Decision details

Councillor Melvin Wallace, Cabinet member for Culture and Community Engagement, introduced the report

Members were informed that the report before them sought Member agreement to award the Council’s Sports and Leisure Management Contract, for a period of 20 years, from October 1^st 2016.  The report also sought Member agreement in principle to the building of a new Hornchurch Sports Centre, investment in new health and fitness facilities at Central Park Leisure Centre and to the continued Council funding of the Chafford Sports Complex, within the parameters that were identified in the report. 

            The report furthermore sought Member agreement to award the contract to Tenderer A on the basis that they had submitted the most economically advantageous tender (a “meat” bid) to the Council, taking account of all relevant price and quality evaluation issues. 

Reasons for the decision:

The preferred bid had been selected because it achieved the best overall score, taking account of price and quality, when assessed against the evaluation criteria identified in the table included in paragraph 21 of the report.  

Other options considered:

In considering alternatives for the management of the Sport and Leisure facilities there was not a ‘do nothing’ option as the current contract for the management of the facilities would end on September 30th 2016.  The option of extending the contract for another 5 years had already been ruled-out on the basis that it would not achieve value for money for the Council (as set out in the Tender Strategy produced in February 2014). The option of bringing the service back in-house had also been ruled-out because of the tax implications that would arise and because it was believed that an experienced leisure operator was more likely to maximise the commercial opportunities that were available as compared to the Council.  It was also the case that an external operator (providing it was delivering the contract through a Trust, Charity or similar organisation) could secure significant NNDR and VAT advantages, in comparison to the Council.

The option of retaining the existing Hornchurch Sports Centre had been considered but rejected given the age of the building, the fact that it would almost certainly need to be replaced in the next 10 - 20 years and because of the significant repair and maintenance costs associated with the current building.

Following consultation with the Council’s Legal Advisor, Cabinet was informed that paragraph 20 in the report needed to be replaced with the following wording:

“20. Tenderer A’s best “Price” score at the BAFO stage is linked to their “Core Bid” and a contract term of 10 years.  Tenderer B’s best “Price” score is linked to their “Mandatory Variant Bid” and a contract term of 20 years.” 

Furthermore, the Legal Advisor requested that some changes to the wording of some of the recommendations be made and Cabinet agreed to those changes, the recommendations to read:

Cabinet:

1          Awarded the Sports and Leisure Management Contract for a period of 20 years starting on October 1^st 2016, to Tenderer A, on the basis that they had submitted the most economically advantageous tender, taking account of all the relevant price and quality evaluation issues identified in the report;

2         Agreed in principle to the Contract reverting to a 10 year period if Tenderer A was not able to secure planning permission to build the proposed new Hornchurch Sports Centre and to delegate responsibility to the Chief Executive after consultation with the Head of Culture and Community Access to negotiate and agree revised contractual arrangements at the appropriate time should that eventuality arise;

3          Noted that the award of the Contract to Tenderer A would result in the Council receiving an average annual net payment of £967k through the life of the Contract once the Council’s Prudential Borrowing costs had been taken into account and that this would deliver the already agreed MTFS savings of £700k per annum;

4          Agreed that the Chief Executive after consultation with the Head of Culture and Community Access negotiate and agree a final Contract price with Tenderer A, taking account of any agreed changes to the Contract and any associated agreed Variations to the Contract price;

5          Noted that the funding required to progress all of the investments proposed by Tenderer A would be arranged and secured by the Council and that the costs associated with securing this funding had been factored into the financial analysis which showed the £700k MTFS savings would be achieved;

6          Delegated authority to the Head of Culture and Community Access after consultation with the Deputy Director of Legal Services, to negotiate and agree a variation to the Contract which would allow the continued operation of the Chafford Sports Complex from October 1^st 2016 - subject to any revenue costs to the Council being mitigated as far as possible - the school paying for their use of the facilities, a break clause being included in the Contract to cover a situation where the Council developed a new sports and leisure facility in the south of the borough and subject to agreement being reached with the Chafford School and Tenderer A;

7          Noted that as part of their tender submission Tenderer A would build a new Hornchurch Sports Centre on the site of the existing main car park and land to the west of that car park, subject to planning permission being secured;

8          Delegated authority to the Head of Culture and Community Access after consultation with the Chief Executive and the Cabinet Member Culture and Community Engagement, authority to establish whether there was a strong business case for retaining and converting the existing Hornchurch Sports Centre sports-hall into a multi-purpose entertainment venue, rather than demolishing it;

9          Will Receive a further report on the potential conversion of the existing Hornchurch Sports Centre sports-hall should there be a strong business case for so doing;

10        Noted that as part of their tender submission, Tenderer A would improve the health and fitness facilities at Central Park Leisure Centre, subject to planning permission being secured;

11        Delegated authority to the Head of Culture and Community Access after consultation with the Deputy Director of Legal Services, to agree and sign the final Contract, the Leases and all other documents required to enact the Contract.