Public procurement notice: Periodic Indicative Notice Without Call For Competition
Published: 2019-04-10
Buyer: United Utilities Water Ltd
Country: UK
Contract type: Services
CPV classification: 45000000: Construction work | 45221200: Tunnel construction works | 45221247 | 45231300 | 45350000

Technical requirements: Competitively Appointed Provider to Design, Build, Own and Finance a Major Water Resilience Supply Project Utilising the Direct Procurement for Customers (DPC) Approach
United Utilities Water Ltd (UU) proposes to deliver a scheme providing long-term water supply resilience to Manchester and the Pennines using the DPC approach.
DPC has the potential to benefit customers by providing an option for delivering the largest and most expensive new assets at lower cost, and allows scope for greater innovation, allowing new providers to bring new ideas. Further information regarding DPC can be accessed via the following link: https://www.ofwat.gov.uk/publication/delivering-water-2020-final-methodology-2019-price-review-appendix-9-direct-procurement-customers/
Following a successful procurement process conducted by UU in accordance with the Utilities Contracts Regulations 2016 (UCR), UU would select the preferred tenderer i.e. Competitively Appointed Provider (CAP).
The current assumption is that the CAP will earn revenues on this asset over the term of the contract, which will be c.25 years. However, it should be noted that the exact length of the arrangement is to be determined through discussions with the prospective CAPs.
These elements will be reviewed based on a value for money assessment, market engagement feedback, risk allocation and the strategic nature of the assets.
UU wishes to make the market aware of the potential opportunity in relation to the role of the CAP for the project and to commence a market engagement exercise in relation to that role. UU also wishes to engage with interested parties to confirm the chosen approach to the procurement of the CAP, to advance such infrastructure providers understanding of the role of the CAP and to obtain market feedback.
If you have experience in this area please could you provide at a minimum the following information and submit to the united utilities regulatory procurement team mailbox:
— contact details, including location telephone and e-mail address, main point of contact and position in company.
The proposed scheme will ensure the resilience of potable water supplies to populations in Manchester and the Pennines. The Haweswater aqueduct supplies a third of the region’s drinking water every day but investigations have revealed that its condition is deteriorating. UU are already undertaking additional investment of 35 000 000 GBP to replace a number of sections of the tunnel by 2020, but a longer term solution is required. To arrive at a baseline solution, UU has performed an optioneering exercise covering over 400 different options to manage the risk and undertaken a thorough screening process to determine its baseline solution. UU’s plan proposes a DPC approach to deliver replacement tunnels in AMP7 and AMP8 as this has been assessed as the best value solution.
UU has worked with YourVoice and independent academics to engage effectively with customers to determine a baseline solution. UU has also engaged with a wide range of stakeholders, including working with the 100 Resilient Cities organisation to test the possible solutions. The baseline solution proposed, based on customer preference, is to construct new sections of tunnels parallel to the existing aqueduct. Environmental and economic appraisals also favoured this baseline solution and analysis showed it also the most robust option.
In advance of the procurement process for the CAP, it is envisaged that UU will undertake the following activities, utilising third party support as and when required:
The outcome of the above activities will be made available to the CAP as constraints to the scope/specification provided and to enable any CAP bidder to submit a tender.
Following on from feedback from this PIN, UU proposes to hold one or more market engagement events as an opportunity for UU to present the project directly to the market, answer questions raised and receive feedback on key areas of the information shared, in particular, commercial structure, risk allocation and funding solutions.
The anticipated construction value of this proposed project lies in the range 500 000 000 GBP — 1 000 000 000 GBP.