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Voluntary ex ante transparency notice
Section I: Contracting authority/entity
Section II: Object
5 Councils Corporate Services Project
South Oxfordshire District Council, Havant Borough Council, Vale of White Horse District Council, Mendip District Council and Hart District Council (‘the Councils’) entered into a contract (for an initial duration of approximately 9 years) with Capita for a range of corporate and transactional services (‘the Contract’). The opportunity was advertised under OJEU Notice 2015/S 057-100137 and entered into on 4 April 2016. Further details of the original contract are set out in that OJEU notice.
The Councils intend to enter into a contract variation agreement with Capita for the purposes of removing the requirement for human resources operational, payroll and finance services from the scope of the original contract.
Oxfordshire (UKJ14), Somerset (UKK23) and Hampshire (UKJ3, UKJ33).
This section provides detail of the reduction of the original contract.
The reduction in the I-Hub and Human Resources (Advisory) Services resulted in a reduction in contract value of approximately GBP 700 242 per year for the remainder of the contract term.
The reduction in the licensing services resulted in a reduction in contract value of approximately GBP 377 000 per year for the remainder of the contract term.
The reduction in the human resources operational and payroll services would result in a reduction of approximately GBP 1 012 086 per year for the remainder of the contract term.
The reduction in the finance Services would result in a reduction in contract value of approximately GBP 634 000 per year for the remainder of the contract term.
The reduction in the exchequer services would result in a reduction in contract value of approximately GBP 1 600 000 per year for the remainder of the contract term.
Continues in Annex D1.
Continued from II.1.4) — the variation will also confer on the Councils a contractual option to further remove exchequer services from the contract, subject to operational and commercial considerations. The Councils are currently considering their options as to whether they will exercise this right (though, if the Councils elect to do so it is proposed to be effective from 31 March 2021).
Section IV: Procedure
The contract has been reduced as per the information set out in section II.2.4).
Taking into account the value and scale of the original contract the Councils consider that the proposed modification(s) to reduce the scope of the contract is not substantial for the purposes of Regulation 72(1)(e) of the PCR in the context of a GBP 140 262 000 contract spanning 9 years. (The 9-year term represents the contract duration of the contract, excluding any extension options). Furthermore, the economic balance of the contract is moving away from the contractor by the reduction of the service opportunity.
The Councils consider that modifying the contract in the manner proposed is for operational and commercial reasons to achieve a smooth transition and continuity. This will involve approximately 34 staff transferring to the Councils.
Capita entered into a sub-contract arrangement with Zellis UK Ltd (‘Zellis’) to deliver the payroll technology aspects of the contract. The contract requires Capita in appointing any sub-contractors to ensure that it is possible for them to assign, novate or otherwise transfer the rights and obligations under each sub-contract that relates exclusively to this contract to the Councils (clause 15.1(c)). This is to ensure that the Councils are able to have direct access the continuation of those services outside of a prime contractor arrangement.
The Councils consider the above to be an unequivocal review clause/option for the purposes of Regulation 72(1)(d) of the PCR which allows the Councils to novate the sub-contracting arrangement between Capita and Zellis so that it is held directly by the Councils and Zellis. The permitted variation will place a legally enforceable obligation on Zellis to provide payroll technology services to the Councils with a synchronized expiry with the contract.
The restructuring of the services seeks to ensure the ongoing delivery of public services on a value for money basis.
Section V: Award of contract/concession
Section VI: Complementary information
The estimated value in II.1.7) and V.2.4) refers to the projected value of the diminished contract value in the event the Councils modify the contract in accordance with the variations set out in this notice.
Where the Councils do not remove the exchequer services but remove the other services from the contract (as set out in this VEAT Notice) the estimated value of the modified contract will be GBP 134 436 000.
The value of the contract with Capita as originally awarded on 4 April 2016 was GBP 140 262 000 as per OJEU ref: 2016/S 088-154829.
The contract has previously been varied by the Councils to remove I-Hub, human resources (advisory) services and licensing and its current estimated value is GBP 1 000 ,000 per annum.
Continued from II.2.14) — the possible further reduction of the exchequer service forms part of the subject of this notice and this notice therefore seeks to provide further justification and transparency for any future exercise of that option were it to arise.
In accordance with Regulation 88 — 104 (Enforcement of duties through the Court) of the Public Contracts Regulations 2015 (as amended) (‘PCR’).