Section one: Contracting authority/entity
one.1) Name and addresses
East Hertfordshire District Council
Wallfields, Pegs Lane
HERTFORD
SG138EQ
Contact
kirsten Brown
kirsten.brown@stevenage.gov.uk
Country
United Kingdom
Region code
UKH23 - Hertfordshire
Justification for not providing organisation identifier
Not on any register
Internet address(es)
Main address
one.4) Type of the contracting authority
Regional or local authority
one.5) Main activity
General public services
Section two: Object
two.1) Scope of the procurement
two.1.1) Title
Deed of Variation of Leisure Operating Contract
two.1.2) Main CPV code
- 92000000 - Recreational, cultural and sporting services
two.1.3) Type of contract
Services
two.1.4) Short description
East Hertfordshire District Council (the Council) intends to enter into a deed of variation with Sports and Leisure Management Limited (SLM) in relation to the Leisure Operating Contract dated 29 July 2022 (which commenced 1 January 2020) in order to appoint SLM as the Council's agent in delivering the leisure services at the Council's core leisure centre facilities.
The core leisure centre facilities include:
• Grange Paddocks Leisure Centre
• Hartham Leisure Centre
The date of the proposed modification is 1 December 2025.
two.1.6) Information about lots
This contract is divided into lots: No
two.1.7) Total value of the procurement (excluding VAT)
Value excluding VAT: £100,873,582
two.2) Description
two.2.2) Additional CPV code(s)
- 92000000 - Recreational, cultural and sporting services
two.2.3) Place of performance
NUTS codes
- UKH23 - Hertfordshire
two.2.4) Description of the procurement
East Herts Council (the Council) intends to enter into a deed of variation with Sports and Leisure Management Limited (SLM) in relation to the Leisure Operating Contract (Contract) dated 29 July 2022 (which commenced 1 January 2020) in order to appoint SLM as the Council's agent in delivering the leisure services at the Council's core leisure centre facilities.
The core leisure centre facilities include:
• Grange Paddocks Leisure Centre
• Hartham Leisure Centre
The date of the proposed modification is 1 December 2025.
two.2.11) Information about options
Options: No
Section four. Procedure
four.1) Description
four.1.1) Type of procedure
Award of a contract without prior publication of a call for competition in the cases listed below
- The procurement falls outside the scope of application of the regulations
Explanation:
This voluntary ex ante transparency notice (VEAT Notice) gives notice that the Council is entering into a deed of variation (Variation) to make certain changes summarised in this VEAT Notice. A procurement procedure is not necessary on the basis that the award of the Deed of Variation of the Contract is permitted pursuant to Regulation 72 of the Public Contracts Regulations 2015.
The Contract is for the operation and management of the Council's two leisure centres to ensure the Council can provide quality and affordable leisure services for the residents within the district, maintain the facilities and provide a financial return to the district to invest in core services.
The Contract will be varied to adopt an agency model for the future operation and management of the two sports and leisure facilities. Under the current Contract, SLM acts as Principal in the supply of leisure facilities to the public. Under the new agency model in the Variation, SLM would make supplies to the public as an Agent of the Council so that it is the Council providing leisure services to the public through its Agent.
This modification is being made in accordance with regulation 72(1)(e) of the Public Contracts Regulations 2015 on the basis that it is not substantial within the meaning of regulation 72(8). The proposed modification does not constitute a substantial modification and is permitted by regulation 72 of the Public Contracts Regulations 2015 because:
(a) the modification does not render the Contract materially different in character. The Variation concerns the same type, scope and nature of services which will be delivered at the same Council facilities to the Council's residents. The Contract was already for the operation of the Council's leisure facilities and the Variation makes contractual changes to establish an agency model so that SLM provides the Council's statutory leisure services to the public on the Council's behalf and other ancillary modifications. This generates VAT savings.
(b) the modification does not introduce conditions which would have (i) allowed for the admission of other candidates, (ii) allowed for the acceptance of another tender, or (iii) attracted additional participants in the procurement procedure. Delivering the Council's statutory leisure services as agent rather than outsourced contractor will not affect the physical operation of the leisure centres. 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.
(c) The modification does not change the economic balance in favour of the contractor in a manner which was not provided for in the initial contract. The new agency model and associated VAT benefits does not impact on SLM's operating costs and management fee under the Contract, which remains reflective of market costs. The agency model will provide a greater return than previously anticipated.
(d) the modification does not extend the scope of the contract.
four.1.8) Information about the Government Procurement Agreement (GPA)
The procurement is covered by the Government Procurement Agreement: No
Section five. Award of contract/concession
A contract/lot is awarded: Yes
five.2) Award of contract/concession
five.2.1) Date of conclusion of the contract
1 December 2020
five.2.2) Information about tenders
The contract has been awarded to a group of economic operators: No
five.2.3) Name and address of the contractor/concessionaire
Sports and Leisure Management Ltd
Leicester
Country
United Kingdom
NUTS code
- UKF2 - Leicestershire, Rutland and Northamptonshire
Companies House
2204085
The contractor/concessionaire is an SME
No
five.2.4) Information on value of contract/lot/concession (excluding VAT)
Total value of the contract/lot/concession: £100,873,582
Section six. Complementary information
six.3) Additional information
The Council appointed SLM to provide the leisure services pursuant to the Contract and Leases for the management and operation of the Council's two leisure centres.
The Contract Period is 15 years from 1 January 2020 with a 5 year possible extension by agreement.
The Council intends to enter a deed of variation with SLM to modify the Contract to appoint SLM as the Council's Agent.
The Deed of Variation will set out the scope of the agency appointment and the extent to which SLM will act as the Council's agent. SLM shall be appointed as the Council's Agent to provide the leisure services and maintenance of the Council's facilities but shall continue to carry out other services (specifically, the provision of food, beverages and retail services) as an outsourced supplier to the Council.
The Deed of Variation does not materially alter the risk position of the parties.
The Agent shall receive a variable management fee and reimbursement for its operating costs in providing the agency services.
The Council is guaranteed a Guaranteed Minimum Return of the revenue received each year on the Council's behalf having regard to the operating costs and management fee payable to the Agent.
The Agent shall have a licence to occupy each of the Council's facilities.
six.4) Procedures for review
six.4.1) Review body
High Court
London
Country
United Kingdom