Change in Delivery Model for Council Owned Leisure Centres - Agency Model

Location

Basildon

Description

The council's leisure services (Basildon Sporting Village, Eversley Leisure Centre and Wickford Swim and Fitness Centre) are operated and delivered by Sports and Leisure Management Ltd (SLM), trading as Everyone Active (EA), under two separate contracts, one for Basildon Sporting Village and another for "Other Leisure" that includes Eversley Leisure Centre and Wickford Swim and Fitness Centre. The proposed modification is the adoption of an Agency Model for the delivery of the council's leisure services within the borough.

Award Detail

Renewal Options

The alternative option would be for the council not to extend the leisure contracts. This could result in SLM having to operate under an unsustainable business model without increasing prices across the centres which would negatively impact on the centres' performance, facility users and the community, in particular low-income residents and families. In order to ensure continued service delivery and best value for the council for the contract term, the extension will mitigate against any fluctuations in financial resources and will support SLM to operate under a better business model. The extension will also provide SLM with the opportunity to invest in a longer-term commitment with the council, which will provide ongoing reassurance for future investment in the facilities and services. It will also allow a suitable timeframe for SLM to fully repay the support grant that was provided by the council over the Covid period without negatively impacting on the centres' performance or facility users and the community

CPV Codes

• 92610000 - Sports facilities operation services

Indicators

• Options are available.

Legal Justification

The existing Contracts are based on Sport England templates. The Agency Model was therefore not the structure that was identified in the original tenders, nor is it described in the Contracts. Rather, SLM operates the facilities as "principal" in the Leisure Contract, and the DBOM Contractor does the same under the 2009 DBOM Contract. It is proposed that for efficiency, SLM would combine the Contracts together into one contract, under which SLM would be the counterparty responsible for all services (the Consolidated Leisure Contract). It follows that if the Agency Model were to be implemented, several changes would need to be made to the Contracts, being: 1. changes to accommodate the agency structure; 2. change of counterparties under the 2009 DBOM Contract to remove the DBOM Contractor and place all obligations on SLM; and; 3. changes to accommodate combining the Contracts together generally. Regulation 72 of the Public Contracts Regulations 2015 (PCR) governs modifications to public contracts during their term. Regulation 72 sets out six "safe harbours" in which a public contract can be modified during its term without the need to re-advertise the contract. The identified safe harbour for these changes is regulation 72(1)(e). Regulation 72(1)(e) can be relied on where the modification, irrespective of value, is not "substantial" as defined in Regulation 72(8). The Council establishes and document that none of the following sub-grounds are made out by the proposed changes to implement the Agency Model, in particular with reference to its knowledge of the market for these services and the responses from other bidders in the original procurement: 1. the modification renders the contract materially different in character from the one initially concluded; 2. the modification introduces conditions which, had they been part of the initial procurement procedure, would have: (a) allowed for the admission of other candidates; or (b) allowed for the acceptance of another tender; or (c) attracted additional participants in the procurement procedure, 3. the modification changes the economic balance of the contract in favour of the contractor in a manner which was not provided for in the procurement procedure; 4. the modification considerably extends the scope of the contract; and 5. a new contractor replaces the original contractor in cases other than those provided for in Regulation 72(1)(d) - which covers corporate restructures.