The Supply Of Gases - Medical

Team Leidos are proud to be delivering the logistics commodities and services transformation (LCS(T)) Delivery partner contracts (LCS (T)/0001 dated 16.4.2015) on behalf of the UK Ministry of Defence (the ‘Prime Contract’). Delivery of other parts of the LCS(T) contract are delivered by Leidos Europe Ltd (LEL) and other partners (together ‘Team Leidos’).

This requirement is subject to the Public Procurement Regulations and respective advertising action. Please note this is a Voluntary Transparency Notice, this contract has not been awarded yet.

Following the recently advertised tender process (2023/S 000-015624), run under the Open Procedure of the Public Contract Regulations 2015 (PCR15), Leidos has concluded that no suitable bids have been received. Two bids were received, both of which fail to meet our minimum requirements.

Of the two bids, only one can provide the full range of items required. Leidos have therefore decided to utilise Regulation 32 (2) (a) of PCR15, and plan to migrate this tender process to the Negotiated without Prior Publication Procedure.

Leidos intends to negotiate with the one bidder that can provide all items with the aim of addressing the areas of non-compliance, and concluding a contract. If this process fails, a new competitive tender under the Open Procedure will commence and be advertised in the usual manner.

This contract was originally tendered under PCR2015 using the Open Procedure in late 2023 for a 4-year contract (Jan 2024 – Dec 2027). The advertised Award Notice value for the contract was £9.25M.

It was one of 3 gas contracts awarded to BOC Limited by Leidos following 3 failed competitions. The current contract (“the Medical Gases Contract”) is due to end on 31st December 2027.

The other two contracts awarded to BOC were: (i) The Supply of Industrial Gases (“the Industrial Gases Contract”) also under PCR, currently due to end also on 31st December 2027, and (ii) the contract for the Supply & Support of Refrigerant Gases, Bulk and Cryospeed Gases & Associated Equipment (“the Refrigerant Gases Contract”) under DSPCR, which is due to end on 31st December 2030. Leidos now intends to extend both the Medical Gases Contract and the Industrial Gases Contract for 3 years to make their end dates coterminous with the Refrigerant Gases Contract in 2030 thereby enabling all three to be re-aggregated and let together in the future.

Having attempted (unsuccessfully) to disaggregate the three requirements previously in the hope of generating more competition it is now felt that there is more logic in enabling a more consolidated, cost-effective and cohesive single gases tender approach. The proposed strategy allows time for further developments in the gases supply markets that could prevent a repeat of the failed tenders at the end of 2023.

This new approach also eliminates the significant inconvenience and substantial duplication of costs for the contracting authority of running three tenders rather than a single consolidated one. To facilitate the proposed contract extension, it is proposed to modify the value of the Framework Contract originally awarded to BOC ( original value £9.25m) to £13.75m on the basis that the provisions of PCR Regulation 72 (Modification of Contracts during their term): 72 (1) (b): apply- i.e.: “ …Contracts and framework agreements may be modified without a new procurement procedure ….. for additional works services or supplies by the original contractor that have become necessary and were not included in the initial procurement where a change of contractor: (i) cannot be made for economic or technical reasons such as requirements of interchangeability or interoperability with existing equipment, services or installations procured under the original procurement and (ii) would cause significant inconvenience or substantial duplication of costs for the contracting authority ..provided that any increase in price does not exceed 50% of the value of the original contract.

Future demand under the extended contract is difficult to determine accurately but is likely to be affected by a (separate) increase in the MOD’s Medical oxygen gas cylinders reserve supported by supplier capital investment. Call offs under the extended framework will be monitored and, if it is anticipated that the revised framework value might be exceeded a further VEAT will be published.