Public procurement notice: Contract Award Notice
Published: 2019-04-08
Buyer: Durham Tees Valley Airport Ltd
Country: UK
Contract type: Services
Procedure: Negotiated without a prior call for competition
CPV classification: 63731000 | 70000000 | 79000000 | 79420000
Estimated value: 14000000 GBP
Award criteria: Lowest price

Technical requirements: A strategic partnering agreement for the provision of various strategic partnering services to Durham Tees Valley Airport Ltd (the Airport Company).
Stobart Holdings Ltd (SHL) has made an equity subscription in the ultimate holding company of the company (JVCo) that owns 89,1 % of the Airport Company. The remaining equity in JVCo is held by Tees Valley Combined Authority (TVCA). As part of the arrangements, SHL has entered into a Shareholders Agreement with TVCA to govern that investment, pursuant to which, amongst other things, the Airport Company cannot enter into an agreement for the provision of strategic partnering advice in relation to the services required to operate the Airport and the development of operations at the Airport without the prior written consent of each of the Shareholders, including SHL.
The Airport Company has entered into a Strategic Partnering Agreement (SPA) for the provision of various strategic partnering services in relation to the operation of the Airport and the development of operations at the Airport. London Southend Airport Company Ltd (LSACL) will provide the strategic partnering services. LSACL is a wholly owned subsidiary of SHL and holds the relevant skills and expertise necessary to provide the strategic partnering services to the Airport and will provide the following services (amongst others) in respect of the Airport pursuant to the SPA:
1) The development of an agreed ongoing strategy and the provision of a guidance and oversight role for the execution of such agreed ongoing strategy for Airport Operations (all aeronautical and non-aeronautical operations at the Airport including, aviation development, finance, retail and commercial, sales and marketing, health and safety, operations direction, IT support, safety, security, commercial operations, human operations (HR, payroll, legal, etc.), the airport operations centre, air traffic control, transitional services and property development);
2) Guidance and oversight of the management of the Airport Company to drive improved productivity, profile and performance of Airport Operations in accordance with the relevant Business Plan;
3) All strategic partnering guidance, advice and support relating to the performance, development and improvement of Airport Operations;
4) Exercising all reasonable endeavours to ensure that the Airport innovates and is fully compliant with all regulatory, procedural and policy requirements which are relevant to Airport Operations and using such innovation and compliance to help support growth and brand awareness;
The SPA will be for a term of 10 years, with a provision to terminate at Years 4 and 7 (by either party), and an option to extend the term by 5 years at Year 10 and Year 15 (by agreement between the parties). The value of this contract is an approximate value which may be higher or lower dependent on a number of factors, including the length of the term.
The SPA has been awarded to LSACL pursuant to Regulation 50(1)(c)(iii) of the Utilities Contracts Regulations 2016. For the reasons set out below the Strategic Partnering Agreement can only be awarded to LSACL for reasons connected with the protection of exclusive rights, and no reasonable alternative and substitute exists. TVCA entered into a Shareholders Agreement with SHL to govern its equity subscription in the ultimate holding company of the company (JVCo) that owns 89,1 % of the Airport Company.
The Airport Company cannot enter into an agreement for the provision of strategic partnering advice in relation to the services required to operate the Airport and the development of operations at the Airport without the prior written consent of each of the Shareholders, including SHL. The Airport Company is of the view that the SPA can only be awarded to LSACL in this case due to the pre-existing arrangements and rights that SHL has under the Shareholders Agreement, namely the requirement that they give prior written consent to entry into an agreement for the provision of strategic partnering advice in relation to the services required to operate the Airport and the development of operations at the Airport.
Consequently, no reasonable “alternative or substitute” exists because SHL will not consent to an entity other than LSACL (a wholly owned subsidiary of SHL holding the relevant skills and expertise necessary to provide the strategic partnering services to the Airport) providing the strategic partnering services to the Airport Company.
The Airport Company is of the view that the exemption under Regulation 50(1)(c)(iii) of the Utilities Contracts Regulations 2016 applies to the award of the SPA to LSACL in this case.
Any appeals should be promptly brought to the attention of the Airport Company by emailing the named contact in Section I.1) above, and will be dealt with in accordance with the requirements of the Utilities Contracts Regulations 2016. Any appeals must be brought within the timescale specified by the applicable law, including without limitation the Utilities Contracts Regulations 2016. In accordance with such Regulations, the Airport Company entered into the SPA on the 2.4.2019 following a minimum 10 calendar days standstill period which started on the day after the Voluntary Ex- Ante Transparency Notice (VEAT) was published in the Official Journal of the European Union.


Winner: London Southend Airport Company Ltd
Award value: 14000000
Number of bids: 1