Firmus Energy Construction and Maintenance Works and Services Contract

firmus energy ran a procurement exercise to (subject to the terms of the Invitation to Negotiate) establish a Framework Agreement with two Contractors, a 'primary' Contractor and a 'reserve' Contractor. The intention was that all Works required would be awarded to the first ranked Tenderer ('primary' Contractor) to complete in accordance with the terms of the Framework Agreement. The second ranked Tenderer would (subject to the terms of the Invitation to Negotiate) be appointed as a 'reserve' Contractor and potentially, at firmus energy's discretion, be appointed to undertake the entirety of the Works in the event that the 'primary' Contractor was unable or unwilling to undertake the Works for any reason during the term of the Framework Agreement.

The tender opportunity was divided into two (2) Lots, as follows:

Lot 1:

• Framework Agreement duration - initial three (3) year period, with the option for firmus energy to extend the Framework Agreement on two (2) subsequent occasions of up to twelve (12) months each.
• Performance Bond with a limit of liability of at least £800,000
• Retention at 15% up to a limit of £800,000, with that limit capable of reducing by 50% at the end of the second year of the Term (as defined in the Framework Agreement)
• Parent Company Guarantee
• Domestic owner occupied connections to be completed within D+15 (D representing the date of handover by firmus energy)
• Contractor to carry out digitising of mains and Industrial and Commercial (I&C) services in accordance with section 1.2.6 of the Specification.

Lot 2:

• Framework Agreement duration - initial five (5) year period, with the option for firmus energy to extend the Framework Agreement on one (1) subsequent occasion of up to twelve (12) months.
• No performance bond required
• Retention at 15% up to a limit of £300,000, with that limit capable of reducing by 1/3 at the end of the third year of the Term (as defined in the Framework Agreement)
• Parent Company Guarantee
• Domestic owner occupied connections to be completed within D+20
• Firmus energy to digitise the as laid drawings into its Gas Network Information Management System (GIS).

Save as set out above, and within the terms of the draft Framework Agreement and the Specification, the Works required under each Lot were the same. Applicants were permitted to apply for one or both Lots, with no limit on the number of Lots which may be applied for. The contract notice for the opportunity however made clear that firmus energy would not award a Framework Agreement for both Lots. The notice confirmed that it was firmus energy's intention, following conclusion of the Procurement and subject to the terms of the Invitation to Negotiate, to either award a Framework Agreement to the top two (2) ranked compliant Tenderers for Lot 1 and terminate Lot 2; or award a Framework Agreement to the top two (2) ranked compliant Tenderers for Lot 2 and terminate Lot 1. The draft Invitation to Negotiate for the Procurement detailed the criterion and process to be adopted to determine whether firmus energy awarded a Framework Agreement for Lot 1 or Lot 2.

Estimated annual contract value was circa £10-£11M therefore, dependent on which lot firmus energy awarded a Framework Agreement for, estimated total contract value was stated to be in the region of £66000000 over a full potential 6 year contract period.