Housing Executive releases 10 firms from maintenance contracts amid 'escalating construction costs'

The Housing Executive has announced it has reached agreement with 10 contractors to release them from planned maintenance contracts, as a result of "escalating construction costs."

In a statement, the Housing Executive said the prevention of job losses within the industry were "key" to the decision.

It said: "While this will lead to some delays in improvements to tenants’ homes, tendering will begin immediately to replace these contracts - the necessary budgets are available and work schemes are ready for delivery. "

The Housing Executive has over 130 different contracts in place to deliver a maintenance and improvement programme in excess of £200m.

These 10 contracts had been originally tendered for up to seven years in November 2020.

Grainia Long, Chief Executive of the Housing Executive, said: “As has been widely reported, the construction industry is suffering from severe inflationary pressures caused by rising material and fuel costs as well as labour and skills shortages. 

“Industry trade bodies have asked that contracting authorities be flexible in their approach to fixed price and fixed terms contracts.

“In response, the Housing Executive has sought to strike a balance between delivering for our tenants and preventing job losses and companies going under.

“Where the contracts and procurement law permit and where compelling evidence is provided, we have applied uplifts to contracts.

“In some cases, this has been relatively easy to manage.

“However, in others we have either not received sufficient evidence, or the contracts and wider procurement law has prevented us from applying the increased uplifts which contractors believe to be necessary.

“We have agreed to mutually terminate 10 contracts which were tendered in 2020 prior to the current inflationary price rises.

“This decision has been made in full agreement and consultation with the contractors.

“The alternative was to enforce the contractors to continue at the work which would have placed increased pressure on the contractors’ financial position, which could result in the contractors entering administration and putting a significant number of jobs at risk.

“Whilst many existing maintenance schemes remain unaffected and response contracts are currently in place, it does mean that some work we had planned to carry out in the next 12 months will be delayed until next year and when new contracts are in place.

“In forthcoming days we will be contacting tenants who are impacted by any delays to the planned schemes to their homes.

“I know this is extremely disappointing for those tenants who have been waiting for these improvements to begin.

“In some instances, this work has been subject to previous delays, which is especially frustrating.

“I would reassure everybody that work will be going ahead once we have new contractors in place."

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