The March 18, 2014 meeting was not taped, but Rydon later agreed to abandon landscaping, lower the cost of windows and replace the more expensive zinc siding panels with the alternatives. aluminum which became the main cause of the spread of the fire of June 2017 which claimed 72 lives.
The exercise reduced the budget from £ 9.2million to £ 8.4million. The saving of £ 293,368 on siding was less than £ 2,500 per apartment.
Gibson told the inquiry he had disregarded legal opinions that such secret negotiations would violate European procurement rules because Rydon had yet to be officially appointed after a tender public.
Rydon had previously offered a price cheaper than two competing bids and £ 800,000 less than estimated by the owner’s own advisers. But the investigation found that the owner still wanted to increase his savings before awarding the contract. Neither the architect nor the homeowners’ building advisers were notified of the meeting.
The investigation has already learned how the owner of the tower, the Royal Borough of Kensington and Chelsea, lost patience with the first contractor appointed to the reclamation project, Leadbitter, when he said the project was going to cost 1.2 million pounds over budget.
It also emerged that Peter Maddison, Director of Assets and Regeneration at TMO, had a long relationship with Rydon’s Director of Renovation Stephen Blake, having previously worked with him. Blake boasted in an email 10 days before the cost reduction meeting that he had been “informally informed [by Maddison] we are in pole position – ours to lose ”.
On the same day as the meeting, Rydon was named as the preferred bidder in an official letter which did not mention that he had agreed to cut at least £ 800,000 from his official bid. TMO lawyers had warned that such negotiations would violate EU regulations, saying “value engineering” could take place after a contract is awarded, but not before. Gibson read and understood the legal advice and knew the negotiations he had with Rydon were contrary to the advice, he said.
“There was a good reason not to tell the other bidders that one of the reasons for the contract award was that Rydon had agreed to reduce their price by around £ 800,000,” said Richard Millett QC, lawyer to the inquiry. “That’s because if they found out that the TMO was discussing cost savings with Rydon prior to award, it increased the risk of a challenge to the award decision.”
“Correct,” Gibson said.
Gibson had undertaken “an inappropriate and compromised process with Rydon” and knew it was wrong, Millett suggested during cross-examination. This explains why Gibson did not mention the meeting in his witness statement at the inquiry, which said the tendering process was “rigorous and transparent” and conducted under EU rules. .
Millett suggested it was “misleading”. “I don’t agree,” Gibson said.
The investigation is continuing.