Somerset County Council Waste Project

Concepts

• refuse and waste
• somerset county council waste project
• viridor waste management limited
• taunton
• somerset county council
• valencia waste management limited
• water supply and waste
• project management services
• syracuse waste limited
• municipal waste strategy

Location

Somerset England

Description

Somerset County Council (“Council”) awarded a contract to Viridor Waste Management Limited (“Viridor”) in 2006 following a procurement for project management services for the delivery of the Council’s municipal waste strategy and its landfill directive obligations to divert biodegradable municipal waste from landfill (the “Contract”). The procurement was advertised in OJEU Contract Notice (2004/S 204-174980). This also encompassed the delivery of waste services and development of new waste treatment facilities - details can be found in the OJEU Contract Notice. Viridor has subsequently changed its name to Valencia Waste Management Limited “(VWML”). The Council is intending to enter into a novation agreement with Syracuse Waste Limited (No. 13269384) (“Syracuse”) which is a contractor successor to VWML. This will result in Syracuse replacing VWML as the party to the Contract for the remainder of the term.

Total Quantity or Scope

The Contract was entered into on 14 May 2006 for a duration of 191 months with an est. value of £288m (and a max. duration of 299 months) for the services referred to above. The proposed novation will not seek to extend the duration beyond the max. duration of the Contract and will expire on 31 Mar 2031. Viridor transferred the resources, assets and staff (engaged in providing the services) into a newly created wholly-owned subsidiary, Syracuse, on 31 Jul 2021. On 31 August 2021 Biffa Waste Services Limited acquired the entire share capital of Syracuse. The Council intends to novate the Contract to Syracuse with the remaining term running until 31 Mar 2031. The novation will take place no earlier than the expiry of 10 days from the publication of this notice. The £288m value in II.1.7) represents the est. value of the Contract when it was entered into on 14 May 2006 on the basis of a ~£17m value per annum across 191 months. See II.2.14) for details of est. remaining value.

Award Detail

CPV Codes

• 90500000 - Refuse and waste related services
• 71800000 - Consulting services for water-supply and waste consultancy
• 79723000 - Waste analysis services
• 90512000 - Refuse transport services
• 90513000 - Non-hazardous refuse and waste treatment and disposal services
• 90513100 - Household-refuse disposal services
• 90514000 - Refuse recycling services
• 90520000 - Radioactive-, toxic-, medical- and hazardous waste services
• 90530000 - Operation of a refuse site
• 90531000 - Landfill management services
• 90533000 - Waste-tip management services

Indicators

Legal Justification

The Council considers that it is permissible to enter into a novation agreement with Syracuse on the basis that it falls within scope of Regulation 72(1)(d)(ii) of the Public Contracts Regulations 2015 (as amended) (“PCR”) which permits a new contractor to replace the one initially awarded the Contract as a consequence of universal or partial succession into the position of the initial contractor, including following a takeover, merger or acquisition, of another economic operator that fulfils the criteria for qualitative selection initially established in the original procurement and the Contract does not entail other substantial modifications to the Contract. The Council considers that Syracuse is a universal successor to Viridor and takes its position through the proposed novation because: (i) the entirety (or a substantial amount) of the business that was responsible for delivering the services now vests in Syracuse; (ii) the entirety (or a substantial amount) of the resources, assets and staff committed by Viridor in its original tender proposal have been transferred to Syracuse and are available to be deployed in the continued delivery of the services to the Council; and (iii) all material essential service performance features and commitments of VWML’s original pre-qualification response and tender proposal remain intact and will continue to be performed by Syracuse. Further to the above, the Council is intending to enter into a novation agreement with Syracuse which is the contractor successor to VWML, whereby Syracuse holds the entirety (or a substantial amount) of the resources, assets and staff (engaged in providing the services to the Council which were originally awarded the Contract). The novation agreement will result in Syracuse replacing VWML as the party to the original contract for the remainder of the term (until 31 March 2031), with an estimated remaining value of £115m. Whilst the proposed novation will not involve any other substantial modifications to the Contract, the Council is providing details of the historical modifications that have occurred to-date which it does not consider to be substantial and therefore did not require a re-procurement. See VI.4.3) for further information.

Other Information

The Contract has an initial term of 191 months (~16 years) with an option to extend for 9 years (which has been invoked). The remaining term on the novated Contract will be ~108 months with an estimated remaining value of £115m on the basis of ~£12m value per annum. The per annum value is lower due to the March 2017 variation that removed residual waste treatment and disposal from the services. • V20 – execution of the contract extension clause in lieu of financial savings for the Council. Minimal operational impact and annual contract saving ranging from £300k in 2018/19 to £800k per annum from 2022/23 to the extent of the contract. Other modifications include a rebase of the minimisation bonus, revised agreement of how to share future contract savings, temporary increase in the contractor default cap and a further modification in recycling site operational hours • V21 – Anaerobic Digestion Services. Price amendment for additional tonnages to assist in budget reductions. No operational impact. • V22 variation to formally capture existing practices in to the contract. Minor operational impacts. No financial implications