Issue details

Publica Procurement & One Legal have been consulted.

Had there been time for a new contract to be put in place relying on a waiver to the contract rules, there would have been benefit to entering into a JCT design and build contract. Also, there would have been little to no procurement risk as CBC would not have been varying an above threshold contract and the new contract would not have required a tender under the Public Contract Regulations (the threshold for tendering works contracts is just circa £5m inc VAT).

Above threshold contracts can only be varied if permitted by Regulation 72 of the Public Contract Regulations. Following discussions with CBH officers, it was decided that CBC can make a good case for amending the contract in reliance of Regulation 72 (1)(e).’  

Any variations to above threshold contracts carry a risk of a challenge on the basis that the additional requirements should have been tendered competitively. A claim for damages is a potential risk, as is an application to declare the variation ‘ineffective’ i.e. cancelled. Whilst there are no reported cases of cancellation for a variation, it is still a possibility. The time limit for a claim of ineffectiveness is 6 months from the variation. Officers have been asked to confirm that the grant to the council does not require a new procurement and whether any grant terms need to be passed down to the contractor.’

Publica Procurement preference is for a new contract to be procured but they are in agreement that varying the British Gas contract is the best option to maximise the opportunity to utilise the Government’s funding.