Public procurement notice: Contract Award Notice
Published: 2017-11-08
Buyer: Thurrock Borough Council
Country: UK
Contract type: Services
Procedure: Contract award without prior publication
CPV classification: 45000000: Construction work | 45100000: Site preparation work | 45200000: Building and civil engineering work | 45210000: Building construction work | 45211000: Construction work for multi-dwelling buildings
Estimated value: 800000000 GBP
Award criteria: The most economic tender

Technical requirements: The Council entered into a development agreement with its development partner, Purfleet Centre Regeneration Ltd on 11.1.2016 pursuant to an OJEU procurement, the contract award notice for which was published on 14.1.2016 (reference 2016/S 009-011045). The development relates to bringing forward the delivery of the Purfleet Centre Regeneration Project. The project will create a new, sustainable mixed-use town centre featuring high quality housing alongside employment space, local services (including a primary school, health centre, community facilities and television and film studios) and enhanced transport connections.
On 11.1.2016 Thurrock Borough Council (the ‘Council’) entered into a Contract with Purfleet Centre Regeneration Limited (‘PCRL’) for the regeneration and development of Purfleet Town Centre and surrounding areas (the ‘Development Agreement’). In a contract award notice published in the Official Journal on 14.1.2016, the Council notified the market that the Development Agreement had been signed and that L&Q New Homes Limited (‘L&Q’), as funding partner, had taken an equity stake in PCRL and had taken a role as guarantor of the development works alongside Keltbray.
L&Q has now been replaced in its roles under the Development Agreement and as a shareholder in PCRL. The roles have been shared between 2 entities belonging to Swan Housing Group, namely Swan Commercial Services Limited (as developer's guarantor) and Swan New Homes Limited (as a shareholder in PCRL). The Council undertook due diligence to ensure that these entities met the same criteria as were imposed when L&Q New Homes Limited was appointed and is satisfied that they do. The relevant agreements were signed on 31.10.2017.
The substitution of L&Q by Swan New Homes Limited gave rise to minor mechanical amendments of the Development Agreement to provide for the replacement of L&Q as a shareholder in PCRL as well as Swan Commercial Services Limited taking over as guarantor of development works (alongside Keltbray) and as provider of the construction management services and Swan New Homes Limited taking over provision of the project management services. Minor consequential drafting amendments were also made to ensure the existing provisions operate in parallel with the additional documentation required to substitute L&Q with Swan, including the Step-In Agreement, the Building Lease and the Phase 1 Finance Documents.
Additional amendments to the Development Agreement had the effect of: (a) Resolving an inconsistency in the documentation between the implementation and grant of planning permission to remove the need for the parties to enter into every single Planning Agreement in order to be able to implement the permission; (b) Allowing PCRL to grant any potential photovoltaic panel or other renewable energy leases, and/or to grant a lease or transfer of any CHP plant to an ESCO or other service provider where such equipment is required pursuant to the planning permission without having to obtain the Council's consent for each disposal;(c) clarifying the drafting to reflect the commercial intention of the parties in respect of the timing of PCRL's draw-down of building leases for parts of Phase 1, so that PCRL can draw-down its land interest in order to mitigate the risk of the developer not being able to draw down in circumstances where all other conditions have been satisfied.
In line with the scope for development of the concept plan and in accordance with the clear mechanisms in the Development Agreement there are also proposals being considered to increase the number of housing units within the wider development.
(1) The replacement of L&Q in its roles under the Development Agreement and as a shareholder in PCRL;
(2) Swan Commercial Services Limited taking over as guarantor of development works (alongside Keltbray) and as provider of the construction management services;
(4) The small number of minor mechanical and/or consequential amendments referenced in this notice to reflect the above.
As explained in this notice did not constitute the award of a new contract, nor a modification which required a new procurement procedure in accordance with Regulation 72(9) Public Contracts Regulations 2015.
The Council considers that the amendment to substitute the new Swan entities fell within Regulation 72(1)(a) as the substitution is provided for in the Development Agreement in clear, precise and unequivocal terms.
(i) Regulations 72(1)(e) and 72(8) as the modification was not ‘substantial’; L&Q did not invest until after PCRL was chosen as the successful bidder; its involvement was not relevant to the competitive outcome of the procurement process; and Swan met the same conditions as were imposed for the appointment of L&Q; and/or
(ii) Regulation 72(1)(f) as the modification was of nil value and did not alter the overall nature of the contract.


Winner: Purfleet Centre Regeneration Ltd
Award value: 800000000
Number of bids: 1