W722 - Longbridge Weir Hydroelectric Plant Maintenance

Location

Description

The Longbridge Weir Hydropower House was constructed in 2011 to generate renewable electricity, primarily for the Council House. Derwent Hydroelectric Power Ltd was the original designer and constructor of the installation and has provided operation and maintenance services since commissioning. The plant has now been operational for approximately 14 years. As it approaches the later stages of its asset lifecycle, several major components are at increased risk of failure due to age and will require replacement within the next five years. Ongoing operation and maintenance therefore require specialist technical knowledge of the original design and construction of the installation. Accordingly, a direct award is permitted under the Procurement Act 2023, Schedule 5, item 6(a), as competition is absent for technical reasons and only a particular supplier can supply the required services. The market for contractors capable of maintaining and upgrading a small-scale hydropower installation of this nature is extremely limited. The plant requires a cost-effective 24-hour emergency response capability, which most specialist providers are unable to deliver. Derwent Hydroelectric Power Ltd is locally based, enabling this requirement to be met. As the original constructor, the supplier also has detailed and unique knowledge of the plant, presenting a significant technical barrier to alternative providers. The small scale of the installation further reduces commercial viability for other contractors. These market conditions are not expected to change

Award Detail

CPV Codes

• None found

Legal Justification

The Longbridge Weir Hydro Power House was built in 2011, primarily to power the Council House. Derwent Hydroelectric Power Ltd were the original contractor for the project and have serviced the plant ever since. The plant has now been operational for 14 years and some larger parts of the plant are at risk of failure due to age and will require replacement in the coming 5 years. This contract has been procured twice via a VEAT Notice (now replaced by the Transparency Notice under the Procurement Act 2023) since 2021 and has received no challenges in that time. It was last tendered in 2017, when only two bids were received, and the one not from the incumbent supplier was significantly higher in price. The likely reasons for this are: - There are a limited number of contractors in this highly specialist field, and the majority are unable to cost effectively provide the 24-hour emergency back-up which the plant requires (Derwent Hydroelectric Power Ltd are locally based at Matlock Bath). - Derwent Hydroelectric Power Ltd, having originally constructed the plant are very familiar with its construction, which puts off other contractors. - The scale of the operation is very small, meaning other contractors consider it a high risk. This situation has not changed in the intervening years and is unlikely to in the future. In addition to the above, Derwent Hydroelectric Power Ltd has performed well, having worked to improve plant efficiency and reduce operational spend. Direct award is permitted under the Procurement Act 2023, Schedule 5, item 6 (a) due to an absence of competition for technical reasons, only a particular supplier can supply the goods, services or works required.

Other Information

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