---
title: "Proposed contract modification (under Regulation 72(1)(c) of the Public Contracts Regulations 2015) to the Processing of Recyclable Materials including through a Materials Recycling Facility contract between the Council of the City of Newcastle upon Tyne (\"the Council\") and J&B Recycling Limited (\"the Contractor\")"
ocid: "ocds-h6vhtk-039a92"
canonical_url: "https://d3tenders.com/contract/?ocid=ocds-h6vhtk-039a92"
markdown_url: "https://d3tenders.com/contract/ocds-h6vhtk-039a92.md"
json_url: "https://d3tenders.com/contract/ocds-h6vhtk-039a92.json"
source: "Find A Tender Service"
current_stage: "Award"
buyer: "NEWCASTLE CITY COUNCIL"
published: "2023-01-25"
---

# Proposed contract modification (under Regulation 72(1)(c) of the Public Contracts Regulations 2015) to the Processing of Recyclable Materials including through a Materials Recycling Facility contract between the Council of the City of Newcastle upon Tyne ("the Council") and J&B Recycling Limited ("the Contractor")

Buyer: NEWCASTLE CITY COUNCIL  
Current stage: Award  
OCID: ocds-h6vhtk-039a92

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## Summary

Newcastle City Council has extended its processing of recyclable materials contract for an additional two years. The contract, awarded to J&B Recycling Limited, falls under the refuse and waste-related services category. This extension, governed by Regulation 72(1)(c) of the Public Contracts Regulations 2015, is aimed at ensuring service continuity due to unforeseen circumstances like the Covid pandemic and increased fuel prices. The proposed modification will not alter the essence of the contract and remains within the regulation's price increase limit of 50%.

This contract modification opportunity presents potential growth avenues for businesses operating in the waste management and recycling sector. Companies specialising in refuse and waste-related services, especially those with experience in processing recyclable materials, could be well-suited to compete for this tender. The Council's intention to extend the contract signals a stable and consistent demand for these services, making it an attractive opportunity for businesses seeking long-term partnerships in waste management.

## Notice

In 2019 Newcastle City Council "the Council" awarded a contract to the J&B Recycling Limited "the Contractor" for The processing of recyclable materials including through a materials recycling facility ("the Contract"). The Contract start date was 1st October 2019 with an initial term of 2 years and 2 x 12-month extension options. The Council has exercised both of those options, thereby giving a current contract expiry date of 30th September 2023. Due to circumstances which it could not have foreseen (as explained more fully in section VI.3) Additional information below), the Council proposes to make a contract modification to extend the term of the Contract by a further two years. This modification will result in a revised contract expiry date of 30th September 2025. The agreement was varied by a variation letter dated 10 November 2022. The contract is subject to increased payment for diesel fuel because of reforms introduced in the Finance Bill 2021. Via the above variation of 10 November 2022 The Council has agreed to make a concessionary PS1 per tonne to cover 'red diesel' costs from 1 April 2022 until the expiry of the agreement.

### Lot Information

Lot 1

In 2019 the Council awarded a contract to the Contractor for the processing of recyclable materials ("the Contract"). The Contract start date was 1st October 2019 with an initial term of 2 years and 2 x 12 month extension options. The Council has exercised both of those options, thereby giving a current contract expiry date of 30th September 2023. Due to circumstances which it could not have foreseen (as explained more fully in section VI.3) Additional information below), the Council proposes to make a contract modification to extend the term of the Contract by a further two years. This modification will result in a revised contract expiry date of 30th September 2025. Additional information: The Council's current processing of recyclable materials contract is due to expire on 30th September 2023. The Council has a statutory duty to provide this service and therefore needs to arrange for the provision of the services beyond this date. The Covid pandemic, war in Ukraine and unprecedented increases in fuel prices have resulted in global volatility in the waste industry and recyclate markets at the present time. These factors could not have been foreseen by the Council when the contract was awarded in 2019. Together with revisions to the timetable to deliver the National Resources and Waste Strategy, the above factors mean that a competitive procurement at this time is unlikely to deliver better value than that already achieved by the current contract. As such, in light of the unforeseeable circumstances above, the Council proposes to extend the Contract by a further two years. The Council's total spend over the period from 1st October 2019 to 31st December 2022 has been PS3,106,135.16 (excluding VAT). The Council estimates that the spend over the remaining 9 months of the contract from 1st January 2023 to 30th September 2023 will be PS306,495.00 (excluding VAT). Combined, these two figures give a projected spend for the full contract term (1st October 2019 to 30th September 2023) of PS3,412,630.16 (excluding VAT). The remaining contract projected spend of PS306,495.00 (excluding VAT) was calculated by summing the results of the following calculation for each of the remaining nine months of the current contract term: The predicted monthly collected tonnage for each month multiplied by the known (January 2023 - March 2023) or predicted (April 2023 - September 2023) contract pay mechanism charge for that month. The contract pay mechanism charge per tonne is expected to vary between April 2023 and September 2023 in accordance with the payment mechanism in the contract. The predicted tonnage for each month was calculated from analysis of the historical tonnages collected in each of these months over the previous three years of the contract to allow for pre-covid, covid and post-covid impacts. The Council estimates that the contract spend for the extension period being sought (1st October 2023 to 30th September 2025) will be PS1,664,760.37 (excluding VAT). Therefore, the overall total contract value, to account for the modification proposed in this notice, is estimated to be PS5,077,390.53 (excluding VAT). The projected spend for the extension period (1st October 2023 to 30th September 2025) of PS1,664,760.37 (excluding VAT) was calculated by summing the results of the following calculation for each of the 24 months of the extension term: The predicted monthly collected tonnage for each month multiplied by the predicted (October 2023 - September 2025) contract pay mechanism charge for that month. The highest charge/tonne in the current contract payment mechanism charge range was assumed as no reliable method exists to accurately forecast contract pay-mechanism charge variation. The predicted tonnage for each month was calculated from analysis of the historical tonnages collected in each of these months over the previous three years of the contract to allow for pre-covid, covid and post-covid impacts. These projections assume that annual tonnages of collected recycling materials have returned to pre-covid levels (19,500 to 20,000 tonnes per year) and will be minimally impacted by a potentially recessionary economic environment in 2023 and 2024. The lowest pay mechanism price index banding in the contract (which delivers the highest charge/tonne) has been assumed for the 24 months extension period being sought. The expectation, based on the operational experience of this contract from 1st October 2019 to the present, is that the pay mechanism price index banding will not remain permanently in the lowest band over the 24 months extension period and, consequently, the spend over the extension period being sought may, in fact, be less than the PS1,664,760.37 (excluding VAT) estimate above.

### Procurement Information

The procurement falls outside of the scope of application of the regulations. Award of a contract without prior publication of a call for competition in the cases listed below * The procurement falls outside the scope of application of the regulations Explanation: Variation to contract compliant with regulation 72.

## Key Details

| Field | Value |
| --- | --- |
| Publication source | Find A Tender Service |
| Latest notice | https://www.find-tender.service.gov.uk/Notice/002318-2023 |
| Notice type | Award Notice |
| Procurement type | Standard |
| Procurement category | Services |
| Procurement method | Limited |
| Procurement method details | Award procedure without prior publication of a call for competition |
| Tender suitability | Not specified |
| Awardee scale | Large |
| All stages | Award |

## Dates

| Field | Value |
| --- | --- |
| Publication date | 25 Jan 2023 |
| Submission deadline | Not specified |
| Future notice date | Not specified |
| Award date | 30 Sep 2019 |
| Contract period | Not specified |
| Recurrence | Not specified |

## Values

| Field | Value |
| --- | --- |
| Tender value | Not specified |
| Lots value | Not specified |
| Awards value | Not specified |
| Contracts value | £7,000,000 |

## Status

| Field | Value |
| --- | --- |
| Tender status | Complete |
| Lots status | Not specified |
| Awards status | Active |
| Contracts status | Active |

## Buyer

| Field | Value |
| --- | --- |
| Main buyer | NEWCASTLE CITY COUNCIL |
| Locality | NEWCASTLE-UPON-TYNE |
| Post town | Newcastle upon Tyne |
| Postcode | NE1 8QH |
| Country | England |
| ITL 1 | TLC North East (England) |
| ITL 2 | TLC4 Northumberland, Durham and Tyne & Wear |
| ITL 3 | TLC43 Tyneside |
| Local authority | Newcastle upon Tyne |
| Electoral ward | Monument |
| Westminster constituency | Newcastle upon Tyne Central and West |
| Delivery location | TLC2 Northumberland, and Tyne and Wear |

## Supplier

| Field | Value |
| --- | --- |
| Number of suppliers | 1 |
| Supplier names | J&B RECYCLING |

## CPV Codes

### Divisions

- 90 - Sewage, refuse, cleaning and environmental services

### Codes

- 90500000 - Refuse and waste related services

## Release History

- 25 Jan 2023 at 14:59 - Award - Award Notice - https://www.find-tender.service.gov.uk/Notice/002318-2023

## Notice URLs

- http://www.nepo.org
- https://ted.europa.eu/udl?uri=TED:NOTICE:206822-2019:TEXT:EN:HTML

## Provenance

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