design was concerned to studio e author writing was any specific instruction given that

00:07:33 was any specific instruction given that they should in general take into account the long-term illness or disability profile of the residents when coming up with their designs it would be something that we would consider as part of the

00:07:45 consider as part of the consultation process that we put in place which was about communicating to residents what we were proposing to do inviting feedback inviting residents to come and talk to us at drop-in sessions

00:07:56 us at drop-in sessions visiting residents in their homes and taking account of any specific concerns that were raised throughout that process that was quite that was an ongoing process that we we managed throughout the project right

00:08:09 we managed throughout the project right well we'll revisit that topic i think in greater detail at a later stage in this inquiry

00:08:13 inquiry for the time being could you just tell me was a dda consultant ever appointed on the grenfell tower refurbishment i don't know specifically um it may have

00:08:24 i don't know specifically um it may have been there may have been a dda consultant employed as part of the design of the flats and the um the work that was done to your sorry to your knowledge was

00:08:35 to your sorry to your knowledge was a dda consultant or the dda consultant ever given any specific instructions to consider whether retrofitting of sprinklers would be necessary or appropriate for the building i don't think it would have

00:08:47 building i don't think it would have been a conversation regarding well there may have been i i didn't have any direct contact with any uh dda consultant now can we then go back to where we were on thursday afternoon when we broke

00:08:59 afternoon when we broke and i want to go back to specifically to the 18th of march meeting now just to refresh your memory of the documents um can i show you please ryd

00:09:12 can i show you please ryd 403302

00:09:18 this is an email from steve blake on the 13th of march

00:09:28 and it's to alan sharrick so it's internal

00:09:33 internal and i want just to show you the second email down which that forwards on and it's an email from steve blake to david gibson

00:09:40 gibson at 18 30 on the 13th of march can you see the second email there yes and in the third line he says as requested we will respond early monday regarding opportunities

00:09:52 monday regarding opportunities for savings and time scales so that's the response and immediately above it it says

00:09:56 says your spreadsheet says the tuesday pm meet rather than a monday pm as as email which would work perfectly you can take it from me that the 18th of march 2014 was a tuesday mr madison

00:10:08 march 2014 was a tuesday mr madison do you recall that there was a meeting on the 18th of march 2014 with ryden um i can't be sure of the date but there was a meeting with ryden regarding this

00:10:20 was a meeting with ryden regarding this this this discussion we were having regarding the approval and um that i was looking to develop for the board and claire williams recalls that that meeting took place in the afternoon of

00:10:31 meeting took place in the afternoon of that day

00:10:33 that day i don't recall she also recalls that it took place at the tma's offices do you recall that i don't you know do you remember where it was i don't you didn't you were at that meeting i think yeah don't you yes

00:10:45 don't you yes and claire williams and david gibson were also there weren't they they both said they were you don't have any do you have any reason no no reason to disagree with that no

00:10:55 that no and from ryden can you tell me who was there please i can't recall the meeting i'm referring steve lake there i can't recall but it's likely he would be right right you recall nothing at all at the meeting

00:11:08 you recall nothing at all at the meeting no not specifically now right um let me see how far we go with this was the purpose of the meeting to discuss savings that could be made uh over and above the or below as it were the price that ryden had tended at 9.2 million

00:11:21 ryden had tended at 9.2 million to close the gap no i think the purpose of this meeting was so i think um david gibson i'd asked david gibson to put the meeting in as a backstop to

00:11:32 meeting in as a backstop to because this was close to the deadline for the board report that i needed to put in place so we needed to make this clarification as to whether we could agree the in principle the

00:11:43 principle the pre-contract agreement and um the the terms of that and that would affect what i was going to report to my board so this meeting was put in so

00:11:54 my board so this meeting was put in so that we could it was a bit of a play saver really to ensure that any issues that would need a clarification to allow my report to my board could be

00:12:05 my report to my board could be identified what was the date that you needed to put what was the deadline for the board report that you needed to meet and the board reports the 27th of

00:12:16 meet and the board reports the 27th of march and normally the deadlines are fortnight before so it would probably be around right this time had the date for the delivery of the board report or the the date for the board meeting already been fixed yes

00:12:27 already been fixed yes when was it fixed it would be fixed at the start of the year so you were i was working to a fixed deadline

00:12:35 deadline i see you say there was a fixed deadline was it possible to arrange things so that that deadline could be moved um not easily now and um the boards

00:12:48 um not easily now and um the boards that had there's quite a large number of people involved in the board and the the meetings were scheduled throughout the year if i didn't get the report approval to that meeting

00:12:59 meeting they met every six weeks i think so it would have meant six weeks of delay if i didn't get to that board meeting so in your mind this was a hard deadline yes the 26th of march

00:13:09 march 27th the meet the 27th of march i think was the meeting and you needed to deliver the report the night before no i fought night before a fortnight before so what was the what was the date the delivery the deadline for the report

00:13:22 the delivery the deadline for the report i can't remember off of my hand off my head but it would be you know from memory this meeting was put in

00:13:30 put in close to that deadline so if any clarification was needed at that time um i could have that conversation or we could

00:13:37 could make that clarification

00:13:42 right i mean the fortnight before the tmo board meeting if it was fixed for the 27th of march would have been the 13th of march

00:13:53 um as a matter of calendar mathematics that must be right maybe i'll get let me get my days wrong maybe it's maybe it was a week before i i don't really remember right okay the the the dead so i think um

00:14:06 the the the dead so i think um i can't remember the the exact dates here but um the schedule the process that a board report would go through is i would submit a board a draft of it to the executive team and

00:14:17 a draft of it to the executive team and the executive team would review it and i'd present it to the executive team first

00:14:21 first and then it would go on to to the board so there would be an agenda review at executive team so those dates will be minuted throughout

00:14:40 yes i mean you say the meeting was a place safer but in fact it was the occasion wasn't it when five days after the 13th of march email we can see on page one this

00:14:53 email we can see on page one this question

00:14:54 question the discussion of the spreadsheet and the reduction of the price to close the gap to eight hundred thousand less was going to take place wasn't it well that wasn't the purpose of the discussion so the

00:15:05 discussion so the the reduction of the gap wasn't the eight hundred thousand was that wasn't a negotiation reduction of the gap that was partly a mixture of things it was partly the application of alternate

00:15:16 partly the application of alternate options within the tender so windows and cladding there were alternate there were alternatives to alternative materials two different materials priced within the

00:15:29 materials priced within the the bill of quantities or the specification for the um uh the tender plus the windows needed a planning application to be uh to be followed through and completed

00:15:41 uh to be followed through and completed to confirm the firm of those costs there also needed to be some work done relating to some of the works that were included in the tender

00:15:49 tender that had also been included in the calc project

00:15:52 project so we need to establish the cost of those

00:15:56 those items and if the planning permission for the acm cladding wasn't successful and the zinc alternative was given then we

00:16:07 the zinc alternative was given then we would have to review the budget at that point my question was a slightly different one you suggested that the 18th of march meeting was fixed as a place saver or placeholder in fact looking at this email and

00:16:18 in fact looking at this email and looking at what happened there wasn't going to be any detailed discussion or indeed any discussion between the 13th of march and the 18th of march what i'm putting to you is the 18th of march was the occasion on which discussion

00:16:30 was the occasion on which discussion should happen it wasn't just a place saver

00:16:32 saver no i don't agree um the the work that was required on this had been done in the dialogue between david gibson and steve blake and his team um

00:16:43 team um in the in the period between the 13th of march

00:16:46 march and the and the meeting and actually at the meeting it was there was very little required because we clarified the points that were needed which were about which was the things that were written into the terms of the pre-contract agreement with ryden

00:17:01 are you aware of any notes or minutes that were taken of that meeting no you took no notes no and it's right that the tmo kept minutes of most formal meetings didn't it

00:17:14 of most formal meetings didn't it this wasn't the formal meeting as part of the structure of the contract this was an off an offline conversation to establish principles to allow a board report to be written which would

00:17:25 a board report to be written which would um

00:17:26 um facilitate a way forward through the formal process and you say an offline meeting what do you mean by that oh that's the words that were used in the um the conversation between simon

00:17:38 the um the conversation between simon cash and jenny jackson and it was because this wasn't part of the formal process this was a an informal conversation with the preferred contractor at that stage to clarify the principles which are the

00:17:51 to clarify the principles which are the ones that i've described about working up the detail of the planning permission and therefore the costs but also to establish the principle that post tender ryden would work with

00:18:03 that post tender ryden would work with us

00:18:03 us to to to to value engineer under the terms of that contract a figure of about 270 000 pounds it was quite an important meeting wasn't it it wasn't a contract with me it was

00:18:16 it it wasn't a contract with me it was an important meeting in terms of establishing principles and in terms of allowing me to get the approval that was needed

00:18:24 needed through the governance of the tmo but it wasn't it wasn't a meeting it wasn't a negotiation meeting it was about establishing those principles it was about establishing those principles can you explain

00:18:36 principles can you explain in the light of the purpose of the meeting why there are no notes or minutes of this meeting kept by any of the attendees um i think because all of the work had been done up before the meeting and

00:18:47 been done up before the meeting and there was actually nothing required to be noted or or agreed at that meeting it was all we've got the information we needed which was the principles about the costs and the pro in the process

00:18:59 the costs and the pro in the process for a pre-contract agreement which was really what this dialogue was all about establishing is not the true explanation for the absence of a single written record of this meeting

00:19:10 this meeting that it was supposed to be a secret meeting

00:19:13 meeting it wasn't a secret meeting i mean we there's clearly written correspondence between the two parties who are at the meeting i've also written i briefed my the executive team at the tmo

00:19:25 executive team at the tmo on this um and i think that was ministered in the executive team minute when i presented the draft report and explained that this is what we were doing and those minutes explained that i'd met

00:19:36 those minutes explained that i'd met with the preferred contractor to discuss and progress these issues so i was completely transparent about what was happening i did flag up that there was potentially some risk in terms of challenge from

00:19:48 challenge from [Music]

00:19:49 [Music] but we took advice on that yes we'll come to that shortly i i'm going to suggest to you that the reason why no note

00:19:58 note of the meeting was taken was because it was secret and had to be secret because it was a unilateral discussion with only one of the three bidders in the tender so the advice that we had from trousers

00:20:09 so the advice that we had from trousers at the at the point of the tender being received was that there was no way of having um a dialogue with the three contractors the only way forward was to either

00:20:22 move forward with the preferred contractor or go back out and reprocure so there was no option to do that what we did recognize was that there was some risk of challenge through the single dialogue with the

00:20:35 through the single dialogue with the preferred contractor and we took advice on that and uh yeah before we proceed yeah the reality is that this was a a breach

00:20:46 the reality is that this was a a breach of the procurement rules or put it this way put

00:20:49 way put the tmo in significant risk of a breach of the

00:20:53 of the of the procurement rules and you knew that i think there was a risk of challenge

00:20:57 challenge and that's a commercial risk and that was something to be considered as part of

00:21:02 of the way forward we had a situation here where we had a project that had been in progress to this point for a couple of years residents had high expectations of the works being carried

00:21:13 expectations of the works being carried out and

00:21:14 out and there had a significant number of delays the procurement of this um there was a there wasn't there wasn't a very strong field in terms of the people who well

00:21:26 terms of the people who well there weren't in terms of number there wasn't a lot of interest in the in this project because the market at that time was was quite active and um the risk here of going out to reprocure was that we may

00:21:38 reprocure was that we may get even less interest uh because the people who've already expressed an interest may not bid but also there's more delay and potentially more cost because you'd be getting the cost of building cost inflation as well so we really felt that

00:21:51 inflation as well so we really felt that um at this stage we felt it was really important to at least explore the option of uh the preferred bidder and then this wasn't a definitive decision because it at the end of that

00:22:03 decision because it at the end of that pre-commencement agreement that would still may potentially be the option of deciding to go out and reprocure

00:22:10 reprocure this is a long answer to i i what i'd hope was a simple question but but there it is um the the risk assessment exercise that you just shared with us was that something that

00:22:22 shared with us was that something that you actually discussed with anybody within the tma before this meeting there was a discussion between um so i discussed this with jenny jackson our

00:22:33 discussed this with jenny jackson our procurement specialist and she had a dialogue with simon cash from artelia so because we knew there was a there was a challenge here to be overcome

00:22:44 challenge here to be overcome and um i briefed the executive team on um this this approach right before the board report and um in the minutes it was reflected in the minutes

00:22:55 in the minutes so there was nothing secret about this this was a this was a discussion that carried some risk um some commercial risk um but felt it was the right thing to do unbalanced the risk is just analyzed for

00:23:07 unbalanced the risk is just analyzed for the moment the risk you were running was it was the risk of these secret discussions with ryden becoming known by the other bidders wasn't it because it is that which would have led to a challenge

00:23:24 and it wasn't a secret meeting it was it was a meeting with the with the preferred contractor yes of which no notes were taken and i i'm bound to suggest to you that the real risk the heart of the risk

00:23:35 the real risk the heart of the risk here was the risk of being caught because that would lead to a challenge and

00:23:42 and a likely reprocurement we took advice from this

00:23:46 from this at the beginning of this dialogue with the preferred bitter we spoke to trowers and then at the end of the process we got further advice from trowers and they summarized the risk as being there

00:23:59 they summarized the risk as being there but small

00:24:00 but small and they because in in essence what we were doing was activating some of the alternative material prices within the tender

00:24:09 tender and that in reality would have made the gap between the preferred bidder and the second place contract tractor is even bigger so they felt that the risk of challenge

00:24:20 so they felt that the risk of challenge was

00:24:20 was was was small there was there was a commercial risk there but we you know that the urgency here was to try and get the project on to site

00:24:28 site and you say there was a commercial risk there wasn't all i mean the commercial risk for the tmo was that it would become exposed to a claim for damages from a from

00:24:37 from a challenger or perhaps two challenges it could be a lot of profit but they would have to demonstrate that there was a loss of profit and as they were so far apart from so far from

00:24:49 so far apart from so far from being in a position to have actually been this preferred bidder in this both on price and on quality that seemed very into a very relatively insignificant risk you wouldn't know

00:25:00 insignificant risk you wouldn't know that of course unless you'd had the same sorts of discussions with them that you were proposing to have and indeed did have with writing well we weren't allowed to we got very clear advice from that that that you can't

00:25:10 can't that can't be done and it was also a risk wasn't there for the tma of reputational damage playing fast and loose or sailing close to the wind with the eu procurement rules

00:25:20 rules i don't think it's considered aston roose i think it's about trying to work within the rules and assessing risks as appropriate the dog rules are

00:25:33 the dog rules are complex and things move within the quite extended time of process of a procurement and i think i don't think it's uncommon the clients to have to weigh up these

00:25:44 the clients to have to weigh up these sort of risks um in in a process that can can be challenging what led you to think that risk was worth taking i think i've described that in terms of

00:25:56 i think i've described that in terms of i think that the risk would have been further delay further dissatisfaction from residents about the works not being carried out and that was our primary concern here but also we were in a rising market at

00:26:08 but also we were in a rising market at that time

00:26:09 that time it was difficult to attract contractors because there was a lot of work about and costs were rising so we would have attracted more cost in terms of um building cost inflation

00:26:19 inflation and we wanted to you know it appeared that we had a viable and an affordable scheme here based on the tender process that we'd run

00:26:29 run how well not how necessarily did you think at the time mr madison that a challenge by the other two bidders or even just one of them

00:26:41 two bidders or even just one of them might affect your relationship with the residents

00:26:43 residents in the tower sorry i don't really understand that well did you think at the time how a challenge if a challenge was to be made would affect the tma's relationship with

00:26:54 would affect the tma's relationship with the residents in grenfell tower sorry i don't make a connection well you may not now did you make the connection then

00:27:02 then i'm not sure i'm understanding the question at all did you think at the time

00:27:07 time along the following lines if our meeting with ryden gets out and there's a challenge by one of the other bidders how would that look to the residents of the building

00:27:18 the building did you have thoughts along those lines at the time i didn't but if i if if that if that eventuality had emerged i would have explained to residents why we've done what we've done and we tried to have as open a dialogue

00:27:29 and we tried to have as open a dialogue as as possible does it come to this really that retender

00:27:38 retender was just a no-no in your mind it wasn't the no-no it was an option that was always there but it wasn't it was what i wanted to do what i felt that we should do is try and see whether we can

00:27:52 should do is try and see whether we can engineer the the successful

00:27:59 preferred contractor and try and see whether we can make that work that would work

00:28:03 work both in terms of starting on site and getting the works done this is in the most time effective way but also mitigating the risk of further inflation on the project

00:28:14 further inflation on the project but also the fact that we hadn't had a good response or very very large response from the from a european-wide pre pre-qualification process so it didn't feel like there were loads

00:28:25 so it didn't feel like there were loads of contractors out there and obviously if they've been through one process unsuccessfully those contractors probably wouldn't bid a second time so there was a real danger that you put out the market and you might not have anybody there at all

00:28:37 might not have anybody there at all who's expressing an interest and the real priority here was to make sure that we got a contractor with the right experience who'd done this sort of work and that was that was one of the overriding things in this case we seem

00:28:49 overriding things in this case we seem to have that you see one of the reasons as we i think established last week tell me if this isn't correct was that one of the reasons for the reprocurement was uh that led bitter were persistently

00:29:01 was uh that led bitter were persistently too expensive and the idea of going through a reprocurement exercise was essentially to go back to the market now the market had come in at 800

00:29:12 the market had come in at 800 000 pounds at minimum above your budget did that not tell you that there was something wrong with your budget as against the scope of the works that you wanted and we were open to reviewing

00:29:23 you wanted and we were open to reviewing the budget in fact we did review the budget

00:29:26 budget but in in june um once we carried out the pre-contract works and established the true scope we increased the budget at that stage uh in terms of the led better work i don't agree uh with your summary um

00:29:39 don't agree uh with your summary um what the reason that we didn't proceed with ledbetter was that they were it was the process that they'd gone through into in this the long and drawn out process of trying to get costs broken down so

00:29:51 of trying to get costs broken down so that we could understand the difference between artelia's estimates and ledbetter's costs but also their lack of direct experience of managing a project like this with residents in occupation why not simply just reduce the scape of

00:30:03 why not simply just reduce the scape of the works for the refurbishment and go out to tender again and make sure that your budget fitted what the market could bear because that would of course delay and and

00:30:13 and and for the reasons i've described we may not have had you know the market would have been depleted because we'd already invited people to go through an extensive process

00:30:23 process and why would they be it again now let's go to your day book or notebook right before we do can i just ask you to just deal with this squarely you say you recognize that there was a risk of a

00:30:35 recognize that there was a risk of a challenge

00:30:36 challenge would we be right to understand that you recognize that that risk of challenge arose from the fact that you were in breach of the oju procedure by talking to one

00:30:47 to one contractor um it was

00:30:54 it was it was i wouldn't say in breach i would say it didn't strictly comply with the letter of the the class of the process and right and i think this is uh you know so we did

00:31:06 i think this is uh you know so we did recognize there was a risk of doing this but felt that it was commercially the thing to

00:31:11 thing to to do all right thank you yes mr minute yes

00:31:15 yes well we'll come back to that answer shortly when we look at the trials advice if we may but can i just stick with the contemporaneous record for the moment can we look at your uh notebook please

00:31:26 can we look at your uh notebook please which i believe is notebook number five

00:31:30 tm0087978 and a page

00:31:37 uh if we can go to page three of that please at the the top

00:31:44 we can see an entry for the 17th of march

00:31:50 2014. you see that yeah and that's about an hra meeting just note the date of that if you would and if we go to page four uh we go to uh the next entry

00:32:04 which uh says on the left-hand side of the page

00:32:08 the page and i'm afraid it's come up long ways up but it says grenfell ryden you see that dg to arrange thank you dg to arrange meeting with

00:32:20 thank you dg to arrange meeting with studio e and planners subsequently and then it says kc tmo in a circle and then if we can switch it back to uh landscape it says telecom

00:32:31 uh landscape it says telecom 19th of march do you see that on the right-hand side of the page 19th of march

00:32:38 you see the date yes yes can we infer that the second page occurred between the 17th of march and the 19th of march in other words i've taken you between the 17th and the 19th of march

00:32:50 the 17th and the 19th of march we see everything in there that happened according to your own note there's nothing in there for the 18th of march i don't know

00:33:03 and looking at the top of page four

00:33:07 well we could see well would you accept this there's nothing in here on any of the pages i've shown you which comprises a note of the meeting of the 18th of march or indeed anything

00:33:18 indeed anything which points to that meeting even taking place

00:33:22 place um

00:33:30 i don't know well i'm asking you this is your

00:33:33 your contemporaneous note would you accept that there's nothing in this notebook which even hints at a meeting either was to take place or had taken

00:33:46 either was to take place or had taken place

00:33:46 place on the 18th of march i think it's it's possible that the note on the left hand side there is is from the meeting with ryden's well david gibson to arrange meeting

00:33:57 well david gibson to arrange meeting with studio e and planners subsequently what's that got to do with the meeting that took place on the 18th of march so far as we know what happened at it i assume that's a

00:34:08 what happened at it i assume that's a potential action from that meeting right are you assuming that well as i say i don't think that you know i think the work had been done between all both parties before the meeting and i think the

00:34:19 before the meeting and i think the meeting had very little to do right

00:34:25 would you take it from me looking at this document there's nothing in it which indicates that a a meeting on the 18th of march with ryden to discuss value engineering uh that was to take place or did take

00:34:37 uh that was to take place or did take place i'm i suspect that the note on the left-hand side of the page is the notes of those meetings i haven't written a date but if it's

00:34:48 i haven't written a date but if it's that seems that seems reasonable can you account for the fact that you yourself took no detailed notes of what was discussed at that meeting i think what was discussed at that

00:34:59 i think what was discussed at that meeting had been agreed in correspondence or the principles have been set out in the correspondence between david gibson and ryden you see mr madison

00:35:10 and ryden you see mr madison our site of your diaries and your notebooks indicates that you are a thorough and quite prolific taker of notes

00:35:19 notes about what was happening on the grenfell tower project and indeed other things within your remit there is a yawning gap for the 18th of march

00:35:28 march i wonder why that is i don't agree that i'm a prolific taker of notes uh what i do is i note action points from meetings so most of the most of the things i've got here are action points or aid

00:35:39 got here are action points or aid memoirs for me to do something in the in the future so i don't keep verbatim notes i just keep a note of action so if there are no actions there will be no notes

00:35:50 actions there will be no notes why is there no action for you to set up meeting or go to meeting on the 18th of march sorry i don't understand why is there no action note for you to set up a meeting

00:36:01 up a meeting or go to a meeting on the 18th of march well that would be i'm sorry i'm not i'm not

00:36:09 not what i wouldn't know necessarily not that it would either be noted in my diary

00:36:13 diary either possibly my electronic diary um and because that was that was the in in reality all of my appointments were put in the electronic diary

00:36:24 were put in the electronic diary my paper diaries were remembering to follow up the grenade memoir to follow up on on specifics i suspect this meeting on the left this on the left-hand side is the

00:36:35 on the left-hand side is the the meeting that we put as a backstop meeting for ryden and that that is the only action that has come out of it which is for david gibson to arrange a meeting with studio e you see your diary

00:36:47 studio e you see your diary well this notebook contains all kinds of things for example on the right-hand side

00:36:52 side set-up meeting what i'm really putting to you is

00:36:55 to you is we're asking you about is why there is complete silence about the even the existence of the meeting with ryden on the 18th of march i think if if i'd put the date the 18th

00:37:07 i think if if i'd put the date the 18th of march on the left-hand page there that would have been the and i don't know what was on the previous page well i showed you the previous page we can go back to interviews but this meeting you're implying this meeting was secret

00:37:18 you're implying this meeting was secret it isn't it's minuted in the executive team meeting subsequently i explained the dialogue is happening this wasn't improper this was about

00:37:29 improper this was about understanding principles that i could write in for a pre-contract agreement and that's exactly what we've done and i've been absolutely transparent about that we'll come to that later on the right hand side

00:37:40 right hand side it says under telecom 19th of march t and h what was that a reference to trouser hamlin now before i ask the following questions i just want to

00:37:51 i just want to give you a fair warning that i'm not asking you about the content of any legal advice that isn't mine to ask

00:37:59 ask and unless somebody tells you otherwise it isn't yours to answer just to be clear but tnh has trousers and hamline's uh and it it says in writing there advice agreement

00:38:12 advice agreement something like i'm afraid i can't read it rides to keep negotiating and contract

00:38:18 contract price confidential are you able to help us

00:38:21 us with what that says or means

00:38:27 i think this would this relates to the advice that they subsequently give in relation to the process that we went through

00:38:36 through post um post tender and pre contract um the date is of course after the date on which ryden had been notified that they were the preferred bidder wasn't it

00:38:47 the preferred bidder wasn't it i don't know the date of that we'll come to that

00:38:54 do you remember the discussion with trials and hamlin's on the 19th of march of which this is a record i clearly briefed trousers and hamlet and took advice and there's written response on that i

00:39:05 and there's written response on that i don't remember the exact date but that looks like a i've had the telephone conversation with trousers and hamlet at that point what does it say after the word agreement with with and rides is ryden

00:39:18 with with and rides is ryden i assume yeah

00:39:24 did ryden agree to make savings at the meeting

00:39:28 meeting no what did they agree they agreed to work with us on the basis of the pre-contract agreement that was the points of which were written into the board report that i

00:39:40 written into the board report that i presented to the board and agreed with the board

00:39:42 the board on the 27th of march can we go to art408632 please

00:39:54 this is the letter notifying ryden that it is the preferred bidder and you can see the date at the top 18th of march 2014 and i'll just show you a little bit of detail about it uh if you look at the

00:40:06 detail about it uh if you look at the addressee it's peter arnold at ryden and the title of the letter is notice of preferred bit of status enhancement and improvements to grenfell tower for kensington and chelsea tenant management organization and then

00:40:18 tenant management organization and then it says in large bold caps subject to agreement of boundary adjustments and formal approval from the board of directors of kctmo in the council and i'll just read you the first

00:40:29 and i'll just read you the first paragraph so you've got it firmly in your mind

00:40:31 your mind i would like formally to thank you for your tender for the enhancements and improvements to grenfell tower contract we have now concluded the tender evaluation process and we have been authorized by the kensington and chelsea tmo

00:40:42 tmo kctmo as employers agent for the above mentioned project to inform you that you are the preferred bidder and it is the intention of kctma to enter into contract with you subject to the agreement of the site boundary and formal approval from the kctmo board

00:40:54 and formal approval from the kctmo board and the royal borough of kensington and chelsea council rbkc and then it goes on about the arrangements and it says in the

00:41:06 arrangements and it says in the penultimate paragraph if you look at that kctma believes that its procurement arrangements are robust fair and transparent

00:41:15 if however during the standstill period legal proceedings are commenced against kctmo to challenge the proposed contract award we cannot progress beyond this letter

00:41:21 letter until those proceedings are resolved and then in the last paragraph it says at the end of the above mentioned standstill period we shall enter into discussions with you regarding the site boundary issue should

00:41:32 regarding the site boundary issue should a satisfactory agreement be reached and subject to the approval of kctmo and rbkc

00:41:38 rbkc the contract will be awarded to you

00:41:43 and then if you turn the page please it's signed by phil booth at artelia

00:41:52 now you can see as i've shown you that there is mention here of really two issues first of all the site boundary and secondly the approval of the board

00:42:03 and secondly the approval of the board and indeed our bkc as it seems there's no mention in this letter anywhere of the 18th of march meeting was there

00:42:10 was there no there's nobody mentioned in this letter of any uh discussions either past present or perspective about value engineering is there um well they were written into

00:42:23 is there um well they were written into the contract those provisions are written into the contract the contract being what the contract that would be awarded is so would have written into the employer's requirements

00:42:34 employer's requirements that they weren't in fact formalized until the end of october 2014 were they i don't remember the date right certainly there's no reference to agreeing to a value engineering

00:42:47 to agreeing to a value engineering process

00:42:48 process let alone a reduction from 9.2 million in this letter as a condition of the award is there it's not a condition of the award it's a it's a factor of the contract

00:43:00 it's a factor of the contract and it wasn't even a factor of the contract

00:43:03 contract that there should be any movement at all from ryden down from 9.2 million is that um that's why we took advice on this

00:43:15 um that's why we took advice on this but it's at this stage we there hadn't been any negotiation so therefore we couldn't really we couldn't um it wouldn't be reflected in

00:43:23 in the this in this award there's no mention in this letter that the the award of the contract when it came

00:43:32 it came as opposed to notification of winning status

00:43:36 status was in any way conditional upon an agreed

00:43:40 agreed value engineering

00:43:45 that's not my understanding well where is it in the letter it's not in the letter

00:43:48 letter it's in the contract it's not in the letter why was there no reference referencing the letter to a condition

00:43:56 condition that they would get the contract only if they were to agree a value-engineered new lower price there wasn't only f so the principle that we were establishing here

00:44:08 that we were establishing here was to say to the contractor there were certain elements that needed to be clarified in terms of materials planning boundaries in the interface with the calc project for example

00:44:21 calc project for example and the pre entry into so at this at this stage we're entering into a pre-contract agreement that would allow us

00:44:27 us to quantify and evaluate those issues at which point we can make a decision to either award the contract or go back out to

00:44:38 award the contract or go back out to tender

00:44:39 tender so this at this stage we were entering into a pre-contract phase where we could clarify

00:44:45 clarify these issues and that's what we did there's no reference in the award letter to making it a condition that you would enter into a pre-contract

00:44:56 that you would enter into a pre-contract on satisfactory terms as to value engineering is there um i don't know

00:45:01 know well there isn't is there i don't know well it's not in the letter is it it's got to read the letter in full and then answer my question i don't i didn't write the letter this was artelia's letter too um so they're acting as our agents on

00:45:14 um so they're acting as our agents on this so they've written this letter so what i was but what we had done before in relation to this was to agree the principles of a pre-contract agreement and that's what we were doing

00:45:26 agreement and that's what we were doing yes you've explained that i just want to do you give instructions to artelia to send this letter no do you know who did no do you know how it came about that artelia thought it

00:45:37 it came about that artelia thought it it was it was the letter ready to go when they sent it no you can't help us with who it was who told artelia to send the letter in its final form i don't

00:45:51 can we look at another notice art402224 this one is to mulally one of the other bidders who are unsuccessful

00:46:03 uh and um is this a letter you've seen before do you think no do you know who

00:46:09 who authorized artelia to send this letter no

00:46:13 no take it from me that there's no reference in this letter to any discussions that ryden was having about reducing its price either as a matter of general approach or

00:46:24 or general understanding why is that this was a notification of the outcome of the process that um mulally uh had been involved in to

00:46:35 um mulally uh had been involved in to that point and it was flagging up that process and um it's a standard part of the orgy process yes

00:46:47 of the orgy process yes i take it that you never and no one else at the tmo ever sought to have the same sort of discussions that you were having with ryden with mullally would that be right it was quite clear in the advice from travis

00:46:59 in the advice from travis that that wouldn't be appropriate uh can we go to art408755

00:47:10 we go to art408755 this is the email sent by peter blythe of artelia to peter arnold ryden at 5 55 pm you see that on the evening of the 18th of march 2014

00:47:22 of march 2014 and the subject is grenfell tower notice of tender result and the uh attachment is a a letter and we can see that uh claire williams

00:47:33 and we can see that uh claire williams is copied as is jenny jackson you're not copied in on this and it says dear peter please find attached the notice of tender result for the works of grenfell tower um it appears from the timing of this

00:47:46 um it appears from the timing of this email that ryden were notified that they were the preferred bidder only after the meeting that the tmo had with ryden that day about value engineering their price

00:48:00 is that right um i don't know that the two are linked but um i can see that it's on the same day will you say that you don't know that the two are linked just in general terms

00:48:12 the two are linked just in general terms why did the letter telling ryden that they were the preferred bid or not could go before

00:48:17 go before the 18th of march i don't know is it possibly because you the tmo could not decide to tell ryden that they were the winner until you've had the meeting that you did have

00:48:29 you've had the meeting that you did have on the 18th of march i don't recall you don't recall was the selection of ryden held back until the tmo was sure that ryden would reduce their price this wasn't the bad reason price this is

00:48:40 this wasn't the bad reason price this is about agreeing a process

00:48:44 this wasn't about reducing the price well if it wasn't about reducing the price what was it about it was about agreeing the process for a pre-contract agreement it would allow us to to clarify price and at which point we could make a decision about whether to proceed

00:48:56 about whether to proceed or whether to go back out to tender you say it was about process as opposed to price which is the opposition i think you're inviting the chairman to draw can you explain what you mean by process

00:49:07 explain what you mean by process so the process here was that we needed to get an approval from uh from board because of the value of the works uh we also need to get approval from the cabinet in the council because of the

00:49:17 of the joint funded nature of the of the project

00:49:21 project so in order to move this forward what we needed to do was to clarify a process that could be to keep the process moving and clarify price and once we've got a

00:49:34 clarify price and once we've got a clarity about that price we could then enter into contract so that's why we entered into a pre-contract agreement with ryden's to progress the development of the planning permission and therefore and

00:49:45 planning permission and therefore and consequently the cost of significant aspects but also the interface of the project with the neighboring calc project which had some significant challenges

00:49:56 significant challenges and so there were two pieces of work that needed to be clarified and they were

00:49:59 were written into the board report that was presented to the board on the 27th of march

00:50:03 march are you telling us that there was no discussion at all at the 18th of march meeting about specific figures the figures as we saw last week was there was a schedule of figures

00:50:14 week was there was a schedule of figures to give some context as to the sort of scale and the sort of issues that we were looking for the majority of those were already priced within the the ryden's tender there was 270 000

00:50:25 the the ryden's tender there was 270 000 pounds further saving that we wanted to understand in principle where the riders thought they could work with us post contract to to to all we could or alternatively we

00:50:38 to all we could or alternatively we could

00:50:38 could increase the budget and in reality we ended up increasing the budget

00:50:45 so there was some discussion at the meeting

00:50:48 meeting of the scheduler figures the david gibson simple spreadsheet we looked at last week

00:50:53 last week i don't recall that being one at the meeting i think the dialogue had happened

00:50:56 happened in the exchange of emails in between at the meeting do you remember looking at

00:51:04 at documents with figures on them i don't now mr blake said in his oral evidence that to write and gave no assurances at the meeting of the 18th of march

00:51:15 the meeting of the 18th of march do you agree with him i don't remember the meeting to be honest and i can see that the exchange between the two parties i can remember

00:51:26 two parties i can remember having a meeting in in the diary because i knew there was a deadline i needed to a very tight deadline to get this

00:51:33 this this report to our board and get the process moving and and that's that's that's what i recall

00:51:42 recall now you said this morning a number of times and you also said it on thursday and just for your note well actually i'll take you to it um but you said that the tmo had taken

00:51:54 um but you said that the tmo had taken legal advice uh let's look at day 58 page 201 please you said it also this morning a number of times but it's simpler just to show you what you said on thursday and

00:52:07 show you what you said on thursday and at page 201 i'd like you to go to line 19

00:52:12 19 and the question was did you think at the time that by telling ryden that their price was in first place in their presentation and documentation was in first place was improper in the sense that it wasn't compliant with the rules on public

00:52:23 compliant with the rules on public procurement for public works answer i wouldn't call it improper i would say that it did factor in some potential risks of challenge within let me just go over the page please eu procurement rules

00:52:35 please eu procurement rules however we took legal advice on that the advice was not that it was illegal or improper it advised us that there were particular risks and those are commercial risks that we might want to consider in order

00:52:47 that we might want to consider in order in the situation that we found ourselves in

00:52:51 in i just want to have that in your mind very firmly when i show you what i'm going to show you next but before i do can i ask you whose idea was it do you recall to take legal

00:53:02 was it do you recall to take legal advice

00:53:03 advice on eu procurement rules um there was a i think jenny jackson and um there was a dialogue between jen jackson and artelia on this matter

00:53:14 jackson and artelia on this matter and i think jenny jackson got some initial advice from trousers and hamlet i see and i took

00:53:20 took advice later in relation to the approach that was being proposed in the board report i see so do i take it from that you weren't

00:53:31 weren't involved in the initial decision to instruct

00:53:34 instruct trowers and hamline's i probably was had a conversation with jenny jackson i would imagine do you remember what she said to you um i remember having a conversation very much along the lines of what i've described in terms of um let's

00:53:47 what i've described in terms of um let's see if we can do a bit better do you remember whether she came to you and said i think we need to take legal advice or did you tell her that you thought you needed to take legal advice i can't remember

00:53:59 take legal advice i can't remember but jenny was a very competent and very experienced procurement person and i would have trusted her to get the appropriate advice did you play any part in the giving of the instructions to

00:54:10 in the giving of the instructions to trials and handlings not that i remember now right now that's the first

00:54:14 the first the first one i did the second do you remember

00:54:18 remember what it was that you thought you thought necessitated the taking of legal advice which one the first or the second early let's let's start with what you've called the first

00:54:30 called the first so we had a um early when the tenders were issued for the project we hadn't been issued a pretender estimate at that stage and

00:54:41 pretender estimate at that stage and bearing in mind that this contract included

00:54:43 included works that were included in the calc project so that would have inflated the price

00:54:48 price so we but we recognized that there was potentially a gap between the value of works that have been put out in the current available budget and so the professional team did some work to scope out

00:55:00 work to scope out um those

00:55:04 to scope out those potent areas of potential

00:55:07 potential saving within the scope of works and um so i think as part of that

00:55:16 so you know i think the team and jenny in particular would have been aware that we were going to have to consider our options when the tenders arrived

00:55:26 i see so you you think that it was jenny's identification of the gap you've just identified which meant that you had to take legal advice yes because we had a gap between the

00:55:37 yes because we had a gap between the budget now our options are either to increase the budget or to work with it with the preferred contractor in contract

00:55:46 contract to um to to value engineering the scheme closer to the budget

00:55:54 but also there were elements within the scheme that hadn't we didn't have fixed price for because the planning permission had not been that the conditions haven't been met yet yes i understand can we then go to art406433 please

00:56:08 can we then go to art406433 please this is an email chain on the second and third of march 2014.

00:56:14 this is about a week or so before uh the uh five days i'll say before perhaps the

00:56:22 the uh tender interviews so the tender process just for chronology's sake was still continuing uh now you're not copied in on these emails but david gibson and claire williams are

00:56:35 david gibson and claire williams are and uh if i go to the second page please in that email run we can see that here is an email from jenny jackson dated the 2nd of march 2014 to phil

00:56:47 dated the 2nd of march 2014 to phil booth simon cash claire williams and peter blythe copy to david gibson now you're not copied in so let's see how we go but just looking at it do you think it's an email that you saw at the time

00:56:58 time no i don't think so well let's let's look at it it says um please can we discuss how we intend to bridge the gap between the 9.249 294

00:57:09 between the 9.249 294 tender submitted and the 8.5 million client budget now just pausing there the 9.2 odd million pound tender is the ride and tender isn't it yes yeah so the gap that uh the subject

00:57:22 yes yeah so the gap that uh the subject of her focus at this time is the the gap between the ride and tender and the 8.5 million

00:57:28 million client budget not anybody else's gap yes

00:57:36 the advice obtained from trials and hamline's is clear and i'll just show it to you kctmo has advertised the contract as a restricted procedure based on an estimated contract value of 8 million to

00:57:48 estimated contract value of 8 million to 10 million pounds tenders are required to submit a price for undertaking the program and kctmo is required to assess the tenders based on the price stroke quality criteria you have set out in the tender documents

00:57:59 tender documents the restricted procedure does not permit a contracting authority to undertake negotiations with the tenderers prior to contract award and does not provide for the contracting authority to revise the tender document

00:58:10 tender document or for tenderers to submit revised best and final offers to do so would be a breach of the eu regulations even if you allowed all the tenderers to renegotiate their prices your only eu compliant options are to

00:58:22 your only eu compliant options are to assess the tenders and award the contract to the tender tenderer who scored the highest based on your

00:58:28 your price stroke quality criteria or not to award the contract and run a new procurement exercise if the contract allows it you may run value engineering exercises with your

00:58:40 value engineering exercises with your selected tenderer but only once the contract has been entered into you see that yes and

00:58:50 yes and we'll come to the last paragraph of her own email which is her opinion jenny as jenny jackson's opinion in a moment

00:59:03 in a moment was it just looking at the first paragraph the gap between the ride and bid and the client budget

00:59:12 was just looking at that something that told us that it was a foregone conclusion that if the contract was to be awarded at all it would go to ryden as the lowest bidder

00:59:24 i think is not as the lowest bidder i think is part of the the appropriate price quality evaluation that was the model that was put there that was the only option right in this process that's

00:59:35 only option right in this process that's what the advice is do you know what the point of having the interviews would have been in those circumstances the interviews was part

00:59:45 was part was a was was the final part of a quality submission so the quality submission scored scored each contractor out of 100 and

00:59:56 scored each contractor out of 100 and the

00:59:57 the tender process was the sorry the the interview

01:00:01 interview process was the final part of that it was a five percent score a key part of that uh the reason for that

01:00:09 that was to engage with stakeholders and we particularly wanted residents to be involved in those interviews and give them the opportunity to meet potential contractors and in the event we ended up with a

01:00:21 and in the event we ended up with a resident board member and a local ward councillor attending those interviews and we needed to complete that as part of that

01:00:30 of that quality evaluation i mean at this point is it fair to say that it was ryden or nothing

01:00:37 nothing at that point ryden we'd had an interim report from artelia i remember and um so

01:00:47 and um so irrespective of the outcome of the scoring of the uh the interview ryden were going to be in first place even if they'd scored nothing and the others had scored full marks jenny jackson was particularly wary of

01:01:01 jenny jackson was particularly wary of interviews because of the unwritten nature of them and she felt that for transparency's sake it was much safer to keep as much in written form than rather than in

01:01:14 in written form than rather than in missing form what would the residents who had

01:01:18 who had formed part or were to form part of the interview process have had to come up with in order to get the tmo to think about somebody other than ryden well

01:01:32 i mean the eog process doesn't really allow a great deal of choice it's a very clear and open process that you need to that needs to be followed so we put open advertised people apply

01:01:43 advertised people apply and there are various various

01:01:50 evaluations so uh i mean i i wasn't part of this process saved for the very last part of the the interview um

01:02:01 part of the the interview um but um but i read the tender report that explained quite what had been evaluated through that process and it looked it was about looking at the price not just in terms of the

01:02:12 the price not just in terms of the actual cost but in terms of its variance in terms of the various elements that have been priced within it and it looked at experience in a

01:02:23 and it looked at experience in a wide range of other issues i'm just trying to get a feel for what it would be that the residents would have to say at the interviews or tell you after the interviews that would make all the difference well nobody can make that different that

01:02:35 well nobody can make that different that that decision i mean the option is to run through the process that's been defined at the very outset and evaluate an award on that basis or start again on a different basis now let's say the

01:02:46 on a different basis now let's say the process wasn't about giving a choice to say i like this one and not that one it was about being part of that process and seeing and obviously people had concerns we would look at trying to address those concerns now let's

01:02:58 concerns now let's look at the second paragraph uh

01:03:06 she johnny jackson says the advice obtained from trials and hamline's is clear

01:03:11 clear now you weren't copied in on this email chain at the time but did you know the gist of this advice at this point yes i remember having a conversation with jenny jackson about it and was there anything about the advice

01:03:22 and was there anything about the advice that you didn't understand at that time no no no your discussions with ryden about

01:03:33 no no your discussions with ryden about reductions from their bid price or even just about process as you as you put it before the contract was awarded on the evening of the 18th of march 2014 as we've seen

01:03:44 we've seen was wholly contrary to trauer's advice wasn't it

01:03:49 wasn't it um no it was working within the boundaries of the second part of their advice

01:03:53 advice so where they say that our only compliant options are to assess the 10 doesn't award the contract to the tender tenderer who's got the highest based on the criteria so that's what we were looking to do

01:04:05 so that's what we were looking to do however if this but we recognized if i i would i was in a challenging position here because we had a budget um sort of of one figure and a

01:04:19 um sort of of one figure and a potential cost of a program at more than that so i was in a difficult position of trying to get a board approval for that without doing some work

01:04:27 some work to actually firm up what the price actually was so that's what we looked to do is to establish the principle that ryden would work with us on that

01:04:35 on that otherwise we'd have to go back out to tender that would be the only route open to us mr madison here's a study shall we the second paragraph of the advice itself which is

01:04:46 paragraph of the advice itself which is in the slightly smaller type in the email the advice is your only eu compliant options are to assess the tenders

01:04:54 tenders and award the contract to the tenderer who scored the highest based on your price straight quality criteria or not to award the contract and run a new procurement exercise

01:05:06 procurement exercise do you accept that your discussions with ryden

01:05:11 ryden were contrary to that advice no i don't i think it's comp i think it's it's it works within the bounds of that com advice and we took further advice from trowers after

01:05:22 took further advice from trowers after being through this process uh to stop to to check that that was appropriate well let's look at the sentence i've just read to you you've been given two choices

01:05:33 choices clearly discussions with ryden isn't part of the second choice which is about not awarding the contract are you telling us that you read the advice from travis to say that discussions with ryden

01:05:46 to say that discussions with ryden prior to the notification that they were the winner fell within the expression tenderer who scored the highest based on your price straight quality criteria

01:05:58 your price straight quality criteria yes how could you possibly have understood that price stroke quality criteria was something

01:06:06 something which had anything to do with the discussions that you were having which of course came in after their bid so we'd had a we've had a discussion on price well there'd been a there's been a

01:06:18 well there'd been a there's been a thorough process to establish a preferred contractor through the price quality analysis and we had a preferred bidder um we were in a position where we

01:06:29 bidder um we were in a position where we we weren't in a position to let a contract because we hadn't been through the standstill period but um what i think it was what

01:06:40 i think it was what was clear was that we needed to establish whether the preferred bidder would be would be amenable to working through the pre-contract the terms of

01:06:51 through the pre-contract the terms of that we would set out in the pre-contract agreement to establish whether or not we we could go into contract with them at all

01:06:58 all but mr madison this advice is telling you

01:07:01 you that you can award the contract to the tenderer who scored the highest based on your price quality criteria that's a reference to the formal tender isn't it

01:07:10 isn't it it's clearly not a reference to offline discussions with one of the tenderers that was it the offline discussion was established in the principle of the pre-contract agreement and the board approval

01:07:21 agreement and the board approval it wasn't related to negotiation of the contract sum

01:07:25 so in a sense one could say exactly the discussions you were having with ryden had nothing to do with scoring the highest based on the price quality criteria

01:07:37 price quality criteria they were wholly outside that exercise weren't they no they were in the context of that exercise if they were in the context of that exercise they they would also have been offered to the other bidders to make it fair

01:07:48 to the other bidders to make it fair and transparent it's quite clear in travis advice that that isn't appropriate

01:07:55 mr madison i'm going to suggest to you that you knew very well what this very clear advice was telling you and you and others at the tmo chose to do the contrary that

01:08:06 chose to do the contrary that i don't agree with that there's a clear there's a clear and transparent route from this advice through my board report through the report of the executive team and

01:08:17 and to the advice that was taken from trowers

01:08:20 trowers prior to the board report that explains that is completely transparent and above board

01:08:26 board it did have some risks attached to it commercial risk of challenge but that was addressed as well in the trowers advice the second piece of travis advice if it was all transparent and completely

01:08:37 if it was all transparent and completely above board can you please explain to us why

01:08:39 why there's not a single written record of the 18th of march meeting and no reference to these discussions in even in the letter you sent to ryden notifying them that they were the winner

01:08:50 notifying them that they were the winner there's a clear dialogue in the emails between david gibson and stephen blake about what exactly was going on in that in that moment

01:09:03 i think it's right that you never gave any other bit of the opportunity to consider

01:09:08 consider value engineering did you the we could the only open the only way forward open to us here was with through the preferred bidder alternatively we needed to go back out

01:09:19 alternatively we needed to go back out to tender

01:09:24 can you please answer my question you never gave any other bidder the opportunity to consider value engineering did you i didn't do that because the

01:09:35 did you i didn't do that because the advice from trowers was that that wasn't a possible route through this procurement route

01:09:46 and if you're going to reduce the scope or deliver a different scope or reduce the price of one of the bidders

01:09:53 bidders prior to the award then it would be unfair on all the potential bidders wouldn't it the other bidders because they wouldn't have the same opportunity to talk to you about what

01:10:05 opportunity to talk to you about what they could do the travis advice is clear that the only option was to go with the preferred beta or to go back out to tender as well we can see what it says tendra who scored the highest based on your

01:10:16 who scored the highest based on your price quality criteria or go back out to tender

01:10:19 tender and as i put to you before i'll put it once more there's absolutely nothing in here which blessed your approach which was to talk to ryden as the lowest bidder to see if they would come down further

01:10:30 further we didn't talk to them to establish they come down further what we did was we proposed we we were looking to agree the principles of a pre-contract agreement which will

01:10:42 of a pre-contract agreement which will clarify the price at which point our options were to either increase the budget

01:10:47 budget or go back out to tender

01:10:50 in reality what we did is increase the budget once those costs were clarified now

01:10:58 now we've been unable to see anything in your witness statement about these pre-award discussions that you had with ryden even in the witness statement that you provided to the inquiry in the june of this year

01:11:09 this year why was that to be honest i couldn't until very recently i'd forgotten about this dialogue entirely it's um

01:11:18 it's um it was quite difficult to remember exactly what happened at this point is it because you knew that these sorts of discussions were

01:11:30 of discussions were in breach of eu procurement law as advised to you by trials and hamline's in the advice we've just seen and that's why you wanted to keep it quiet i wasn't trying to keep anything

01:11:41 quiet i wasn't trying to keep anything quiet i'm here to give you metrics mr gibson was asked the same question as i've just asked you and he told us that he'd been advised that it was better not to explain

01:11:52 was better not to explain these discussions in a witness statement but to save it up for his oral examination are you in the same position as him no i haven't had a conversation

01:12:03 when did you first realize that the discussions that you were having with ryden prior to and on the 18th of march about even as you would put it the approach

01:12:16 approach were matters uh which might be investigated in this inquiry um i don't remember very recently i think in the last few weeks right did you

01:12:27 weeks right did you not listen to the evidence of anybody from ryden such as mr blake in july or read the transcript so on the so on the back of some of the evidence that has come through the um

01:12:38 that has come through the um through the inquiry it's it's reminded me of this is this issue it hadn't really occurred to me as being the significant issue at the time that i was preparing my initial statement right when you answered my question at the

01:12:49 when you answered my question at the beginning of your evidence that your witness statement has represented a full and candid account however one might characterize them they don't represent a candid account of these discussions do they

01:13:00 these discussions do they as i say i i didn't even remember these discussions at the time i was right yes do you realize or have you ever realized that as an officer of a public authority exercising

01:13:11 officer of a public authority exercising public functions you owe a duty of candor and particularly a duty of candida to this inquiry

01:13:16 inquiry absolutely and that's why i'm here right and did you realize that the purposes of your giving evidence was to assist it in its

01:13:22 its in its uh in its functions absolutely do you accept that by not coming clean about these discussions in any of your statements even as recently as june this year

01:13:33 year or even as recently as before you went into the witness box you failed in that duty i don't agree i think that i've i as i say i didn't remember the detail of this of this um this particular

01:13:46 um this particular this particular moment um i don't have any i'm certainly not trying to withhold anything and i think there's quite a clear transparent um

01:13:58 transparent um timeline and um order trail through this that where you can see that i've reported to board and to executive team exactly what i've been doing

01:14:07 doing and i think it's very clear and my my witness statement can only cover a certain amount of information it would be this is this

01:14:18 information it would be this is this this project spans something like five years of my work experience and there's an awful lot of detail in there mr blake gave evidence at the end of july

01:14:26 july and mr maynard gave the evidence for ryden at the very beginning of september this year some nine as eight weeks ago or so can

01:14:39 some nine as eight weeks ago or so can you explain why even in that period of time you haven't provided a further witness statement

01:14:44 statement giving your side of the story in relation to these discussions but have left it up for me to ask you questions about

01:14:50 about um i haven't been advised to give any further

01:14:54 further information at this stage you haven't been advised to give any further information i hadn't been i haven't i've been taking the advice of my solicitors i don't want to know about what advice you've had

01:15:06 what advice you've had can i can i just ask you whether the existence of the attorney general's undertaking has played any part in your thinking

01:15:13 thinking um so i don't understand the question let's move on can we go to uh the minutes of the tmo board meeting on the 27th of march 2014 tmo10031040 please

01:15:38 2014 tmo10031040 please mr chairman i've just been reminded um it's 11 17 and there's probably an appropriate time for a break and i am going to just do the next questions

01:15:49 going to just do the next questions really follow up the questions you've just been putting to the witness well they go on they go to what they do yes well that's what i thought how long they'd like you to do well we're going to go to

01:16:02 it's about 10 minutes i suppose well it might be better than to stop yeah if that's convenient yes yep we're going to have a short break mr madison um we'll come back at 25 to

01:16:14 um we'll come back at 25 to uh 12 and we'll uh resume then and when you're out of the room please don't talk to anyone about your evidence or anything to do with it thank you all right thank you you'd like to give the usher

01:16:36 25 to 12 please

01:35:44 yes would you ask mr madison to come back in please

01:35:59 all right mr madison yes ready to carry on yes mr millet yes mr chairman um can i ask you please to go to day 28 page 171

01:36:11 please to go to day 28 page 171 first of all

01:36:22 this is the evidence of steve blake of ryden and if we look at um line seven uh i ask him do you recall what was discussed at that meeting and

01:36:33 what was discussed at that meeting and this is a

01:36:34 this is a the meeting of the 18th of march 2014. answer not specifically no i don't question in general answer went through the need to find a significant amount of savings yeah for the scheme to meet their budget

01:36:47 the scheme to meet their budget do you accept that

01:36:50 sorry do i accept you accept mr blake's evidence there that at the meeting you all went through the need to find a significant amount of savings for the scheme to meet the tma's budget that's i think that's

01:37:01 the tma's budget that's i think that's his interpretation of what we were doing what we were actually doing was establishing the principles needed for a pre-contract agreement well maybe nothing between us on that

01:37:12 well maybe nothing between us on that but but his words are you went through this is what actually happened you went at the meeting you went through the need to find a significant amount of savings for the scheme to meet their budget

01:37:23 for the scheme to meet their budget did you do that no and he also says he didn't specifically remember the meeting what was discussed at the meeting so i think that's probably an assumption on his part of what he discussed what i discussed

01:37:34 discussed but i was very clear at that time what we were doing which was trying to agree the terms of a pre-contract agreement uh in accordance with the advice that we'd taken from trouser and hamline yes you've um

01:37:48 you've um pointed out in the line before that i showed you that he has no specific recollection as a comment but i want your recollection do you agree or do you disagree with mr blake's recollection that at the meeting

01:38:01 blake's recollection that at the meeting as a matter of fact you went through the need to find a significant amount of savings for the scheme to meet the tma's budget

01:38:07 budget so what i think he means by that is what i've described earlier is that within the contract there were a couple of significant

01:38:18 there were a couple of significant elements that hadn't been fully priced in relation to the cladding into the windows and also there was an issue regarding the public realm work and the interface between the grenfell

01:38:29 between the grenfell tower project and the calc project which needed to be established mr madison i'm going to cut you off because i wasn't asking you to interpret the transcript and give me your opinion of his evidence what i want is something

01:38:41 of his evidence what i want is something different

01:38:42 different please which is your recollection of what actually happened at that meeting here we have on the page mr blake's recollection and i've put it to you twice now i'm simply asking you whether his

01:38:54 simply asking you whether his recollection is the same as yours is he right or is he wrong he's wrong the what we discussed what we discussed at that meeting was what was detailed in the

01:39:06 was what was detailed in the dialogue between the two parties in the run-up to the meeting the meeting was there as a backstop in case i needed any last minute information before my board deadline so the meeting was there as a backstop

01:39:18 so the meeting was there as a backstop it wasn't about negotiation it was about being clear about the process and understanding that we were all on the same page in terms of what in principle

01:39:28 principle was the way forward can i ask you to go to ryd403302 please this is an email we've seen before we looked at it on thursday

01:39:40 looked at it on thursday and uh

01:39:54 and uh uh yes and and uh at um

01:40:00 if we look at the third one down if we look at page one to the over the page to sorry page two over the top of the page to page three please i just want to look at one of the earlier emails in this run

01:40:17 this is david gibson and his email on the 13th of march 2 to steve blake and it's the one in which he introduces himself

01:40:29 he introduces himself and in the last two paragraphs he says can you also confirm if you can make a meeting on monday afternoon with peter myself and claire williams the project manager for the scheme at our offices and then he says it might

01:40:41 at our offices and then he says it might be useful if you can bring your estimator

01:40:43 estimator also now that in fact did happen wasn't it do you remember that ryden did bring their estimator i don't remember no no do you remember or can you tell us

01:40:54 no do you remember or can you tell us what the purpose of david gibson asking ryden to bring ryden's estimator was if at that meeting you are not going to discuss precise figures

01:41:05 figures i guess you just wanted somebody there who could discuss figures you know the principles of what we were discussing in the dialogue that we'd had and if all you were going to have was a discussion

01:41:16 were going to have was a discussion about a general approach as you told us a number of times this morning there would have been no point in david gibson asking steve blake to bring

01:41:25 bring his estimator along with that i don't know i don't know why david put that i think that was probably just david's way of thinking how he would like to approach this discussion do you remember that

01:41:37 this discussion do you remember that ryden did bring their estimator a lady called

01:41:41 called katie bachelier to the 18th of march meeting i don't remember i don't remember the meeting specifically

01:41:49 and this meeting wasn't set up was it simply to discuss general approaches this meeting was set up to discuss particular figures in the spreadsheet david gibson was sending and ryden's estimator's view of them in

01:42:01 and ryden's estimator's view of them in order to be able to discuss as precisely as possible what the reductions from 9.2 million could be now those those figures were were to set the context of the sort of scale

01:42:12 of scale and the challenge that uh was that was facing us and to us so that ryden could understand the context of that conversation um if it was a negotiation of any nature we would have had the quantity surveyor there um so artelia

01:42:25 quantity surveyor there um so artelia would have been invited but this that wasn't the purpose of this meeting this was about establish a path through the governance of the scheme it wasn't about the um it wasn't about negotiation with of the price with ryden

01:42:37 negotiation with of the price with ryden did you ever get did you ever ask artelia to look at david gibson's simple spreadsheet to make sure that what he was asking for from ryden was in line with what you're with what their quantity surveyor would

01:42:49 with what their quantity surveyor would think my assumption is that they put that together you know assumption but you don't know that well

01:42:55 that well they were the quantity surveyors for the scheme they produced the pretender estimate and they uh identified that the pretender estimate was greater than the budget and started a process

01:43:06 a process of pulling together ideas from within the professional team as to how how savings could be made to bring the scheme within budget and what those options were so i'll tell you led that process as i

01:43:18 so i'll tell you led that process as i remember we don't see artelia copied in on any of the emails which arranges or which are arranged the meeting of the 18th of march or any email which sends the spreadsheet

01:43:29 or any email which sends the spreadsheet do we

01:43:30 do we no and that's because it wasn't a negotiation on price because i'll tell you would have to be there for that because they are managing that budget this was a discussion about governance and how we could get an approval through our board

01:43:40 our board to move the project forward to the best of your recollection did artelia even know that this meeting was taking place i think in the email we saw earlier between jenny jackson and simon cash they made reference to an offline

01:43:52 they made reference to an offline conversation i think that's exactly what this was uh that's a slightly oblique way of answering my question

01:44:01 question i'll try it again did artelia know that the meeting on the 18th of march was to happen i don't know that they knew specifically there was a meeting i think they knew

01:44:12 there was a meeting i think they knew there was going to be a dialogue between the client and ryden in relation to um pretender the principles of a pretender agreement that we could get through

01:44:23 through to our board for approval you never kept artely in the loop with your ongoing discussions with ryden between the 11th of march as we've seen and the 18th of march did you i don't

01:44:34 and the 18th of march did you i don't remember

01:44:35 remember no um let's go to the tmo board meeting on the 27th of march 2014.

01:44:42 2014. can we go please to tm01003 104

01:44:52 and i'd like you to look please first of all that first page this is the tmo board meeting on that day part b and we can see who was present there a long list of

01:45:03 list of board members and we can see that under the list of those in attendance you were there weren't you yes

01:45:10 and if we turn please to page we can see that you cover the issue of grenfell tower refurbishment

01:45:22 of grenfell tower refurbishment and i'll just show it to you peter madison gave a progress report on the evaluation of the three tenders which had been received for this project on both price and quality

01:45:34 and quality rydens was the preferred contractor and because there was a very tight perimeter on costs we would work with them on the detail of their tender in addition there was some further work to be done on the planning permissions and the type of materials and cladding

01:45:45 and the type of materials and cladding in order to contain costs there would also be further work on energy and it would hope to attract some funding and then it goes on when these two pieces of work were completed it was hoped to carry out the contract

01:45:57 it was hoped to carry out the contract within budget it was recommended that we enter into a pre-contract arrangement with ryden's in order to progress the project i'm just pausing there there's no reference there is there to

01:46:08 there's no reference there is there to the discussions that you've had with writing

01:46:10 writing about even the approach as you would put it before the award of the contractor ryden or at least before they were notified that they were the winner of the tender it doesn't specifically talk about

01:46:22 it doesn't specifically talk about that dialogue but the um the report that was presented to the board here specifically refers to the parameters of the pre-contract agreement which is what i was looking

01:46:33 agreement which is what i was looking for

01:46:34 for to be agreed i did certainly talk to the executive team when i presented the draft report to them about this point and that was ministers of that meeting

01:46:47 so there's another meeting is there with the executive team there are minutes where you tell you you talk about the pre-award discussions with ryden is that right it just talks about the the offline

01:46:58 the offline conversation to establish the principles yes

01:47:01 yes but i think you accept what i am putting to you which is that there's nothing here which tells the tmo board that there have been these pre-op

01:47:12 that there have been these pre-op notification discussions with ryden that's a level of detail that i wouldn't normally put into a board report right um

01:47:23 right um let's look at the paper that we have that uh you presented

01:47:31 it's tmo1 triple zero five five eight three please

01:47:45 and this is a document headed recommendation to know the outcome of the grenfell tower procurement and to agree the appointment of the preferred contractor

01:47:56 preferred contractor and you could see a big box which says purpose

01:47:59 purpose and item 1.2 agrees to appoint ryden construction limited as the preferred contractor for the project see that yes and let's just run through it could before i do can i just ask you

01:48:10 it could before i do can i just ask you is this your document did you author this

01:48:12 this yes you did and then we have background 2.1

01:48:15 2.1 on 8th of january 2013 board agreed to proceed with the procurement of the grenfell tower project with an agreed budget of 9.7 million pounds this budget has been agreed by rbc cabinet and then under 2.2 you can see

01:48:28 cabinet and then under 2.2 you can see the proposed scope of works includes and under the second bullet point the thermal external cladding of the building and then if we turn the page please to page two it works on down

01:48:40 two it works on down planning approval 10th of january 2014 and then the project team and the project team's procurement you see that

01:48:49 see that procured through the iesi framework and then over the page if you go please to page six i think having looked through this and the rest of it is detail about the

01:49:00 of it is detail about the tender process if we just look quickly through that and then we go to paragraph three or section three at the very bottom of page six financial implications and pre-contract activities and then if you go to page seven let's

01:49:13 and then if you go to page seven let's look at paragraph 3.2 some further work is required to firm up the scope of scope of i'm so sorry firm up the scope of works and design and arrive at a fixed cost for the contract specific activities include

01:49:26 contract specific activities include clarify the site boundaries detailed design

01:49:29 design energy funding it is recommended that the board agrees that we enter into a pre-contract agreement with ryden up to a value of 350 000 pounds to progress these activities in the coming weeks when the financial

01:49:40 coming weeks when the financial implications of these activities are clear it is recommended that the board agrees to enter into a contract write in construction limited for the refurbishment of grenfell tower with a total cost of the project of 9.7 million pounds inclusive of fees

01:49:52 pounds inclusive of fees if the final price of the contract is above 9.7 million pounds further approval would be required from our bkc cabinet if required this would be sought

01:49:59 be sought in june 2014. now i've shown you i think pretty much all of this document other than the parts in the middle about the details of the tender there's nothing in there is there about

01:50:11 there's nothing in there is there about the existence of these pre-award discussions that you'd had with ryden

01:50:16 nothing mentions specifically the discussions but the points that i'm raising there are exactly the things that were clarified in the pre uh in that discussion with ryden

01:50:28 uh in that discussion with ryden there's nothing in here about your decision to take a risk of challenged by the other bidders by having those discussions with ryden is there

01:50:37 there [Music]

01:50:45 i don't remember if it was covered in this report it was covered in the it was certainly covered in the minutes of the executive team meeting

01:50:54 you say that

01:50:57 before we leave we'll come back to that in a moment but but before we leave this this meeting which is the board meeting can we take it we've seen both documents that neither your report nor

01:51:09 documents that neither your report nor the minute of the meeting make any suggestion let alone state in terms

01:51:14 terms that you and others at the tmo had quotes offline quotes on quotes discussions with ryden prior to the award

01:51:24 award of the contract on the 18th of march about

01:51:27 about even the approach that they were going to take

01:51:31 to take about price that's right isn't it it doesn't cover that specific dialogue now but i think the principles of what was written here are clear and i've reported it to the executive team

01:51:43 executive team um and yeah so i think the the amount of information that's required here to make a decision is

01:51:49 is is fair and the risk the uh the trauer's advice here was that the risk was low so if the risk was low um it didn't it didn't occur to me at

01:52:01 um it didn't it didn't occur to me at that time to record that

01:52:11 now if we look at uh item uh well let's go back to the um let's go back to the tmo board meeting on the 27th of march uh tmo one double zero three one zero

01:52:23 uh tmo one double zero three one zero four zero please and let's just look at item two again we can see you're presenting and underneath the questions

01:52:35 you can see the question one the bottom of the page was it was pointed out there was a big difference in the prices being offered on page 83 however ryden's was consistently lower you see that yeah

01:52:46 you see that yeah and then if we go to the top of the next page

01:52:49 page it was queried why you see that it was queried why there was such a big deviation

01:52:54 deviation in tender prices and whether ryden had put in a low tender in order to obtain the contract confirmation was given that the pre-contract period was being recommended in order to look at these issues

01:53:03 issues it was queried whether this could be interpreted as being contractually committed

01:53:06 committed however we did not if we did not get within budget we would not be committed but there was confidence that it would be possible to get the contract within budget

01:53:16 budget you see that now that suggests that i would suggest to you that somebody would look at the issue of price deviation

01:53:24 deviation in the context of ryden's low price compared with the other bidders prices was it genuinely the plan that the pre-contract period would be used to check if ryden's price was too low to be

01:53:38 achievable no that wasn't the purpose i think that minute is

01:53:43 minute is it's not really very accurate what we um the purpose of the pre-contract agreement was to give budget certainty around the material aspects

01:53:54 aspects of the project that were were awaiting planning permission and so we needed to we needed to get further clarification of those but those elements were included in the

01:54:05 but those elements were included in the tender

01:54:06 tender so um i think the the minute takers probably confused things a little bit here

01:54:10 here right you said they were confused i take it that you've seen these minutes before coming here today or before i haven't looked at them since

01:54:21 since the time is missing okay taking it at face value it rather suggests that the impression was given to the board that the only discussion

01:54:32 that the only discussion about bringing the ryden winning bid number

01:54:36 number of 9.2 million done within budget was going to happen after this after the 27th of march doesn't it well after the 27th of march we

01:54:49 well after the 27th of march we so the 27th of march we got approval to enter into a pre-contract agreement and part of that pre-contract agreement was to firm up the price on the elements that were awaiting planning permission to progress

01:55:01 planning permission to progress the energy piece of work which could bring in some additional funding and to clarify some issues around the site boundaries which included the works that had been priced in the writings tender but which were

01:55:12 writings tender but which were currently in the calc project and if that

01:55:15 that moved from the calc project into the grenfell tower project which they actually did it would bring with it the budget as well so all of these things had an impact on the on the amount of money that was available and that was why we needed to

01:55:28 available and that was why we needed to carry on the clarification of these points so we knew how much budget there was and whether we needed any additional budget and which and so therefore we made the reference that we would be going back to

01:55:39 that we would be going back to the council the cabinet in june uh to to do that you see there's no suggestion in this document or the presentation you made to the main board of the tmo

01:55:51 made to the main board of the tmo that you have already got under your belt

01:55:56 some discussions or some confidence from those discussions that your budget could be met

01:56:02 be met why is that sorry i don't follow that question well you see it says in item two

01:56:07 two that confirmation was given that the pre-contract period was being recommended in order to look at these issues in other words that was going to happen

01:56:13 happen it hadn't yet happened what i'm putting to you is that there's nothing in here at all

01:56:17 at all which says let alain suggests that those discussions have already happened there was so i'm getting confused here because it's this minute is confusing and

01:56:29 this minute is confusing and so the pre-contract period wasn't looking at the base pricing of verizon's contract as this suggests

01:56:37 suggests that wasn't something we were going to do or could do and we could work with ryden's on value engineering um and maybe that's what is being alluded to here

01:56:47 to here but the process was we were going to enter into contract with the pre-contract agreement to ride once we've clarified the cost of the contract we either increase the budget or we or the option the other option

01:56:59 or we or the option the other option would be to go back out to tender look at item three it was queried whether we had confidence in ryden's pricing and confirmation was given that we had received a very detailed tender report which was also competitive

01:57:12 tender report which was also competitive did you give that confirmation yes i mean that that so i'll tell you what our country surveys they did a thorough evaluation

01:57:23 surveys they did a thorough evaluation of the

01:57:24 of the bid that was supported by a wider evaluation by other members of my team and artelia's team and

01:57:34 and pricing was a key part of that and the evaluation of that do we take it from these minutes that the board expressed some concern about ryden's price being so much lower than the other bidders i think that the board was asking for

01:57:47 i think that the board was asking for clarification asked some sensible questions looking at the information that was in front of them is that a is that a yes to my question i wouldn't say they were concerned they asked whether

01:58:00 whether i thought and whether the professional team thought that the price was sustainable and the advice that we'd taken from artelia was that they felt that it was and why by the words ryden's

01:58:12 and why by the words ryden's pricings was that a reference to the 9.2 million

01:58:15 million uh price in ryden's winning tender bid yes but in fact it's right as we've seen that

01:58:24 that the effort until this point with ryden was to get them to reduce their price down

01:58:30 down from the 9.2 million to 8.4 odd million no the action we were agreeing here was to clarify the price because at that time their bid their bid was 9.2 million

01:58:42 their bid their bid was 9.2 million but we hadn't agreed key elements of the scheme that we needed to agree so we could get cost certainty and so that's what this report was about we're saying these are the pieces of work we need to do to get cost certainty at which point i

01:58:53 to get cost certainty at which point i can recommend to the board that we go forward on that basis that was what this this process this is what this whole dialogue was about and why is there nothing in here

01:59:04 there nothing in here about agreeing the quotes on approach on quotes

01:59:07 quotes that ryden might take during the pre-contract period uh having won the contract about bringing the price down from 9.2 million

01:59:19 um

01:59:22 well it is it is covered in that because the materials the alternative materials prices on the cladding for example were covered in the tender so it's

01:59:34 were covered in the tender so it's why didn't you say when you confirmed that you'd received a very detailed tender report yes not only we got confidence in ryden's pricing at 9.2 but we think we can get them down to much closer to our budget why didn't you

01:59:46 much closer to our budget why didn't you say that

01:59:47 say that because i didn't probably think that at the time i was looking to work within the rules that were there

02:00:00 were you concerned at the time mr madison that ryden had put in a tender report a tender figure that was unrealistically low

02:00:08 um i didn't i thought there was a spread between i mean we didn't get a large number of bidders attenders in the end

02:00:19 end and there was a spread between first second and then second to third which wasn't unusual um i think if we asked

02:00:27 asked i mean i um atelier carried out an analysis and obviously recommended that we go forward so they didn't flag up any specific issues

02:00:39 up any specific issues yeah you see looking at item two the question is asked whether ryden's had put in a low tender in order to obtain the contract now perhaps doesn't matter who asked that question my question to you is

02:00:51 that question my question to you is did you ask yourself that question um no i took the advice from martel yeah right

02:01:03 you took the advice from artelia but was that as a result of asking yourself that question

02:01:11 i didn't see anything that suggested to me that this was a an artificially low price but someone on the board had can you account for why you hadn't i

02:01:22 can you account for why you hadn't i don't remember whether i hadn't to be honest it's a long time ago and there would have been discussions uh between the various parties at that time

02:01:32 time and nobody has raised any specific concerns saying that they felt that that price was abnormally low it seems just on the face of it that the board's reaction to the tender result was that bryden's

02:01:44 to the tender result was that bryden's price was

02:01:45 price was as it were too good to be true is that not something that occurred to you as well i think they were asking reasonable questions about the pricing giving proper scrutiny which is their

02:01:56 giving proper scrutiny which is their role

02:01:57 role can we go to tmo double zero eight five zero seven four four please

02:02:09 now this is a minute of the 19th of march 2014 executive team

02:02:17 uh and president attitude robert black yvonne burch and sasha jevons and in attendance to other people and apologies from anthony parks

02:02:28 apologies from anthony parks it looks as if you weren't there is that right i don't know well do you recall being at a meeting on the 19th of march 2014. not specifically but um

02:02:40 i wouldn't go to exec i wouldn't go to a full executive team i would go if i had a particular report so if there's a report here i may have gone to present that report very well let's um let's look through it

02:02:51 very well let's um let's look through it can we go

02:02:52 can we go to page two just to see what's on that page

02:02:57 page and we can see that the topics there fundraising tea party councillor briefing egm threat and board board 27th march papers for the board agenda were distributed to disgust

02:03:08 agenda were distributed to disgust and then if we go to the very bottom of the page

02:03:11 the page asset management strategy peter madison we'll be discussing and then go please to page three the next steps with laura johnson and had also discussed the process with councillor fielding melon

02:03:22 councillor fielding melon and then underneath that grenfell tower and we can see what's said there and let's just see what there that it said um and what i want to know

02:03:33 that it said um and what i want to know first of all is whether this is something you provided to them or whether you were present there and made this presentation this looks like i was present i'm presenting my report that was going to the boards the following week so this is the report that

02:03:44 the report that all right i was finalizing through the process let's let's let's look at it further clarification was requested on the scope of works

02:03:52 of works and the preferred contractor and this would be done peter madison to brief independent board members before the meeting

02:03:58 meeting the reputational importance of delivering the contract on time and within budget was recognized the background of the report was discussed in detail the board were being asked to agree a budget of 9.7 million pounds and to enter into a

02:04:10 pounds and to enter into a pre-contract agreement when the detail on the cost for windows cladding etc would be firmed up we would need to strip out some of the costs which were not in the contract peter madison had already met the recommended contractor

02:04:22 recommended contractor informally on whether savings could be made

02:04:25 made i.e pricing of landscape works 200 000 pounds saving an alternative material for cladding 500 000 pounds saving eco funding about 150 000 pounds

02:04:36 eco funding about 150 000 pounds plus small-scale engineering items with these measures we were confident that we would get within budget but if we could not achieve this we would have to go back to rbkc although there was potential for a challenge from the other two contractors

02:04:49 challenge from the other two contractors there was a significant gap between their tenders and their recommended contractor the situation was not unusual and the board would be advised that further work would be done on the detail all the tenders had been notified of the

02:05:00 all the tenders had been notified of the outcome of the tender assessment on the 18th of march and we would have 30 days before we entered into a formal contract we may receive a freedom of information request on the tender documents which would be commercially sensitive

02:05:12 which would be commercially sensitive and this was discussed although we did not want to have to release the detailed tender documents we could release the price of the contract there was concern that we may be required by the ico that's the information

02:05:23 information commission i think to release more information trauma's advice had been taken on risks entailed in the procurement which also included any potential freedom of information request we wanted to have a clear

02:05:34 request we wanted to have a clear line if we can go to the next page on how we manage any potential requests and also within the council it was queried whether it would be possible to obtain trials advice in writing

02:05:44 writing in order to avoid this potential risk we could go back to council on the budget however any change in the budget would have to go to cabinet which would mean a decision being deferred until july it was proposed that we continue with the existing proposal and establish

02:05:56 the existing proposal and establish which documents we would have to release if we received a challenge particularly since we were confident

02:06:01 confident that we could get within budget if outstanding issues could not be resolved during the pre-contract period we would then get back to the council on the budget

02:06:07 budget and report the position to the board now i've read that out in full to you is that

02:06:14 that the record of the discussion that you recall

02:06:17 recall having had on the 19th of march as recorded here with the executive board i haven't seen this um so i wouldn't be party to the minutes of

02:06:28 so i wouldn't be party to the minutes of the executive meeting so i probably haven't seen this didn't see this at the time so wouldn't be able to correct it for accuracy but uh it sounds like that's a summary of the conversation that i had with the board

02:06:38 board in relation to my board report for the 27th

02:06:44 27th and we are we to take it from this that you told robert black and sasha jeffers and the other members of the executive board

02:06:55 board that you had had these discussions with ryden

02:06:59 ryden about specific figures as we've seen on the previous page can i see that can i say let's go back to those please

02:07:07 third paragraph down under grenfell tower

02:07:10 tower landscape works for 200 000 pounds etc

02:07:20 i think that's that isn't that isn't the um that's the way i can see that's been minuted but that isn't the nature of the discussion as i say

02:07:31 the nature of the discussion as i say the discussion was to clarify the points that were written into the pre-contract agreement to clarify whether these savings could be delivered that would be a more correct way of administering it well

02:07:42 administering it well whether it's correct or incorrect do you disagree with where it says that you had already met the contract recommended contractor informally on where the savings could be made i.e pricing of landscape works 200 000 pound saving an alternative

02:07:53 200 000 pound saving an alternative material for cladding five hundred thousand pound saving eco funding about a hundred fifty thousand pound saving plus small-scale engineering items so what we've welcomed let me put the question do you disagree

02:08:05 let me put the question do you disagree with the minute on that well what what actually happened there was

02:08:09 there was that so i've clearly have reported that i did have the meeting with the preferred contractor which as as stated earlier so i've been transparent about that it wasn't a secret meeting it was a

02:08:20 secret meeting it was a meeting that i was above board on and that i clarified that there are items there that need pricing clarification so for example the landscaping works the alternative cladding material and

02:08:32 the alternative cladding material and they were the things that we recall required clarification on which is the tendering um sorry the planning permission which would clarify the materials that could be used

02:08:43 clarify the materials that could be used and consequently the price of those so that's actually what was to be clarified here so we can understand the price

02:08:50 price i mean it looks from this record that you were giving the tmo executive board specific figures for specific items of savings

02:09:01 figures for specific items of savings these were items that were priced within the tender so the landscaping works were priced within the ryden's tender the cladding material was all deal with there were two

02:09:12 there were two options priced within the tender for cladding material so we needed to establish through the planning process which material it would be and then we would be able to understand what the price of that would be in the

02:09:23 what the price of that would be in the context of the ride and tender all of these relate to the specific pricings within their tender and if they were already within the tender what was the point of having an

02:09:34 tender what was the point of having an informal meeting or whether the savings could be made as listed because we wanted to progress that the clarification of

02:09:46 progress that the clarification of of these issues relating to so we want this to the pre-con pretender agreement

02:09:52 agreement was about progressing these specific issues that were in their tender because if the planning

02:10:00 the cladding cost was dependent on whether planning permission was for aluminium or zinc for example we needed to get the plant permission to know which cost applied um the landscaping works was it was an

02:10:13 um the landscaping works was it was an optional cost within the ryden's contract but it was also in

02:10:18 also in the bowie contract on the adjacent site so we need to establish whether that would

02:10:22 would move into into the ryden's contract or remain in the bui contract so these were things that needed clarification and that was the purpose of the pre-contract agreement to clarify costs which were

02:10:34 to clarify costs which were priced within the ryden's document the other aspect of this was the value engineering which was the 270 000 pounds or so

02:10:44 or so that was estimated at that time and that was about establishing the principle with ryden's that they would work with us through the value engineering facilities within that contract

02:10:58 this of course all took place on the 19th of march this discussion

02:11:04 yes after the award of the contract to ryden on the 18th after the notification went home yes do you recall having any discussions with

02:11:16 you recall having any discussions with any member of the executive board along the lines we see here before the contract was notified the winner of the outcome of the bid was notified to the bidders on the evening of the 18th of

02:11:27 bidders on the evening of the 18th of march

02:11:31 um i don't remember it's

02:11:35 can we take it therefore that at least as a matter of record you didn't share the discussions that you'd had informally with ryden with the tma's executive board until

02:11:46 with the tma's executive board until after ryden had been told it was the winner of the bid i don't remember whether i did or not i may have had a conversation with um with my line management i can't

02:11:57 um with my line management i can't remember

02:11:58 remember i'm going to turn to a different topic and that's the decision making about acm clouding on the building now scrolling back if we can to 2013

02:12:11 scrolling back if we can to 2013 the prospect of using a cladding other than zinc

02:12:14 than zinc had already been raised when you came into

02:12:18 into the project in early 2013 that's right yeah

02:12:22 yeah and i think it's right that in fact the suggestion of using aluminium cladding had come from lead bitter as a potential for value engineering i saw a record of that yes you saw a

02:12:33 i saw a record of that yes you saw a record of that where did you see a record of that i can't remember but i certainly in an early briefing i think i probably got from

02:12:40 from probably artelia i was briefed that there were a variety of options in respect to the the cladding material right uh an early briefing well

02:12:51 briefing well let's go just to pin this point down tmo double zero eight seven nine seven seven one please which is your notebook number one and

02:13:02 which is your notebook number one and i'd like to go to page 10 on the right hand side of that

02:13:11 and if you uh look please uh at the bottom of the page you can see and the only date i think we

02:13:22 you can see and the only date i think we have for this page uh is on the top left hand side 28 of january 2013. and you can see

02:13:35 down under

02:13:39 the bottom of the page you see actions apple yards to write to lead bitter you see that

02:13:45 see that yes and

02:13:48 yes and then it says uh

02:13:51 resources plan and then item three clarify market testing of costs for a d v e options for bringing scheme within budget you see that yes

02:14:04 and then uh in fact we also see

02:14:10 immediately above that

02:14:14 uh current costs against current cost plans

02:14:17 plans under a was that a discussion about value engineering sorry sorry um what is what a discussion about value engineering well did any of the discussions

02:14:28 the discussions in that note refer to value engineering relating to current costs against cost plan the point d is the options for bringing scheme within budget engineering i see and if you cast your eye to the left-hand side of the page

02:14:41 eye to the left-hand side of the page and this may be earlier in a meeting at the bottom of the page it says vm zinc cladding is proposed led bit has proposed aluminium as cheaper option i think that is but

02:14:52 as cheaper option i think that is but still 1 million pounds over budget do you remember that discussion i've seen this

02:14:59 seen this yes i do remember that discussion there were a lot of there were a broad very wide number of um materials being discussed at various points but yes i do remember that veterans had

02:15:10 yes i do remember that veterans had proposed

02:15:11 proposed an aluminium option right and what did you understand aluminium cladding two refer to when you wrote that note i didn't other than they were described as zinc or aluminium

02:15:22 they were described as zinc or aluminium let's see

02:15:23 let's see when aluminium cladding was referred to as an alternative did you understand that that was a cheaper option than zinc it's clear from that that it was cheaper but still over still of a budget still expensive

02:15:35 over still of a budget still expensive right

02:15:36 right so i mean i think you're really just confirming your note as accurate at the time

02:15:40 time um now the bid is in the tender when we look at it a year later we're all asked

02:15:46 all asked to price several options for cladding including an alternative for acm do you remember that i don't specifically now you know did you have any input uh as um as the client

02:15:59 uh as um as the client uh into the nbs specification which went out to tenderers no you didn't not personally i mean the client

02:16:07 client my team i had a head of service and a project manager who were leading the the operational aspects of this and they managed the the team sorry

02:16:20 the team sorry i'm sorry i couldn't no did you know that as part of the nba specification bidders had been asked to price uh alternative rain screen cladding um as well as zinc

02:16:33 cladding um as well as zinc that is yes you did

02:16:37 the reason for that was at that stage we didn't have planning permission and the planning permission had been quite contentious to that point so they've been through a number of iterations of planning and they've been a long dialogue so what we wanted to do because the

02:16:48 so what we wanted to do because the decision hadn't been made at that time was to price a number of options so that we could then once planning permission was achieved have a firm price from a contractor what we didn't want

02:16:59 we didn't want was to select a contractor then get a planning permission that moved the material costs and we'd end up in a weak position in a negotiation on an alternative material

02:17:10 an alternative material now it's right in the end that ryden offered the lowest cladding price of the bidders as well as the largest saving to be made if a cm was was chosen that's right yes yeah

02:17:21 cm was was chosen that's right yes yeah and can we go back to um artelia's final tender report of the 12th of march 2014 which is at art 402197

02:17:32 of march 2014 which is at art 402197 and i'd like to go to page 12 at the bottom of the page there

02:17:37 so we can see the adjusted tender sun there

02:17:41 there compared and we can see that artelia's pre-tender estimate was 10 million odd pounds just over 10 million pounds and ryden comes in at 9.249 million

02:17:51 million durkheim at 9.940 million and milali comes in at 10.480 million you see that yes it's clear that all of those bids were over your budget of 8.5 million

02:18:02 were over your budget of 8.5 million weren't they like 4.5 million for construction is it fair to say that from that point on at least 12th of march 2014

02:18:10 2014 the general focus had to be on the savings that could be achieved in order to bring the costs down to somewhere near the tma's then budget it wasn't just to focus on savings it was a focus on cost clarity

02:18:21 was a focus on cost clarity so you know if if the planning permission had been for a different material

02:18:25 material for example um then our options are to increase the budget or to do different you know

02:18:33 you know or to do something different in terms of the procurement right but do you agree that the natural consequence of what you were doing at the time was looking for ways to reduce the cost of the project it was looking at the options as to whether the the

02:18:44 whether the the the same sort of outcomes of the scheme could be delivered within the budget or whether we needed to increase the budget significantly or rethink the whole project and as one of those options the tmo was searching for

02:18:56 those options the tmo was searching for the cheapest possible cladding no the there are cheaper options there's a vast range of different approaches that could

02:19:08 different approaches that could be applied to the cladding materials used on the building and there had been a long conversation with planners on this whatever so there had been a very wide number of

02:19:19 there had been a very wide number of iterations and options proposed and different materials by the architect

02:19:26 architect but i think the the key thing from a client perspective was that our understanding was that anything that is being proposed as a material is compliant

02:19:37 material is compliant with building regulations and um and that was part of their contractual obligation as well as their professional obligation well again mr medicine forgive me for pointing this

02:19:49 medicine forgive me for pointing this out but the answer you've given me deviates into a whole lot of different topics and i'm not going to follow each of those up with you my question was is it right that at the time as part of

02:20:01 is it right that at the time as part of its exercise in march 2014 was that the tmo

02:20:05 tmo was looking for the cheapest cladding it could get

02:20:08 could get in order to reduce the overall budget i don't agree with the word cheapest all right we were looking for a compliant

02:20:17 compliant um material something that and we weren't looking for the cheapest we were looking for something that would achieve planning permission and it would meet the regulation well

02:20:28 and it would meet the regulation well zinc did that didn't it i don't know and that a change to acm was for budgetary reasons no it was an option in the tender yes so so our

02:20:39 so our architects the architects here had proposed a range of different options and all of which were required to be compliant by them professionally and and contractually in legally so we were

02:20:52 and contractually in legally so we were given options around that and some of those options were were aesthetic um and we needed to go through a process of agreeing with the planners which ones

02:21:03 agreeing with the planners which ones we could install well let's look at it very broadly why do you think aluminium composite material rain screen panels were being discussed at all they'd been proposed as an option by the

02:21:15 they'd been proposed as an option by the architect

02:21:16 architect why because on the assumption that they were compliant and that they were an appropriate material to be used on the building but

02:21:27 material to be used on the building but the main

02:21:28 the main or primary uh specification for the range screen panels was zinc with a honeycomb metal core what did you think the purpose of the alternative acm uh

02:21:40 uh it was for two two reasons one one was about planning because we didn't have planet approvals and there'd been a long conversation with the planets about the the aesthetics of the building and how it should work

02:21:52 should work and the second is for it was a was a price marker so that if and when the planning permission is approved then you've got a price for that material that would save any

02:22:04 for that material that would save any negotiation down the line are you saying that it was your understanding that the reason why the nbs specification carried an alternative for to zinc namely acm

02:22:18 for to zinc namely acm was not for budgetary reasons is it was for pricing purposes and it was to give an option as and when planning was approved and coming back then to this time which is

02:22:31 coming back then to this time which is march 2014 the nba specification having gone out as part of the tender in the previous november

02:22:38 november it's right isn't it that the tmo was looking at cladding in particular as one of the candidates for let me put it this way value engineering

02:22:49 engineering this was um it was one of the options that were proposed by our professional team as an option so all of the design and the technical aspects of of the cladding selection was proposed

02:23:00 of the cladding selection was proposed and recommended by a professional team so that was um studio we as the designer artelia as our quantity surveyor and employers agent so they were the

02:23:11 and employers agent so they were the ones who were considering these and they were recommending things that we could consider

02:23:16 consider in terms of um budget options going forward

02:23:19 forward mr mr madison it's a it's a long and very qualified answer a very simple question was the tamo interested in looking at acm as one of the elements of value engineering

02:23:31 of value engineering that's what was recommended by our professional team yes so i think the word at the end of that is yes is to my up to my question but it wasn't driven by the tmo is we were taking advice here

02:23:42 were taking advice here on the from the professional team who are responsible for the design and the cost control of the project now i'd want to examine the role of rbkc

02:23:53 now i'd want to examine the role of rbkc in all of this and you're i think i think the effect of your advice last week sorry your evidence last week was that rbkc would effectively be in control of the budget

02:24:05 effectively be in control of the budget as the funder

02:24:09 no not entirely there so i mean i think this

02:24:13 this project in particular was complicated so there was governance of it through the board and there's also governance of it through

02:24:19 through cabinet because some of the money that was

02:24:22 was put into the project came from a different source so i treated both lines of governance as the same really and looked for approval through both right well let's go to a document then

02:24:34 right well let's go to a document then tmo one triple zero two eight four nine please

02:24:41 and this is a report to the tmo programme board on the 20th of june 2013

02:24:50 and just for your own criminal chronology this was a day after the arrival of the final

02:25:01 after the arrival of the final updated june june 2013 artelia report which we looked at last week now if we go to the bottom of the first page you can see

02:25:12 page you can see that there is discussion of the proposed scope of the works do you see that yes immediately above that it says following a discussion with the

02:25:23 a discussion with the director of housing at rbkc options to reduce the scope of the works to the boxing club and nursery have been rejected

02:25:30 rejected however the proposals to create additional workspaces in the baseline studios have been emitted from the proposals

02:25:35 proposals the director also indicated that the scheme should be contained within the 9.768 million pound budget see that yes who is the director of housing referred to there that's laura johnson that is laura

02:25:47 that's laura johnson that is laura johnson now the figure there is the budget is this right inclusive of costs and professional fees yes yeah so when when we look at the 9.768 just to be clear

02:25:58 9.768 just to be clear we're really talking about that figure inclusive of fees with a construction budget of 8.4 odd million pounds yes

02:26:08 and we know i think can just correct me if i'm wrong about this that the overall budget fees inclusive was increased in june 2014 to 10.3 million that's right yeah but as at this time june 2013 it looks

02:26:21 but as at this time june 2013 it looks like the tmo was operating on the assumption uh that it could have no more money for this project over and above the 9.7 yeah we were looking to work to that budget at that time yes

02:26:31 time yes so you were working yes exactly you were working looking to work to that budget um did that mean that if in the tender the prices came in higher

02:26:42 in the tender the prices came in higher than that budget the tmo wouldn't simply be able to go to rbkc and say well can we please have some more money the professional team at this time was trying to work within that budget so we were looking to

02:26:54 within that budget so we were looking to engineer the scheme into that when you say at this time which time you're referring to at the time of this discussion indeed but then there was a retender and my

02:27:05 then there was a retender and my question again did the fact that you were

02:27:09 were told by laura johnson that the scheme should be contained within the 9.768 million pound budget mean that when the tender came in and

02:27:20 mean that when the tender came in and the lowest price was higher than the budget

02:27:24 budget you wouldn't simply be able to go back to rbkc and ask for more money it wasn't as categorical as that but i think that um there was a significant budget here

02:27:36 um there was a significant budget here this was 10 million pounds been you know nearly 85 000 pounds a unit

02:27:41 unit in a block which and the 10 9.7 million pounds was was more than the entire budget for the capital expenditure on the rest of the borough that year a really significant amount of work and

02:27:53 a really significant amount of work and i think laura was saying you know try and work you know work within within that confine it's a lot of money

02:27:59 money yes and really it comes to this having been told that in the june of 2013 when it came to march 2014 was it impossible for you effectively to

02:28:10 was it impossible for you effectively to go to rbkc and say our budget is eight hundred thousand pounds short of the lowest bidder can we please increase our budget it wouldn't have been impossible we could we could have done that why

02:28:21 we could we could have done that why didn't you because we felt that there was an

02:28:24 was an it was a step there was a step to go through first to establish what um what what the price of the of the works

02:28:35 what what the price of the of the works actually is in terms of clarifying uh the issues that i've talked about in terms of we didn't have planning permission we needed to talk about

02:28:43 about the you know what the appropriate materials were getting planning permission for the windows et cetera why instead of taking a risk of

02:28:54 instead of taking a risk of a non-compliant tender process and calculating that risk and deciding it was worth running didn't you simply as a first step go to rbkc and say

02:29:06 rbkc and say can we please have eight hundred thousand pounds more because we still didn't know the cost of the project it was an academic point that we needed to understand the cost of project and to do that

02:29:17 do that we needed to get planned we needed the contractor to get planning permission and and we need to clarify the other issues that i've mentioned in the pre-contract agreement when you say you didn't understand the

02:29:28 when you say you didn't understand the cost of the project are you telling us that when ryden said 9.2 million you thought they meant something else no i'm saying that we didn't have planning permission there was still risk

02:29:40 planning permission there was still risk attached

02:29:40 attached to that price because we didn't know which material was going to be was going to be required why didn't you go

02:29:47 go as a first step to laura johnson and say the bids have come in at minimum eight hundred thousand pounds above our budget it's very likely that i'm going to have

02:29:58 it's very likely that i'm going to have to ask for a significant amount more money

02:30:01 money why didn't you do that because we didn't think that was the case we thought what you what we the the first step in that

02:30:08 that was to go and clarify exactly the the issues that were unclear which were about material cost window design the issue around the

02:30:19 window design the issue around the public realm around the building so we went and clarified those costs at which point we were able to go back to the council with a more informed proposal because these

02:30:30 a more informed proposal because these things have now been developed and agreed

02:30:32 agreed and at that point they increased the budget to 10.3 million right it's really this why did why was your first reaction to take a risk of a non-compliant eu procurement exercise rather than simply going to

02:30:44 exercise rather than simply going to rbkc and asking them for more money even if some wasn't exactly i just didn't see it that way i thought that it

02:30:50 that it seemed a logical approach to clarify the costs and then then to get whatever approval that would be that would require and is that because actually the very last thing you could do

02:30:58 do was ask rbkc for any more money no rbkc had been very they were they were in the process of releasing

02:31:07 releasing additional capital expenditure so at that time we'd uh so the capital programme when i arrived at the cmo was about eight seven or eight million pounds that had increased to about 22 million pounds

02:31:19 had increased to about 22 million pounds a year

02:31:19 a year so they were they were releasing capital investment to invest in the in the housing stock at that time and grenfell tower was a significant part of the of an early stage of one of those

02:31:30 stage of one of those projects let's move then to the detail of the discussions with ryden on the 18th of march i've already shown you some of the some of the documents about that and the

02:31:41 of the documents about that and the presence of katie bachelier there and let's look at ryd403489 then please i want to look at some of the detailed figures this is an email from

02:31:53 figures this is an email from katy perchelier on the 20th of march 2014 to simon lawrence and steve blake

02:32:00 now you're not copied in on this it's an internal ryden communication and she says

02:32:04 says all further to our meeting on tuesday please find attached our summary list of value engineering options as discussed we will continue to look for further savings and identify them as we

02:32:14 we progress now this is the 20th of march and that's during the ojeu standstill period isn't it yes yeah and

02:32:27 um

02:32:30 i'm so sorry i've got this i've got this wrong look it's it isn't an internal email at all it's an email to you mr madison and indeed to mr gibson as well

02:32:41 and indeed to mr gibson as well so you did see this at the time i'm sorry i put this to you on a wrong basis in fact you received this at the time didn't you yes yes and

02:32:52 yes yes and she's sending you a list of value engineering options did you open the document do you think i don't remember it says further to our meeting on tuesday and that would be the meeting on

02:33:03 tuesday and that would be the meeting on the 18th of march would it i assume so yeah and katie bachelier was as i think we've established ryden's estimator present at the meeting yes yes yes and she

02:33:15 yes yes yes and she says please find attached our summary list of value engineering options and you can see that there are two attachments to the email there's the ve options 18th of march document and the cladding ve options

02:33:27 document and the cladding ve options 18th of

02:33:28 18th of march 2014 document you see yes uh do you remember whether katie bachelier was asked to produce specific figures or revised figures for savings at the actual meeting on the

02:33:39 for savings at the actual meeting on the 18th of march no uh if we look at the documents first can we go to ryd403491 this is the second of the two documents

02:33:51 this is the second of the two documents or the second of the documents attached to her email it's grenfell tower value engineering cladding options do you see yeah and you can see that she sets out cladding options for an alternative zinc

02:34:03 cladding options for an alternative zinc system cassette and face fixed and an alternative aluminium system for cassette and face fixed and there are the savings in negative do you see yes

02:34:14 savings in negative do you see yes did you open the attachment when she sent it to you i don't recall do you remember seeing this document at the time i don't recall did you have any understanding by what she meant by alternative zinc system

02:34:25 she meant by alternative zinc system cassette

02:34:26 cassette no or face fixed well i know what phase fixed and cassette mean but i don't remember this particular document right did you remember the figures for alternative aluminium system

02:34:38 for alternative aluminium system cassette of 293 saving an alternative aluminium system face fix of 376 saving i don't remember this specific piece of information at that time do you remember in general terms being

02:34:50 do you remember in general terms being uh

02:34:51 uh told that cassette was more expensive than face fixed in either system not necessarily at this time but i remember a conversation at the time when um

02:35:02 subsequently there was a conversation with do you remember getting the impression at the time from the email that the cheapest cladding on this assessment was face fixed acm i don't remember at that time and this wasn't a

02:35:14 remember at that time and this wasn't a this was a level of detail that we didn't require information at the moment because this would have been a matter for a professional team but clearly ryden had been doing some work as part of their evaluation and decided

02:35:26 as part of their evaluation and decided to share it with us early did did katie bashalia share these figures or anything like them with you at the 18th of march meeting not that i remember just while we're on

02:35:38 not that i remember just while we're on the document can i just ask you to note the two aluminium figures at the bottom two rows there the aluminium cassette as the alternative case of uh saving of 293 odd thousand pounds

02:35:49 saving of 293 odd thousand pounds and for face fixed the saving of 376 odd thousand pounds just note that we'll come back to that can we move on then in time to the first of april 2014

02:36:00 then in time to the first of april 2014 some 10 days or so later 11 days later um now we know that uh ryden had been notified of the fact that they were the winners on the 18th of

02:36:12 they were the winners on the 18th of march just for date purposes can we look at tmo10023253 please this is a minute

02:36:26 this is a minute of the first of april contractors induction meeting at kctmo's offices you see that although this issue is a draft it's the one we've been using and

02:36:39 draft it's the one we've been using and nobody seems to suggest this is inaccurate in any way uh except in relation to specific matters perhaps you were at this meeting i think if you can see the list of those present

02:36:50 can see the list of those present yes if we go to page two at item 2.1 please you can see that the note says under the heading proposed savings referenced in tender submission

02:37:01 referenced in tender submission it says there is a potential saving of up to 376

02:37:04 up to 376 175 pounds that could be realized through changes to the proposed cladding savings can be achieved by changing the material and the method of fixing changing from zinc to aluminium and using a face fixing rather than cassette

02:37:16 using a face fixing rather than cassette would save the most money all changes would have to be approved by the planners sl simon lawrence who was also at the meeting noted that the only noticeable difference in appearance is that you

02:37:27 difference in appearance is that you would be able to see some of the fixings if the cladding is fixed using a face fix now i just want to ask you about the figure of 376 175 pounds there that's the figure in

02:37:38 175 pounds there that's the figure in katie bachelier's um document that we saw she sent you on the 20th of march isn't it yes i can see that yes and that was the highest possible saving that could be made on cladding wasn't it

02:37:50 made on cladding wasn't it as we've seen from her list uh from her yes from her list yes yeah um do you know who

02:37:57 know who said at the meeting there is a potential saving of up to 376 175 pounds i can't remember is it fair to say that at that stage the tmo wanted to have faith

02:38:09 tmo wanted to have faith fixed aluminium cladding because it could get the largest possible saving that way

02:38:15 that way um

02:38:19 i think our view was we needed to clarify what pl what would satisfy the planners at this stage so yes it's clear that all changes would

02:38:30 so yes it's clear that all changes would have to be approved by the planners but i'm interested in the money side of things is it the case that the tmo wanted or would have liked to have acm face fixed as the system because that

02:38:42 face fixed as the system because that would produce the most savings um i think it's more complex than what the tmo wanted i think we wanted something that was you know our understanding was that all

02:38:54 you know our understanding was that all of these materials were compliant and that the planners needed to be satisfied that they were appropriate so we so those issues were more important than the

02:39:06 issues were more important than the prices itself although there was a consideration such a consideration of um the choice between the zinc system and an aluminium system was

02:39:17 system and an aluminium system was really about um and was based on an understanding that they had similar outputs they had similar

02:39:24 similar um level of compliance the topic here though is savings isn't it that's what the heading says proposed savings

02:39:32 savings it's saving subject to um you know it's not just savings it's um there are other aspects as well well the topic under discussion wasn't how do we satisfy the planners it was

02:39:43 how do we satisfy the planners it was well it was what are the savings so that was part of the dialogue with the planners to try and establish exactly what materials would satisfy them and that would clarify

02:39:54 clarify what the appropriate cost would be

02:39:58 i'm sorry let me try again the topic under discussion was the proposed savings

02:40:03 savings wasn't it and the entirety of the first paragraph

02:40:06 paragraph is about what savings could be achieved by changing from from zinc to acm yes yes and you've got a specific figure for the maximum saving there which was face fixed acm that was the topic of conversation no

02:40:19 that was the topic of conversation no it looks like that yes yes and of course although it says all changes would have to be approved by the planners the focus here

02:40:25 here was the maximum saving that the tmo could achieve by changing from zinc to acm is that not the case

02:40:33 the case but there's another and with an underlying assumption that those will meet with regulations and with planning did you question whether there would be a reduction in quality or performance

02:40:45 a reduction in quality or performance when considering the substitution of the zinc panels with acm panels did i personally yes um i don't remember having a specific conversation on that

02:40:57 having a specific conversation on that the assumption here is that all materials that are proposed by the designers

02:41:02 designers comply with building rigs and the law now it's right isn't it that from this time on the project team never considered any type of cladding other than acm

02:41:12 than acm i don't recall i wasn't involved in all of the discussions right was there any dis question or discussion about which type and which manufacturer of acm would be used

02:41:25 of acm would be used i don't recall i mean for example do you remember a discussion about whether it should be

02:41:30 should be uh rayna bond made by arconic uh or a leukobond

02:41:35 leukobond made by 3a i wasn't familiar with those at that time do you know you say do you know why only reyno bond

02:41:47 you say do you know why only reyno bond acm was being considered as seems to be the case

02:41:50 the case i didn't know now

02:41:56 a saving of 376 000 odd pounds is a pretty big saving isn't it if you can make it yes yeah

02:42:06 did you ever ask how come it's so much cheaper than zinc how come acm is so much cheaper than zinc i wasn't deeply involved in the conversations that the team

02:42:17 that the team that was that was really run by my team and i

02:42:21 and i had more of an overview and my my role in this was about the governance side of things the budget and making sure that high-level stakeholder involvement really i see and it would follow from that

02:42:33 i see and it would follow from that answer that you would personally never have had calls to consider whether the acm alternative was acceptable or compliant from a fire safety perspective i wouldn't be involved in that detailed

02:42:44 i wouldn't be involved in that detailed level of conversation now

02:42:56 did you ever ask the question itself whether

02:43:00 whether when going about value engineering specifically in relation to the cladding there might be a compromise to its or of its functionality or safety and that that that just wasn't allowed

02:43:13 and that that that just wasn't allowed in terms of the the process so anything has any alternative materials has to meet regulations now you've mentioned planning quite a lot on your evidence

02:43:24 planning quite a lot on your evidence this morning i just want to examine that a little bit more closely if i may with you

02:43:27 you uh planning commission i think was granted on the 10th of january 2014 wasn't it

02:43:33 wasn't it subject to conditions yes yeah can we look at the decision notice it's tmo double zero eight three one one zero seven

02:43:49 and on the first page we can see the date 10th of january 2014 and the heading

02:43:57 and then the subheading permission for development brackets conditional brackets

02:44:01 brackets and it then says the borough council hereby permits the development referred to in the under mentioned schedule subject to the conditions set out there in and in accordance with the plan submitted save in so far as may

02:44:12 submitted save in so far as may otherwise be required by those plans or by the set conditions your attention is drawn to the enclosed information sheet

02:44:21 just looking at the document do you remember seeing this at the time no you didn't um can we look at page two please of this document and let's look at conditions three and

02:44:32 and let's look at conditions three and four condition three is detailed drawings or samples of materials as appropriate in respect of the following should be submitted to and approved in writing by the local planning authority before the relevant part of the work is

02:44:43 before the relevant part of the work is begun and the work should not be carried out other than in accordance with the details so approved and shall thereafter be so maintained and then here's the condition materials to be used on the external faces of the buildings

02:44:55 buildings and then under item four the same condition in respect of the windows and the doors

02:45:03 the doors and the reason in in in relation to the materials is to accord with the development plan by ensuring that the character and appearance of the area are preserved and living conditions of those living

02:45:14 living conditions of those living near the developments suitably protected and in relation to windows and doors again to ensure the appearance of the development is satisfactory to safeguard the immunity of the area we can see that

02:45:27 can see that does that tell us in relation to condition three that external cladding material was still to be approved by planning yes and to put that in the context within the timeline of the ojeu tender does this mean that the um

02:45:42 tender does this mean that the um that the effect of achieving planning permission with this condition in it means meant that the contract could be awarded without a final specification

02:45:53 specification as to the clatting in other words the cladding could be specified after the contract was awarded the responsibility post contract passed to the main contractor as the designer

02:46:04 to the main contractor as the designer to comply with the planning permission yes to put it a slightly different way during the oj ojeu process up to the award of the bidder award of the successful contract of the bidder

02:46:17 the successful contract of the bidder uh it was still an open question as to what the planners would accept by way of the cladding material that's right and therefore it left it open for discussion if you like or decision at a later stage yes yes and and

02:46:31 yes yes and and if if ryden were the winners as they turned out to be that would mean that the cladding itself could be chosen by them at a later stage in the process i don't know the details of how that was written

02:46:43 know the details of how that was written in the

02:46:43 in the in the tender but um that was my understanding yes and the fact that the planning wasn't fixed

02:46:50 fixed in respect of a particular cladding material

02:46:53 material meant that um a cheaper cladding system than one in the primary zinc in the nba specification could be selected and put to planners

02:47:04 could be selected and put to planners um it could be although the acm was it was also priced within the specification yes i know absolutely but in other words you had a lot of

02:47:15 in other words you had a lot of optionality if i can use that word about what um cladding you would use given the state of the planning consensus at the time yes yeah now can we go to tm0085142

02:47:33 this is an email from you to david gibson

02:47:36 gibson i'm sorry from claire williams to david gibson copying you in on the 6th of may 2014 and it forwards an email from simon

02:47:48 and it forwards an email from simon lawrence of the same day do you see that yes um do you remember this email no now let's have the first and the second pages of this up together because we i just want to look at the simon lawrence email with you because clearly

02:48:00 lawrence email with you because clearly you were copied in on it or it was forwarded to you and it says um afternoon all due to a pre-book training course that i have i will not be able to attend thursday's meeting with the rbkc

02:48:12 thursday's meeting with the rbkc planners

02:48:13 planners however fortunately steve blake my director has offered his services to attend on my behalf i'll bring steve up to date with all the information that i currently have just to clarify my understanding of the meeting agenda and goals i've listed

02:48:24 meeting agenda and goals i've listed them below are gender points and if you look at the agenda points it says on the first one the first bullet proposal of material change to the facade from zinc to aluminium composite acm put

02:48:36 from zinc to aluminium composite acm put forward our case that acm is not an inferior product to

02:48:42 zinc do you do you remember reading simon lawrence's email at the time with these agenda points in it um i don't recall but

02:48:56 was there a concern do you remember that the planners might think that acm was an inferior product to the zinc um simon lawrence is suggesting that it's not

02:49:09 is suggesting that it's not indeed and he's suggesting that it's not as part of a case and a case um is obviously a position my question is was there a concern

02:49:20 my question is was there a concern within the tmo that the planners thought more might think

02:49:26 think that acm was an inferior product to zinc

02:49:32 i don't know i think we were just trying to i think the whole project team was trying to arrive at a design and a set of materials that met the planning planning permission

02:49:43 planning permission yes absolutely my question again do you remember whether there was a concern a worry that the planners might think that acm was inferior to zinc

02:49:56 was inferior to zinc i don't know and did you think that it was necessary for ryden

02:50:02 ryden to argue a case or put forward a case that acm

02:50:06 that acm wasn't inferior to zinc i don't know i don't know the purpose of simon's email here well you see you received this email i know in copy but you received this email from claire williams who thought it was important

02:50:17 williams who thought it was important enough to

02:50:18 enough to ensure that you were copied in on it what was your role at the time in relation to this detailed matter if not at least to understand what was going on well at this stage um ryden's had been

02:50:31 well at this stage um ryden's had been appointed

02:50:32 appointed and were working on the details of the pre-contract agreement um so it was for them to work up a design that was

02:50:44 that would meet approval that was what they were doing here is it fair to say that at least ryden and

02:50:51 and and you ryden and the tmo were aware that the plan is needed in some way to be convinced that acm was a suitable material for the building in place of zinc

02:51:02 building in place of zinc i think this was i think that the conversation with the cladding is as i remember was all about the aesthetics and so it was about um and there'd been various iterations of various designs over a very long

02:51:13 of various designs over a very long period of time and now we had a main contractor in place then they were taking that forward to get the approval that was needed and that would unlock the whole issue about how much it

02:51:24 unlock the whole issue about how much it was going to cost what did you think simon lawrence meant by putting forward our case that acm is not an inferior product to zinc what case was he talking about did you think i think our case is ryden's case and what case

02:51:36 our case is ryden's case and what case do you think ryden was was putting that acm is not an inferior product to think and why do you think they needed or were having to put such a case i don't know i think this was

02:51:47 case i don't know i think this was this is appears to be simon trying to talk to a team that he's not been part of and agree a set of principles ahead of a meeting so i think he's just trying to set the

02:51:58 he's just trying to set the set an agenda here really can we then look at the first page of this uh email run

02:52:02 run which is the email that claire williams sense to david gibson copied to you on the same afternoon david our session with the planners read the cladding is this thursday

02:52:13 this thursday simon lawrence of ryden has just sent through the briefing below and i note in the final paragraph his comment read the planning discharge eight weeks on being the only point at which you can get certainty on the cladding costs and then and then she says i think we

02:52:25 and then and then she says i think we will have to take a view based on our response on thursday and perhaps get laura to bring pressure to bear to see if we can get some reassurance prior to the final approval otherwise our contract some will be hanging out until the early july

02:52:40 potentially uh the laura to which claire williams is referring there was that laura johnson i assume so

02:52:49 assume so did you understand so at the time yes would laura johnson be able to bring pressure

02:52:55 pressure to bear using claire williams's words to the rbkc planning department i think the relevant words there are guess some reassurance so i think um it sounds like we've been

02:53:08 so i think um it sounds like we've been in a dialogue with planners for a long time

02:53:11 time we're looking for some certainty around certain aspects of the design and the scope of works so we can move things on and claire's concern here is that there's

02:53:24 claire's concern here is that there's a potential eight week well there's been there's been eight weeks dialogue so far and um we need some clarity otherwise we're

02:53:32 we're uncertain about the costs and the way forward well mr madison i didn't ask you about what you thought the relevant words were i was asking you about the other words get laura to bring

02:53:45 the other words get laura to bring pressure to bear so can you please answer my question i'll ask it again would laura johnson be able to bring pressure to bear on the rbkc's planning department i think laura would be able to get some

02:53:57 i think laura would be able to get some reassurance on certain issues so i don't think it would necessarily mean pressure she would need should be able to talk to relevant people there and get some clarity about how they were thinking if there was a bit of an impasse between the tmo

02:54:10 bit of an impasse between the tmo or with ryden's and the planners well i'm just asking you about the expression get laura to bring pressure to bear i just want you to address that with me please

02:54:21 want you to address that with me please claire's words i can't really respond let me ask the question they're claire williams's words are you're right um she clearly thought that it was possible

02:54:30 possible for laura johnson to bring pressure to bear now

02:54:35 bear now would you agree with me that it would be entirely inappropriate for laura johnson to bring pressure to bear on the rbkc planning department um i think if it's to give somebody a

02:54:48 um i think if it's to give somebody a nudge to make something happen i don't see what

02:54:50 see what why that is inappropriate that wasn't the wording that claire williams used and making all allowances for her use of language from time to time she says perhaps get laura to bring

02:55:01 she says perhaps get laura to bring pressure to bear and my question is would you agree with me that it would be inappropriate for laura johnson to bring pressure to bear or even be asked to do so

02:55:12 bear or even be asked to do so in the way which is set out here i i don't understand what's been set out here so i can't really comment but i think

02:55:20 think my interpretation of this is that claire is trying to see if there's any way that we can move things on within the planning department it sounds like there's been a bit of a hold up there that's how i interpret it

02:55:32 hold up there that's how i interpret it right

02:55:33 right so i take it at the time when you saw these words in claire williams's email to david gibson you didn't think gosh i can't ask

02:55:40 can't ask laura johnson we can't ask laura johnson to bring pressure to bear on her own planning department do i take it that wasn't your reaction i can't remember my reaction i can't remember this email specifically

02:55:51 remember this email specifically did you tell claire williams or suggest to claire williams perhaps that she ought to

02:55:59 ought to get laura to bring pressure to bear on our bkc's planning department i think that um i think when i read this i

02:56:07 i i would have probably thought well let's have a meeting with the planners and see where we are so it didn't strike you that claire williams was suggesting something improper

02:56:17 improper no no

02:56:21 now the emails that we've been looking at were in preparation for a meeting on the

02:56:26 the thursday and the thursday was the 8th of may 2014.

02:56:31 may 2014. can we look at the minutes of that meeting

02:56:35 meeting this is a tmo double 0-833-991 now you're not i think recorded as being

02:56:46 now you're not i think recorded as being present at that meeting took place at rbkc's town hall and you're you're not there

02:56:51 there as we can see claire williams is there do you see she's the only representative of the ktmo there do you see that yes uh you do say in your first witness

02:57:04 uh you do say in your first witness statement that you saw these minutes and just to remind you of the reference that's paragraph 192 at page 37. i don't think there's a need to get back to it but can we take it but that's correct you saw these minutes at the

02:57:15 correct you saw these minutes at the time

02:57:16 time um i may have done well let's put it out of doubt um first witness statement please tmo 50892 page 37

02:57:31 paragraph 192 uh you say uh after the reference to the to the minutes you say which i did not attend but i saw the

02:57:42 which i did not attend but i saw the minutes recorded that a flat panel acm has proposed as the cladding material so it looks from your first statement that you did see these minutes yeah yes can we then go back to the minutes please

02:57:54 uh there they are okay let's look at uh the first page at item 1.2 and this is under the heading one material to facade and you can see under 1.2 a flat panel acm aluminium composite material was

02:58:06 acm aluminium composite material was proposed

02:58:07 proposed as the cladding material it was confirmed that the lifespan for this product is similar to that of the product previously suggested see that yes uh and on the second page of item 1.4

02:58:19 of item 1.4 you can see that it records that ss that's sarah scannell and eg i think that's edward george we're presented with a number of different color options for the acm

02:58:31 different color options for the acm ss to check how they look outside and confirm

02:58:34 confirm rbkc's preference to all by 16th of may 2014.

02:58:38 2014. and there's a list of samples underneath that can you see there are five samples see that yes now did you know at the time when you read this minute that those were all acm

02:58:49 those were all acm no you didn't

02:58:55 it did you know the time in general terms that at least from this point on if not earlier the building was going to be covered in aluminium composite material and nothing else all that remains

02:59:08 and nothing else all that remains sorry i'll let you answer the question i don't know but i think that it's clear here that um it's been proposed to the planners and um so

02:59:18 um so yeah yeah and that although questions of color and questions of fixing method remained outstanding as they did there was no question from this point on if not from earlier that the rain

02:59:30 on if not from earlier that the rain screen material would be acm i think once once it was established with planning that that was acceptable to them yes mr chairman it's one o'clock and this is i think an appropriate

02:59:41 appropriate moment right thank you very much yes well mr madison we're going to have a break now so that everyone can get some lunch

02:59:49 lunch we'll come back and resume at two o'clock please in the meantime please don't talk to anyone about your evidence or anything to do with it thank you all right thank you very much

03:00:06 thank you two o'clock please

03:00:42 you