The Corporate Director Communities sought approval to waive Contract

Procedure Rules in accordance with CPR 3.2.9.4 in respect of the contract with PassivSystems Limited for Phase 2 for the Small Business Research Initiative and to enter into a Deed of Novation to novate that contract from PassiSystems Limited to Passiv UK Limited.

The Corporate Director Communities reported that in February 2019 Cabinet approved the Bridgend Local Area Energy Strategy and Smart Energy Plan.  The Smart Energy Plan contained several project ideas to be developed over the period 2019 – 2025 which will provide the evidence base for the decarbonisation of Bridgend County Borough in line with the Local Area Energy Strategy.  The Council submitted a proposal to Welsh Government through their Small Business Research Initiative (SBRI) to run an innovation competition (over two phases – Feasibility and Demonstration) to allow innovators in the market to come forward with ideas around how heat networks could be developed at a lower cost to current market conditions.

The Corporate Director Communities informed Cabinet that following a competition in 2019, 4 organisations were appointed to develop their ideas as part of Phase 1 of the SBRI process.  One of which, was Passiv Systems, who were awarded the contract to deliver their demonstration project as part of Phase 2 of the SBRI in March 2021.  However, PassivSystems were placed into administration in April 2021 and were then 

acquired by Passiv UK.  She stated that as a consequence of this acquisition, Passiv UK had requested that the contract with PassivSystems be novated to Passiv UK Limited.    

The Cabinet Member Communities in commending the proposal to waive Contract Procedure Rules stated that the Council had been awarded Welsh Government funding to deliver innovative projects, outing the Council at the forefront not only in Wales, but throughout the UK.  This innovation would contribute to decarbonisation and reduce fuel poverty.    

The Cabinet Member Wellbeing and Future Generations asked what due diligence had been undertaken and by whom when Passiv were awarded the contract.  The Corporate Director Communities stated that Passiv had been appraised by the Council and Welsh Government and also had to enter into a contract for their demonstration project.  She informed Cabinet that the parent company then launched a new company.

RESOLVED:              That Cabinet:

 ·  Authorised the waiver of the Council’s Contract Procedure Rules to allow the modification of the existing contract with PassivSystems Limited in relation to Phase 2 of the Small Business Research Initiative by consenting to the novation of that contract to Passiv UK limited in accordance with Rule 3.2.9.4;

·   delegated authority to the Corporate Director Communities to approve the final terms of the Deed of Novation required to novate the contract from PassivSystems Limited to Passiv UK Limited and enter into that Deed of Novation in consultation with the Interim Chief Officer, Finance, Performance and Change and Section 151 Officer, and Chief Officer Legal, HR and Regulatory Services and to arrange execution of the Deed of Novation on behalf of the Council, subject to such delegated authority being exercised in consultation with the Chief Officer Legal, HR and Regulatory Services.