LB Hillingdon - Deed of Variation in relation to leisure operating contracts of various leisure facilities

Concepts

• hillingdon
• sports facilities
• operation services
• leisure operating contracts
• leisure facilities
• various leisure facilities
• operating contracts
• leisure operating contracts, procurement agency agreements
• the leisure operating concession contracts
• the leisure operating contracts

Location

Hillingdon

Description

The London Borough of Hillingdon (the Authority) intends to enter into a deed of variation with Greenwich Leisure Limited (the Contractor) in relation to the leisure operating concession contracts for the Authority's four leisure facilities (the Underlying Contracts), for the adoption of an agency model for the future management of leisure facilities. The Underlying Contracts were originally procured under Concession Notice 118316-2019, published on 13 March 2019.

Total Quantity or Scope

The Authority appointed the Contractor to provide the leisure services pursuant to Leisure Operating Contracts, Procurement Agency Agreements, and Leases, for the management and operation of the Council's leisure portfolio. The Authority intends to enter a deed of variation with the Contractor to modify the Leisure Operating Contracts, the effect of which will be the following: • To identify the agency agreement between the parties, the extent to which the Contractor will act as the Authority's Agent, and areas where it will act as Principal; • Reference to the Contractor acting as the Agent of the Authority will be inserted into the definition of Leisure Services; • To articulate a process by which the Contractor will communicate and transfer the customer income collected as the Agent; • To extend the expiry date to 22 February 2035; • The Council agrees to make available the sum of £100,000 per year improvements to the fabric or equipment within the facilities that will benefits users; and • The modifications give effect to other ancillary changes to the Underlying contracts to adopt the agency model, that are not considered to be substantial.

Award Detail

CPV Codes

• 92610000 - Sports facilities operation services
• 45212290 - Repair and maintenance work in connection with sports facilities
• 45259000 - Repair and maintenance of plant
• 50000000 - Repair and maintenance services
• 50324100 - System maintenance services
• 50700000 - Repair and maintenance services of building installations
• 55520000 - Catering services
• 71314200 - Energy-management services
• 72500000 - Computer-related services
• 72511000 - Network management software services
• 77314000 - Grounds maintenance services
• 79313000 - Performance review services
• 79342300 - Customer services
• 79952000 - Event services
• 90710000 - Environmental management
• 90910000 - Cleaning services

Indicators

Legal Justification

Explanation: This VTN gives notice that the Authority is entering into a deed of variation (the "Contract") to extend the duration of existing leisure operating contracts between the Authority and the Contractor and to make certain changes summarised in this VTN. A procurement procedure is not necessary on the basis that the award of the Contract is permitted pursuant to regulation 43(1)(e) of the Concession Contracts Regulations 2016. The Contract will have the effect of modifying the Underlying Contracts in accordance with Regulation 43 of the Concession Contracts Regulations 2016. The Underlying Contracts concern the provision of a range of management and related services, by the Contractor, in relation to five sports and leisure facilities. The Underlying Contracts will be varied for the adoption of an agency model for the future management of leisure facilities in relation to the outsourcing arrangements for the leisure facilities. Under the current structure, the Contractor acts as Principal in the supply of leisure facilities to the public, so that the Authority is not making the supplies of leisure services. Under the new agency model, the Contractor would make supplies to the public as an Agent of the Authority. This modification is being made in accordance with regulation 43(1)(e) and 43(9) of the Concession Contracts Regulations 2016. Namely, the proposed modification is not substantial within the meaning of regulation 43(9) on the basis that: 1. the modification does not render the Underlying Contracts materially different in character - the proposed modification remains limited to the same type, scope and nature of services, where the operating cost risk remains with the Contractor, and the services will be delivered to the same facilities. The modifications only concern contractual changes to establish an agency model for VAT purposes and other ancillary modifications. 2. the Council has satisfied itself that the modification does not introduce conditions which would have (a) allowed for the admission of other candidates, (b) allowed for the acceptance of another tender, or (c) attracted additional participants in the procurement procedure - the change to an agency model for VAT purposes does not change the service requirement or the way in which those services are provided, and is unlikely to have changed the outcome of the procurement. 3. The modification does not change the economic balance in favour of the contractor in a manner which was not provided for in the contract – The Authority has satisfied itself that the new agency model and VAT arrangement does not impact on GLL's payment under the Underlying Contracts, which remains reflective of market costs and does not amount to an over-compensation of the services to be provided. The agency model will allow for a more certain financial position to the Authority and will provide a greater surplus share than previously anticipated. 4. As per our comments at 1. above, the modification does not extend the scope of the contract. For the reasons set out above, the proposed modification does not constitute a substantial modification and is permitted by regulation 43(1)(e) and 43(9) of the Concession Contracts Regulations 2016.