Public procurement notice: Modification Of A Contract/Concession During Its Term
Published: 2020-12-23
Buyer: Homes England
Country: UK
Contract type: Works
CPV classification: 45210000: Building construction work | 45211100 | 45211300 | 45211340 | 45211350

Technical requirements: The original project (OJEU contract notice reference 2014/S 073-125096) comprised of mixed commercial and private/affordable dwellings. Due to circumstances which a diligent contracting authority could not foresee, further changes are required to the Phase 1 Lease in order to ensure that Phase 1 can be delivered. The changes are detailed in VEAT notice reference 2020/S 197-478503. These changes do not require a new procurement procedure, and Directive 2014/24/EU does not apply to them, for the reasons detailed below.
The amendment to the Minimum Development Threshold termination date is therefore a result of the Covid-19 pandemic and is needed to enable the developer to secure the required funding to carry out the works so as to achieve the Minimum Development Threshold and dispose of the build to rent phase of the development to the forward funder.
Homes England considers that this modification does not alter the overall nature of the Phase 1 Lease.
For the avoidance of doubt, the modification is not considered by Homes England to increase the value of the Phase 1 Lease and, as such, the value of the modification is less than 50 % of the original contract value.
As described in the original contract notice published on 12 April 2014 (OJEU Reference: 2014/S 073-125096).
The following modification has been made to the Phase 1 Lease in accordance with Regulation 72(1)(c) of the Public Contracts Regulations 2015. The need for modification is brought about by circumstances which a diligent contracting authority could not foresee, specifically the Covid-19 pandemic and the significant effect this would have on the development finance market. This modification is contained within a Deed of Variation dated 17 December 2020. Other, non-substantial modifications have also been made in this Deed of Variation, as noted in the VEAT notice referenced above (at II.2.4), and not detailed in this notice.
The termination date for failure to hit the minimum development threshold in the Phase 1 Lease was extended from 30 March 2023 to 31 March 2024 (and then as shall be further extended by a period equivalent to force majeure extensions of time certified under the building contract, subject to an ultimate revised drop dead date of 31 March 2026). This is in light of the significant delay to start on site caused by the Covid-19 pandemic and the consequences this will have on the developer's ability to tender the building contract, secure the necessary development finance and accommodate the risk of ongoing disruptions associated with the pandemic. This modification is in accordance with Regulation 72(1)(c) of the Public Contracts Regulations 2015 for the reasons explained further below in VII2.2).
A diligent contracting authority could not have foreseen the Covid-19 pandemic and the significant effect this would have on the development finance market. It remains a real concern that further lockdowns, whether local or national, could apply over the course of the development period. In order to facilitate the developer being able to secure forward funding and to accommodate the new Covid-19 extension of time requirements of building contractors in the current market, it is necessary to build in the extended development period to give sufficient comfort on timings in view of the ongoing Covid-19 risk the market is now faced with. This is notwithstanding the fact that commencement of development on the site has been delayed by Covid-19. Further detail is included at section VI.3.


Winner: Cedar (Maple Oak) Ltd