The city council has awarded a multi-million pound project to carry out work around the Broadmarsh area to a company it also owns.
Many council contracts are put out to tender – essentially advertising to companies which then put bids in to the council before a winner was chosen.
However the latest contract was not advertised, but awarded directly to Thomas Bow City Asphalt, a company which the city council bought last year.
The city council says by law it did not have to run a tendering process due to the £4.5 million contract not exceeding the current threshold of £4,733,252.
However the Conservatives have strongly criticised the move, accusing the council of using a loophole.
• Nottingham City Council purchases Thomas Bow City Asphalt civil engineering business
The work is part of an effort to transform the public area around the Broadmarsh, which had been planned before Intu went into administration leaving the shopping centre half-finished.
A council report says: “The proposed value of the contract is £4.5million, which is below the current threshold at which an OJEU tender is required, and so a direct award (of the contract to Thomas Bow)… does not conflict with either national procurement legislation or the council’s rules.
“However, given the value, care must be taken to ensure that any variations to the contract or additional works leading to an increase in value do not exceed the threshold, as that may create a breach of the Public Contracts Regulations 2015.”
On the detail of the work to be carried out, the council report says: “Changes to alter the way traffic uses the highway network around the Broadmarsh area have been ongoing since 2016.
“These highway changes form part of the Southside Transport Strategy and will remove all traffic from Collin Street, and general traffic from Canal Street.
“These closures are scheduled to take place in August 2020 and will enable delivery of public realm thereafter.
“The Executive Board meeting held on June 16 approved acceptance of a Department for Transport Grant Award of £153million for the delivery of the Transforming Cities Funding (TCF) Tranche 2 Programme.
“This programme includes a specific allocation of £20million that will enable delivery of improved public realm around the Broadmarsh Area, linking new developments across the south of the city including the Railway Station, new college, new car park and bus station, and redeveloped castle.
“It is considered that use of Thomas Bow for this contract represents value for money for delivering a project of this size within the council’s project timescales.
“Thomas Bow also currently delivers works under a number of contracts awarded by the council that have been tested in the market, and pricing will be subject to the scrutiny of the council’s professional team.”
Councillor Andrew Rule is the leader of the Conservative group, and said “It’s amazing a little over one week after a damning public interest report is published criticising the council’s political desire to make its companies succeed, ahead of achieving value for money for council tax payers, the political leadership have again seen fit to award a contract for services without any formal tendering process to one of its own companies.
“While there may be some legal loopholes it is using to do this with the spotlight firmly fixed on how council owned companies are run you would think the political leadership of the council would match their acceptance of external auditors findings with the appropriate action in practice – in this case it seems not.”
A council spokesman said: “The Broadmarsh regeneration programme works across a number of sites joined up by our public realm proposals, and required a developer to start quickly due to the completion dates of projects nearby.
“Nottingham City Council appointed a contractor for the reasons set out within the report and sought the required advice before taking this decision forward.
“Thomas Bow had been providing early advice and input as we formed the public realm scheme and was best placed to deliver the required improvements to join up these elements of the Southside regeneration scheme in a timely way.”
