Total Asset Management Contract

Concepts

• hemel hempstead
• construction work
• dacorum borough council
• osborne property services limited
• total asset management' service delivery
• total asset management contract
• veat notice
• lightning protection equipment
• proposed extension of the contract
• wide housing repairs

Location

Borough of Dacorum in Hertfordshire

Description

On the 1st July 2014, Dacorum Borough Council ("the Council") entered into a contract for a period of up to 10 years with Osborne Property Services Limited ("Osborne") for 'total asset management' service delivery of Borough wide housing repairs works and services, including maintenance and improvements (the "Contract"). This was advertised on the OJEU under 2013/S 030-046801 (dated 12 February 2013). The Contract includes responsive repairs, void repairs and planned improvements. This VEAT notice relates to a proposed extension of the Contract for up to a further 2 years (1+1) with a longstop date of 30th June 2026 to allow the Council to conduct a re-procurement exercise for the long-term successor to the Contract.

Total Quantity or Scope

Dacorum Borough Council intends to extend the term of the Contract with Osborne Property Services Limited for a bridging period of up to a twenty-four months (1+1) to allow it to conduct a re-procurement exercise for the long-term successor to the Contract. The extension will provide the Council with a sufficient period of time to run a comprehensive market-engagement, commissioning and re-procurement exercise, and to factor in the current high degree of risk and uncertainty in the construction and housing repair sector, with the new service to commence no later than 1st July 2026.

Award Detail

CPV Codes

• 45000000 - Construction work
• 31216100 - Lightning-protection equipment
• 31216200 - Lightning conductors
• 34928200 - Fences
• 44221220 - Fire doors
• 45210000 - Building construction work
• 45220000 - Engineering works and construction works
• 45232430 - Water-treatment work
• 45261410 - Roof insulation work
• 45261900 - Roof repair and maintenance work
• 45262600 - Miscellaneous special-trade construction work
• 45312310 - Lightning-protection works
• 45312311 - Lightning-conductor installation work
• 45320000 - Insulation work
• 45421100 - Installation of doors and windows and related components
• 45421130 - Installation of doors and windows
• 45421132 - Installation of windows
• 45421140 - Installation of metal joinery except doors and windows
• 45451000 - Decoration work
• 50700000 - Repair and maintenance services of building installations
• 51110000 - Installation services of electrical equipment
• 71220000 - Architectural design services
• 71240000 - Architectural, engineering and planning services
• 71250000 - Architectural, engineering and surveying services
• 71300000 - Engineering services
• 71420000 - Landscape architectural services
• 79512000 - Call centre
• 90650000 - Asbestos removal services

Legal Justification

The existing Contract with Osborne commenced on 1st July 2014 and expires on 30th June 2024. The Council intends to extend the contract by up to 24 months, with provision to terminate earlier, to allow the Council time to run a comprehensive re-procurement exercise for the appointment of a long-term successor to the Contract. The total estimated value of the original Contract was between £200m and £300m and the cost of the proposed two year extension is between £40m and £50m. The Council's position is that the proposed extension is a permitted modification under Regulation 72(1)(e) of the Public Contract Regulations 2015 (as amended) ("PCR") (non-substantial modifications) and that none of the conditions set out in Regulation 72(8) are met. With reference to Regulation 72(8)(a), the proposed modification will not render the Contract materially different in character from the one initially concluded as there will be no change to the services or works to provided for the extension period (either in terms of the nature of the works/services or the quantity). The modification is an extension of term only. With reference to Regulation 72(8)(b), the Council does not consider that the modification introduces conditions which, had they been part of the initial procurement procedure, would have- (i) allowed for the admission of other candidates than those initially selected, (ii) allowed for the acceptance of a tender other than that originally accepted, or (iii) attracted additional participants in the procurement procedure. The only effect of the modification is to extend the term of the Contract and so the Council does not consider that there would have been any change to the outcome of the original procurement. With reference to Regulation 72(8)(c), the modification will not change any of the commercial terms of the Contract, and so there will be no change to the economic balance of the contract. The Council does not consider that the modification will extend the scope of the Contract considerably within the meaning of Regulation 72(8)(d) in the context of the Contract as a whole (10 years). No change is proposed to the nature or quantity of the works and services and no new services or works will be included in the scope. The period of the extension may be reduced if the procurement exercise is completed before the end of the extension period. Regulation 72(8)(e) of the PCR is not engaged as there is no change to the contractor. The purpose of the modification is to provide a 'bridging period' in order to conduct a comprehensive re-procurement exercise for the long-term successor to the Contract. The modification will therefore allow continuity of service and value for money for the Council while it conducts this exercise, the scope of which will include market testing, assessment of risks and uncertainty within the construction and housing repair sector, corresponding development and design of procurement strategy, managing the orderly wind-down and exit of the Contract with the existing supplier and mobilisation of the new contract.

Other Information

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