The Senedd has set out the next steps in its multi-million-pound search for offices in Cardiff Bay, with a final decision expected by the end of this year.
Elin Jones, the Senedd's speaker or Llywydd, outlined three options: staying in Tŷ Hywel, and refurbishing it; a new building; or a combination of a new building and an existing office.
With the lease on Tŷ Hywel, the red-brick building beside the Senedd, expiring in 2032, the Senedd has issued a contract notice after deciding to go ahead with procurement.
Tŷ Hywel, which houses Senedd members' offices, is leased from Equitix, a London-based infrastructure fund manager that bought the freehold from Kuwaiti investors in 2019.
Under the £2 million-a-year lease, which was valued at £42 million in 2021, the Senedd is required to replace end-of-life items such as boilers, doors and windows.
The cost of replacing the 30-year-old windows was estimated at £6 million in 2020.
'Bay 2032'
Concerns about the costs and an opportunity to achieve better value for money with the 25-year lease expiring, prompted the Senedd to examine alternative options.
The Senedd commission, which is the corporate body responsible for the estate and support services, has allocated £6.7 million towards the "Bay 2032" project to date.
In the contract notice, which was issued on Tuesday, the commission is seeking to procure offices of around 11,000 square meters adjacent to the glass Senedd building.
The office space would need to accommodate around 900 members of staff.
The successful bid must also allow for direct links as with Tŷ Hywel, which is linked to the Senedd by glass walkways, and a secure entrance for airport-style security checks.
In a letter to the Senedd's finance committee, Ms Jones stressed no decisions have been made on the three options which were identified by external professional advisers.
'Doing nothing is not an option'
Ms Jones told Senedd members that commissioners decided to proceed to the procurement phase of the Bay 2032 project at a meeting on January 20th.
She wrote: "This means that a contract notice is being issued today setting out specifications in terms of space and requirements that will need to be met by any prospective bidders."
"The commission fully recognises the various pressures on public finances. However, due to the current lease on Tŷ Hywel expiring in 2032 – doing nothing is not an option."
The Senedd's speaker added: "A procurement process is the only way for us to secure the best value outcome for the people of Wales."
The commission's £83 million budget for the 12 months from April – including a 16% increase for Senedd reforms, public-sector pay and infrastructure – was signed off in November.
Under the 2025/26 budget, an extra £800,000, on top of £1.8 million this year, was allocated to renovating the Senedd's chamber or Siambr to accommodate 36 more members from 2026.
'Value for money'
A spokesperson for the Senedd commission said: "The lease on Ty Hywel runs out in 2032 and there are several potential options for the long-term office needs of the Senedd."
"We have a narrow window of opportunity to explore these options thoroughly and credibly to ensure the best value for taxpayers' money."
"We are conducting a procurement process in line with HM Treasury advice to identify the best long-term option. "
"We recognise that times are incredibly tough across Wales and our absolute priority is securing the very best value for money."
The contract notice will be open until March 3rd then a "competitive dialogue" will follow with qualified bidders to find solutions and assess the costs.
Bidders will have six or seven months to prepare their pitches, with a final decision expected to be made by the end of the year.
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