Public procurement notice: Voluntary Ex Ante Transparency Notice
Published: 2016-09-22
Buyer: The Council of the Borough of North Tyneside
Country: UK
Region: Tyneside
Contract type: Works
Procedure: Contract award without prior publication
CPV classification: 45210000: Building construction work | 71220000
Estimated value: 4912729 GBP
Award criteria: Lowest price

Technical requirements: Agreement relating to the development of land at Backworth Primary School, Title Number TT338161 — Section 106 of the Town and Country Planning Act 1990.
The proposed contract will be a planning obligation pursuant to Section 106 of the Town and country Planning Act 1990 relating to the proposed development at Backworth Primary School, Title Number TT338161 (‘the Development’). it will contain a series of commitments by the Developer, conditional on implementation of the Development (entirely at the discretion of the Developer) and progress of the Development for delivery of mitigating measures including the design and construction of a primary school. The Developer also has the choice of providing land to North Tyneside Council (‘Contracting Authority’) plus funding so that the Contracting Authority may design and construct the primary school instead.
In the proposed agreement (‘the Section 106 Agreement’) the Developer is afforded the choice of providing: a. Land for a primary school and funding for the construction which does not amount to a public works contract because there is no contract with the Developer for works to be undertaken b. The Developer undertaking the construction of the new primary school and then the Authority will take a 125 year lease of the premises. The agreement where option b is adopted for the new primary school to be built by the Developer does not constitute a public works contract on 2 grounds. 1. The essential ingredient of a public works contract is that it is for pecuniary interest — see Regulation 2 of the Public Contracts Regulations 2015 (‘the Regulations’). The Advocate General's opinion on European Commissionaire (Kingdom of Spain) (2011) CR GO attempts to provide a definitive statement of the meaning of ‘pecuniary interest’ concluding that it implies that the Contracting Authority needs to use its own funds either directly or indirectly. Direct financing will occur when the Contracting Authority uses public funds to pay for the works or services in question. Indirect financing will occur when the Contracting Authority suffers economic detriment as a result of the method of financing the works or services. In this case there is no direct financing and as the grant of planning permission does not amount to pecuniary interest (see Hulmut Muller GMbHv Bundesanstalt Fur Immobilienaufgaben), there is no consideration given in return for the requirement to construct a school. 2. It is also a requirement of a public works contract that there must be a legally enforceable obligation to carry out works or work. The High Court determined in R (Midlands Co-operative Society Limited) v Birmingham CityCouncil (1) Tesco Stores Limited (2) that where the building obligations in an agreement pursuant to Section 106 Town and Country Planning Act 1980 (‘S106 Agreement’) were conditional upon the developer commencing the development which he was not legally obliged to do, there was no public works contract. The Section 106 agreement in this case is a S106 Agreement and the building obligations will indeed be conditional upon the Developer commencing and then progressing the development which it will not be legally obliged to do. Notes: 1. The estimated value of the school works is 4 912 729 GBP; 2. In the S106 Agreement, the Developer will agree to undertake a transparent and impartial procurement process for the school works.