Deed of Variation of Leisure Operating Contract

{
  "awards": [
    {
      "id": "069702-2025-1",
      "relatedLots": [
        "1"
      ],
      "status": "active",
      "suppliers": [
        {
          "id": "GB-COH-2204085",
          "name": "Sports and Leisure Management Ltd"
        }
      ]
    }
  ],
  "buyer": {
    "id": "GB-FTS-165264",
    "name": "East Hertfordshire District Council"
  },
  "contracts": [
    {
      "awardID": "069702-2025-1",
      "dateSigned": "2020-12-01T00:00:00Z",
      "id": "069702-2025-1",
      "status": "active",
      "value": {
        "amount": 100873582,
        "currency": "GBP"
      }
    }
  ],
  "date": "2025-10-30T12:13:21Z",
  "description": "The Council appointed SLM to provide the leisure services pursuant to the Contract and Leases for the management and operation of the Council\u0027s two leisure centres.\nThe Contract Period is 15 years from 1 January 2020 with a 5 year possible extension by agreement.  \nThe Council intends to enter a deed of variation with SLM to modify the Contract to appoint SLM as the Council\u0027s Agent.\nThe Deed of Variation will set out the scope of the agency appointment and the extent to which SLM will act as the Council\u0027s agent.  SLM shall be appointed as the Council\u0027s Agent to provide the leisure services and maintenance of the Council\u0027s facilities but shall continue to carry out other services (specifically, the provision of food, beverages and retail services) as an outsourced supplier to the Council.\nThe Deed of Variation does not materially alter the risk position of the parties.\nThe Agent shall receive a variable management fee and reimbursement for its operating costs in providing the agency services.\nThe Council is guaranteed a Guaranteed Minimum Return of the revenue received each year on the Council\u0027s behalf having regard to the operating costs and management fee payable to the Agent.\nThe Agent shall have a licence to occupy each of the Council\u0027s facilities.",
  "id": "069702-2025",
  "initiationType": "tender",
  "language": "en",
  "ocid": "ocds-h6vhtk-05d70e",
  "parties": [
    {
      "address": {
        "countryName": "United Kingdom",
        "locality": "HERTFORD",
        "postalCode": "SG138EQ",
        "region": "UKH23",
        "streetAddress": "Wallfields, Pegs Lane"
      },
      "contactPoint": {
        "email": "kirsten.brown@stevenage.gov.uk",
        "name": "kirsten Brown"
      },
      "details": {
        "classifications": [
          {
            "description": "Regional or local authority",
            "id": "REGIONAL_AUTHORITY",
            "scheme": "TED_CA_TYPE"
          },
          {
            "description": "General public services",
            "id": "01",
            "scheme": "COFOG"
          }
        ],
        "url": "https://www.eastherts.gov.uk/"
      },
      "id": "GB-FTS-165264",
      "identifier": {
        "legalName": "East Hertfordshire District Council",
        "noIdentifierRationale": "notOnAnyRegister"
      },
      "name": "East Hertfordshire District Council",
      "roles": [
        "buyer"
      ]
    },
    {
      "address": {
        "countryName": "United Kingdom",
        "locality": "Leicester",
        "region": "UKF2"
      },
      "details": {
        "scale": "large"
      },
      "id": "GB-COH-2204085",
      "identifier": {
        "id": "2204085",
        "legalName": "Sports and Leisure Management Ltd",
        "scheme": "GB-COH"
      },
      "name": "Sports and Leisure Management Ltd",
      "roles": [
        "supplier"
      ]
    },
    {
      "address": {
        "countryName": "United Kingdom",
        "locality": "London"
      },
      "id": "GB-FTS-525",
      "identifier": {
        "legalName": "High Court"
      },
      "name": "High Court",
      "roles": [
        "reviewBody"
      ]
    }
  ],
  "tag": [
    "award",
    "contract"
  ],
  "tender": {
    "classification": {
      "description": "Recreational, cultural and sporting services",
      "id": "92000000",
      "scheme": "CPV"
    },
    "description": "East Hertfordshire District Council (the Council) intends to enter into a deed of variation with Sports and Leisure Management Limited (SLM) in relation to the Leisure Operating Contract dated 29 July 2022 (which commenced 1 January 2020) in order to appoint SLM as the Council\u0027s agent in delivering the leisure services at the Council\u0027s core leisure centre facilities.\nThe core leisure centre facilities include:\n\u2022 Grange Paddocks Leisure Centre\n\u2022 Hartham Leisure Centre\nThe date of the proposed modification is 1 December 2025.",
    "id": "ocds-h6vhtk-05d70e",
    "items": [
      {
        "additionalClassifications": [
          {
            "description": "Recreational, cultural and sporting services",
            "id": "92000000",
            "scheme": "CPV"
          }
        ],
        "deliveryAddresses": [
          {
            "region": "UKH23"
          }
        ],
        "id": "1",
        "relatedLot": "1"
      }
    ],
    "legalBasis": {
      "id": "32014L0024",
      "scheme": "CELEX"
    },
    "lots": [
      {
        "description": "East Herts Council (the Council) intends to enter into a deed of variation with Sports and Leisure Management Limited (SLM) in relation to the Leisure Operating Contract (Contract) dated 29 July 2022 (which commenced 1 January 2020) in order to appoint SLM as the Council\u0027s agent in delivering the leisure services at the Council\u0027s core leisure centre facilities.\nThe core leisure centre facilities include:\n\u2022 Grange Paddocks Leisure Centre\n\u2022 Hartham Leisure Centre\nThe date of the proposed modification is 1 December 2025.",
        "hasOptions": false,
        "id": "1"
      }
    ],
    "mainProcurementCategory": "services",
    "procurementMethod": "limited",
    "procurementMethodDetails": "Award procedure without prior publication of a call for competition",
    "procurementMethodRationale": "This voluntary ex ante transparency notice (VEAT Notice) gives notice that the Council is entering into a deed of variation (Variation) to make certain changes summarised in this VEAT Notice. A procurement procedure is not necessary on the basis that the award of the Deed of Variation of the Contract is permitted pursuant to Regulation 72 of the Public Contracts Regulations 2015.\nThe Contract is for the operation and management of the Council\u0027s two leisure centres to ensure the Council can provide quality and affordable leisure services for the residents within the district, maintain the facilities and provide a financial return to the district to invest in core services.  \nThe Contract will be varied to adopt an agency model for the future operation and management of the two sports and leisure facilities. Under the current Contract, SLM acts as Principal in the supply of leisure facilities to the public. Under the new agency model in the Variation, SLM would make supplies to the public as an Agent of the Council so that it is the Council providing leisure services to the public through its Agent.\nThis modification is being made in accordance with regulation 72(1)(e) of the Public Contracts Regulations 2015 on the basis that it is not substantial within the meaning of regulation 72(8).  The proposed modification does not constitute a substantial modification and is permitted by regulation 72 of the Public Contracts Regulations 2015 because:\n(a) the modification does not render the Contract materially different in character.  The Variation concerns the same type, scope and nature of services which will be delivered at the same Council facilities to the Council\u0027s residents. The Contract was already for the operation of the Council\u0027s leisure facilities and the Variation makes contractual changes to establish an agency model so that SLM provides the Council\u0027s statutory leisure services to the public on the Council\u0027s behalf and other ancillary modifications.  This generates VAT savings.\n(b) the modification does not introduce conditions which would have (i) allowed for the admission of other candidates, (ii) allowed for the acceptance of another tender, or (iii) attracted additional participants in the procurement procedure.  Delivering the Council\u0027s statutory leisure services as agent rather than outsourced contractor will not affect the physical operation of the leisure centres.  The change to an agency model for VAT purposes does not change the service requirement or the way in which those services are provided, and is unlikely to have changed the outcome of the procurement.\n(c) The modification does not change the economic balance in favour of the contractor in a manner which was not provided for in the initial contract. The new agency model and associated VAT benefits does not impact on SLM\u0027s operating costs and management fee under the Contract, which remains reflective of market costs. The agency model will provide a greater return than previously anticipated.\n(d) the modification does not extend the scope of the contract.",
    "procurementMethodRationaleClassifications": [
      {
        "description": "The procurement falls outside the scope of application of the directive",
        "id": "D_OUTSIDE_SCOPE",
        "scheme": "TED_PT_AWARD_CONTRACT_WITHOUT_CALL"
      }
    ],
    "status": "complete",
    "title": "Deed of Variation of Leisure Operating Contract"
  }
}