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General change clause not sufficient

The James Waste case* concerned whether a temporary change to a waste contract was permitted under Regulation 72 of the Public Contracts Regulations 2015. My colleague Steven Brunning has written an ebriefing on the main aspect of this case - whether the change was a 'substantial change'. 

This post focuses on a subsidiary element of the decision - whether the change was 'provided for in the contract' in accordance with Regulation 72(1)(a). This Regulation permits a change where it:

'has been provided for in the contract in clear, precise and unequivocal review clauses provided that such clauses: 

  • state the scope and nature of possible modifications or options as well as the conditions under which they may be used; and 
  • do not provide for modifications or options that would alter the overall nature of the contract.'

In the James Waste case, the contract contained a typical 'change control' clause. This clause set some limits on permissible changes and detailed the process for the parties to follow when wanting to propose a change. However, the definition of 'change' in the contract covered all of the waste sites and services and the court said that 'there was no real demarcation in scope' as to what changes could be made. In the absence of a clear description of the changes that could be made, the court said that the change control clause was 'deficient' for the purpose of Regulation 72(1)(a). Even if the change control clause had satisfied Regulation 72(1)(a), the council had not followed the correct procedure to rely on it. 

This case confirms what we have always considered to be the case, that the inclusion of a general change control clause is not sufficient to argue that a change is 'provided for in the contract' so as to be able to rely on Regulation 72(1)(a).

*James Waste Management LLP v Essex County Council [2023] EWHC 1157 (TCC)

In James Waste v Essex County Council, the High Court decided that a change to a waste contract was not 'substantial' under the Public Contracts Regulations 2015 (PCR). The judgment gives rare and valuable guidance on some of the tests to be applied to decide how far a contract can be modified without a new procurement being needed.

Tags

contracts, housing, local goverment, procurement, registered providers