Public procurement notice: Modification Of A Contract/Concession During Its Term
Published: 2019-12-20
Buyer: Ministry of Justice
Country: UK
Contract type: Services
Procedure: Negotiated procedure
CPV classification: 75100000 | 75230000 | 75231240 | 75240000 | 80400000

Technical requirements: Transforming Rehabilitation: Contracts for the Services of Rehabilitative Services and Offender Management
Following publication of contract notice ref 2013/S 183-315991, successful bidders acquired the Community Rehabilitation Companies (CRCs) and contracts were awarded on 5.12.2014 for the delivery of probation services, with contracts entered into on 18.12.2014. The contracts were for a 7-year initial term with an option to extend for a further 3 years. The contracts are due to expire on 4.12.2020, following service of termination notices in December 2018.
The GBP (£) figures quoted within the original contract award notice were the maximum anticipated, total, real value of the contracts if the contracts had been extended to the fullest amount allowed under the contract and payment by results had been paid at the maximum level in all periods, including all extensions.
Lot 21 (KSS CRC) was awarded to Seetec Business Technology Centre Ltd. In February 2019, the KSS Contract was modified (ref 2019/S 041-093651) to add Lot 11 (Wales CRC), Lot 13 (BGSW CRC) and Lot 14 (DDC CRC) as the supplier to whom they had originally been awarded, Working Links (Employment) Ltd, had gone into administration.
The authority took the policy decision to bring offender management services (OM) back in-house, as documented in the ‘Strengthening Probation, building confidence’ consultation response published in May 2019. As part of the KSS Contract modification (ref 2019/S 041-093651) a clause was inserted relating to the intention to transfer the provision of OM Services to HMPPS within 9 months of the contingency date. OM Services in Wales were transferred to HMPPS on 30.11.2019 following the publication of a voluntary ex-ante transparency notice on 31.10.2019.
This notice relates to the modification of the Lot 21/Kent Surrey and Sussex CRC (KSS) contract (as previously modified) (the ‘Contract’) to bring OM in Wales in-house. The authority considers the modification of the Contract without prior publication of a contract notice is permitted by the Public Contracts Regulations 2015 (PCR) and Directive 2014/24/EU and has signed the modification on that basis. The Contract has been modified in accordance with regulation 72(1)(e)/article 72(1)(e) and regulation 72(1)(c)/article 72(1)(c) and accordingly does not in the Authority's view amount to the award of a new contract and/or an unlawful substantial change.
The need for modification has been brought about by external circumstances which a diligent contracting authority could not have foreseen at the time the contract was entered into, namely the change of policy reflected in the consultation response referred to in Section II.2.4) above. That in turn arose in part from the challenges identified in the authority's consultation document ‘Strengthening probation, building confidence’ dated July 2018. The modification does not alter the overall nature of the Contract and there is no increase in price exceeding 50 % of the value of the original Contract: rather, there is a price reduction.
The modification of the Contract is not substantial. OM for Wales represents approximately 6 % of the aggregate value of the Contract (as modified in February 2019) over its lifetime. The modification does not render the Contract materially different. The contractor is still providing a range of OM and non-OM services. The modification removes OM from just 1 of 4 Contract Package Areas (CPAs) over which the Contract extends (Wales). Non-OM services will continue to be provided under the Contact for all 4 CPAs. For the same reason, the modification introduces no conditions that would have realistically allowed for the admission of other candidates, allowed for the acceptance of a tender other than that originally accepted, or attracted additional participants, had it been done as part of the original procurement procedure. The modification will not change the economic balance of the Contract in favour of the contractor in a manner that was not provided for in the original Contract. The modification does not increase the scope of the Contract, but rather, reduces it.
The authority took the policy decision to bring OM services back in-house, as documented in the ‘Strengthening Probation, building confidence’ Consultation response published in May 2019. As part of the KSS Contract modification (ref 2019/S 041-093651) a clause was inserted relating to the intention to transfer the provision of OM Services to HMPPS within 9 months of the contingency date. OM Services in Wales were Transferred to HMPPS on 30.11.2019 following the publication of a voluntary ex-ante transparency notice on 31.10.2019.
— removing reference to OM from Schedule 7 (Service Specification), 8 (Service Delivery) and 10 (Interfaces),
— altering Schedule 11 (Payment mechanism) removing the fee for service and payment by results mechanism, altering the compensation on termination amounts and altering the Fee for Use,
— altering Schedule 20 (Management Information) to remove reference to OM and insert new reporting requirements,
Removing OM in Wales from the Contract reduces the value of the Contract by approximately 12 400 000 GBP. The value of the Contract at contract award on 18.12.2014 was 372 000 000 GBP. The value of the Contract following the February 2019 modification (ref 2019/S 041-093651) was 261 233 000 GBP. The value of the Contract following this modification is 248 833 000 GBP. The remaining value of the Contract running from December 2019 to December 2020 would have been 85 410 501 GBP without removing OM for Wales and will be 73 010 501 GBP as a result of this modification.
Please refer to Section VII.1.4) above. The PCR implements Directive 2014/24/EU. References to Regulation 72(1)(c) of the PCR also refer to Article 72(1)(c) of the Directive and references to Regulation 72(1)(e) of the PCR also refer to Article 72(1)(e) of the Directive.
The ‘updated total contract value before the modifications’ stated in Section VII.2.3) below reflects previous changes to the Contract as set out in Section II.2.4) above and in the modification notice: 2019/S 041-093651. This sum differs from the original contract value of 372 000 000 (as stated in the contract award notice ref: 2015/S 027-045770) and reflects various previous changes including the fact the contract duration has been shortened and payments over the life of the contracts to date have been less than originally anticipated.


Winner: The Kent, Surrey and Sussex Community Rehabilitation Company Ltd