DRAFT
RCBF Guidance for change control or new
procurement including approach
to define eligible premises
May 2013
Version 1.0
Broadband
Delivery UK
The European Agricultural Fund for Rural
Development:
Europe investing in rural areas
RCBF Guidance
DRAFT
Document use and contents
This guidance pack is for Local Authorities and is designed to
explain the approach and various elements that need to be
considered for using the BDUK Rural Call-Off Contract to
implement a Rural Community Broadband Fund (RCBF) Project.
It also sets out the process for defining eligible premises in the
Final 10% and provides Local Authorities with guidance for
liaison with stand-alone Community led projects.
This guidance is focused primarily on change control or a new
procurement but also where relevant this guidance refers to
procurements by community groups.
Title
Slide
Document use and contents
2
Context
4
Part 1 – Local Authority Initial Considerations
5
Part 1 – Outline Process Flow
6
Part 1 – Eligible Premises
7
Title
Slide
Part 1 – Materiality
8
Part 1 – State Aid Compatibility
9
Part 1 – Procurement – Change Control
10
Part 1 – Procurement - Quotation
11
Part 1 – Procurement Change Control (cont)
12
Part 1 – Procurement – New Procurement
13
Part 1 – RCBF Funding Terms
14
Part 1 – Quotation Spreadsheet
15
Part 2 – Community Led Applications
16
Part 2 – Sample Letter Template
18
May 2013
RCBF & Call-Off Contract Guidance
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RCBF Guidance
Document use and contents (cont)
DRAFT
Please Note: This document relates to the BDUK Broadband Delivery Framework (the "Framework") and is subject to change.
This document is provided by BDUK for use only by Local Bodies who are utilising the Framework in order to ‘call off’ their local rural broadband
Project. It is not to be used for any other purpose. Access to this document is restricted to the relevant authorised Huddle users and other
associated permitted recipients.
This document may contain certain high level and/or selected summary information only and care should be taken if relying on its content. To
ensure they are fully informed, Local Bodies should refer to the relevant more detailed framework document(s) (where available) and otherwise
consult with BDUK and/or their own professional advisers.
Anybody using this document must seek their own legal advice in respect of the document's content. DCMS (including BDUK) accepts no liability
for: (i) the accuracy of this document; or (ii) its use in respect of a Framework call off or otherwise.
The principles in this guidance will be relevant to Local Bodies who have not used the BDUK Call-off procedure under the Framework, although
the details of how they are applied will vary depending on the contract used.
May 2013
RCBF & Call-Off contract Guidance
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RBCF Guidance
DRAFT
Context
This document is intended for Local Authorities only and provides guidance on the process for establishing a Rural
Community Broadband Fund (RCBF) Project which is either integrated into an existing Call Off Contract under
change control or procured separately.
The guidance is provided in two parts:
Part 1 – For Local Authority led RCBF applications – which could also include where the Local Authority has agreed
to lead as the procuring and contracting authority on behalf of other local organisations.
Part 2 - For Community led RCBF applications – setting out the process for considering if a project is located in the
10% area.
Note 1: This document does not provide guidance for community led procurements of RCBF projects. Local
communities intending to undertake their own separate procurement should be referred to the guidance provided
in the RCBF Full Application handbook and other material available on the Defra website.
http://rdpenetwork.defra.gov.uk/funding-sources/rural-community-broadband-fund
Note 2: The deadline for submissions of expressions of interest under the 3rd wave has been extended and now
closes on Monday 17th June 2013.
May 2013
RCBF & Call-Off Contract Guidance
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RBCF Guidance
Part 1 – Local Authority Initial Considerations
DRAFT
A Local Authority must consider the following aspects in determining its approach for an RCBF project:
1.Eligible Premises – RCBF projects are only eligible for funding if those premises are not covered by the NGA
deployment of the county programme and therefore fall within what is broadly defined as the “Final 10%”. The
Local Body will need to validate whether premises are eligible by analysing the “no build” tagged information set
out in the Speed and Coverage Template (“SCT”). Please refer to Slide 7 for further details.
1.Materiality – RCBF projects can only be integrated into an existing Call Off Contract under change control if the
change does not constitute a material change under procurement law (otherwise a new procurement will be
required). Please refer to Slide 8 for further details.
1.State Aid Compatibility – the RCBF project will need to be State aid compatible. If the Local Authority intends to
use the UK National Broadband Scheme as state aid cover for the RCBF project, then the project will need to meet
all the relevant criteria set out detailed guidance note for state aid compatibility. Please refer to Slide 9 for further
details.
1.Project Completion Date – the Local Authority will need to ensure that the Supplier is able to deliver the RCBF
project under the current RDPE Programme (2007-2013), which means that funding needs to be contracted by
Summer 2014 and all premises delivered with expenditure defrayed by March 2015.
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RCBF & Call-Off Contract Guidance
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RBCF Guidance
DRAFT
Part 1 – Outline Process Flow
Procurement
X weeks
Local Body
4.A.1 Following
finalisation of SCT at Local
Body Contract Award –
Local Body to carry out
the following
assessments:
1.Final 10%
2.Materiality
4.A.2 Local Body
considers
submitting a RCBF
application and
commences
market
engagement
based on
procurement
route identified
Note: Note: the
procurement route will be
dependent on the
outcome of both of these
4.A.4 Local Body
commences procurement:
If Change Control Local
Body prepares a Change
Request Form and
requests a full ‘quotation’
using change control
process
OR
For a new procurement
the Local Body prepares
ITT documentation for
issue
4.A.5
Supplier(s)
provide response
to Change
Request or ITT
response and
Local Body
evaluates
4.A.6
Local Body submits
outcome of
procurement to
DEFRA/BDUK in their
Full application for
formal approval
(Technical.
Commercial and
State Aid)
4.A.7
Confirmation of
RCBF Project
approval by
BDUK
4.A.8 RCBF
Project signed off
Implement
Change Control
or sign new
contract
4.C.4
Compliance check
for Public
Consultation
confirmed
4.C.6
RCBF Case Team
approve and
issue Funding
Terms
X weeks
1 month
National
Competence Centre
DEFRA/RCBF
4.B.1
Public Consultation: If
required (see slide on state
aid compatibility)
4.C.1
Expression of
Interest
(“EOI”)
4.B. 2
Intervention area
for Community
Project
confirmed as
white
(Formalise map)
4.C.2
DEFRA confirms
EOI and requests
Full Application
to commence
development
4.B.3
State aid
compatibility
assessment
commences
4.C.3
Full application
submitted Full
Application appraisal
undertaken
4 B.4
State aid
compatibility
confirmed
4.C.5
RCBF Case Team
assessment and
evaluation
Key
Dependency
May 2013
RBCF & Call-Off Contract Guidance
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RCBF Guidance
Part 1 – Eligible Premises
DRAFT
• Prior to commencing any analysis work to establish which premises within the Local Authority area are eligible for
RCBF funding, the Local Authority must have finalised its Speed & Coverage Template and awarded its county project
under the BDUK Call-Off Procedure.
• Once this stage has been reached, the first key step that should be undertaken is to define which premises could be
eligible for RCBF funding. The Local Authority will be able to carry out analysis of its SCT and determine if the
postcodes for their project are eligible premises that can form part of the RCBF application to DEFRA.
• This must be based on the “no build” tags within the SCT where NGA is not proposed to be built as part of the
existing county project. . (i.e. they are white NGA areas only).
• Premises that are in postcodes which are tagged in the SCT as forming part of phase of deployment under the
county programme will not be eligible for RCBF funding and therefore should not be included in the application to
DEFRA.
• In order to meet the evaluation process for the RCBF application, it will be necessary for the Local Authority to
confirm that the premises being included meet the eligibility requirements.
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RCBF Guidance
DRAFT
Part 1 – Materiality
• Please Note: this “Materiality” slide only applies if the Local Authority intends to add an RCBF project to its
existing County call-off contract. It is the second key step in the process to determine whether an RCBF project can
be delivered via change control or if a new procurement is required.
• Local Bodies will need to form their own view as to whether the proposed change to the Call Off Contract would be
considered to be material under procurement law. The current materiality test is set out below. BDUK will be issuing
further guidance concerning the application of the materiality test in the near future.
• Under current procurement law the test of materiality involves an assessment of the following non-cumulative
factors (known as the Pressetext test):
– Does the change demonstrate an intention to re-negotiate the essential terms of the contract (risk allocation,
price etc)?
– Has there been a change that could have affected the tender outcome or affected a bidder's approach to their
tender submission?
– Has there been a change that could have altered who decided to respond to the original call for competition?
– Will there be a shift in the economic balance of the contract in favour of the contractor?
– Will the change increase the scope of the contract "considerably"?
– Was the change provided for or contemplated under the original contract?
• Local Authorities should note that the Materiality test applies to all additional funding added to an original county
project on a cumulative basis, therefore any other additional funding that has already been added to an original
procurement should be taken into account when undertaking the Materiality test.
May 2013
RCBF & Call-Off Contract Guidance
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RCBF Guidance
Part 1 – State aid Compatibility
DRAFT
•
Any RCBF project will need to comply with the State Aid law. The Local Authority may in certain circumstances be able to rely on its
original Public Consultation (used for the Call Off Contract). One month is normally allowed to lapse between the close of the
Public Consultation and the start of the tender process. However, up to 6 months can lapse from the last Public Consultation
closure date but the Local Body will need to take additional steps as appropriate to assure itself that the classification of the target
areas to be delivered under their RCBF project remain accurate without any further action being taken.
•
In the event that that the Local Authority cannot use its original Public Consultation, then it will be necessary to run a new Public
Consultation for the set of proposed post codes that are intended to form part of the RCBF project.
•
DEFRA/BDUK will validate the Public Consultation and confirm its compliance under the “National Broadband Scheme for the UK:
Supporting the local and community roll-out of superfast broadband State Aid Guidance: Public Consultation”. Further guidance can
also be found at https://www.gov.uk/broadband-delivery-uk#state-aid
•
The Community Project will be State aid compatible if the following can be satisfied:
•
1.
An open tender process has taken place and
2.
The contract change or new procurement complies with current legislation and guidelines (i.e. materiality)
In addition, State aid requires that the contract change or new procurement to include the following conditions:
•
Wholesale access
•
Benchmarking
•
Clawback – applicable if the project is valued at over £150,000. In the case of Change Control the value of the community
project is added to the original contract value to determine the £150K threshold – therefore in all Change Control cases,
Clawback will apply. Clawback will be required to commence from completion of the last milestone
•
Reporting including transparency
•
Step changes (to the RSS) meets the requirements of FTTC and FTTP
•
Reconfirmation of aid intensity (range from 53% to 89%)
May 2013
RCBF & Call-Off Contract Guidance
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RCBF Guidance
Part 1 – Procurement: Change Control
DRAFT
• If the Local Authority determines following its assessment under the Materiality test that it can proceed to implement a RCBF project
under Change Control then the Change Control Procedure as set out under its existing contract must be followed. As a minimum the
following components should be included and/or considered in the Change Request:
1. Post codes – a list of post codes for the RCBF project area
2. Timing & Speed Requirements – details regarding timing or deadlines for the RCBF project to be completed. The Change Request
should also specify the minimum speed requirements – i.e. at least 24Mbps as RCBF funding can only be used to deliver NGA.
3. Quotation – see “Quotation” slide. The quotation format should be issued and completed by the Supplier as part of its response to the
Change Request. This will include all the necessary cost categories and allow Clawback to be monitored.
4. Milestones and Implementation Plan – an Implementation Plan detailing Milestones and timelines should be requested. The
milestones should be based on the exiting Milestone categories (Milestones 0, 1 & 2 as a minimum). It is the for Local Authority to
determine if it requires a Milestone 3, but is not a requirement for RCBF funding. A Completion Date must also be specified by the
Supplier as part of its response.
5. Payment in Kind – if the RCBF project has any payment in kind, this should be set out in the Quotation by the Supplier.
6. Eligible Expenditure – for the purposes of RCBF projects, DEFRA has agreed to allow the use of the existing Call Off Contract “Permitted
Expenditure” categories as detailed in Schedule 5.1 Milestone Payment and Claims Procedure (Appendix 2).
7. Additional Funding Terms – See separate slide on “RCBF Funding Terms”. Any specific requirements attached to the RCBF Funding
should be set out by the Local Authority in Schedule 5.4 “Additional Funding”.
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RCBF Guidance
DRAFT
Part 1 - Quotation
• The attached ‘Quotation’ template that has been developed which details all the relevant cost categories as per the Project Model that
can be used for Change Control purposes. In the event that a new procurement is undertaken then a new Project Model will need to be
completed.
• The Supplier should be requested to complete the Quotation template as part of the Change Request and submit back to the Local
Authority as part of its response to the Change Request along with details of the proposed Milestones, Implementation Plan and Speed
and Coverage template. A spread-sheet version of this Quotation template is attached to this Guidance.
RCBF Project Funding Request
<Project Name>
<Project Reference>
Estimated Project Costs
Private Match Funding
Item
Cost
FTTC
FTTC Vendor
FTTC Civils
£1,000,000
FTTC Power
FTTC Labour
FTTC Stores
FTTC Build
FTTC Connection
FTTP
FTTP Vendor
FTTP Civils
FTTP Labour
FTTP Stores
FTTP Build
FTTP Connection
Other Capex
Openreach Other Capex
Openreach Project Management delivery resources
Project Management delivery resources
Investment by Procured Supplier
Total Premises Passed (customers)
Max Commercial Investment per customer:
Expected take up (% connected):
Expected customers (premises connected):
Estimated Supplier Investment
Total Estimated Costs
Total Estimated Match Funding
£1,000,000
Community Contribution
Cash
Pledges / Pre sign ups
Other
Capital
Equity
Finance
Other
In Kind
Wayleaves
Community Civils
Other
Estimated Community Contribution
Headline Project Metrics
Estimated Project Costs
3,000
£250
35%
1,050
£1,000,000
Estimated Match Funding
£287,500
Grant Request
£712,500
£262,500
Intervention Rate:
Grant per premise:
Additional Revenue (over the
contract life)
Additional Opex (over the contract
life)
74%
£238
£0
£0
£25,000
£25,000
£287,500
• Note: The quotation template has been developed to allow it to align with the existing Project Model categories and will be used to
update the Project Model as part of the Change Control process.
May 2013
RCBF & Call-Off Contract Guidance
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RCBF Guidance
Part 1 – Procurement: Change Control (cont)
DRAFT
• Following the return of the Supplier response to the Change Request details will need to be submitted to DEFRA in line with the
guidance set out in the RCBF guidance pack. The RCBF project will then be subject to final governance approval by DEFRA, BDUK, and
the National Competence Centre to confirm State Aid approval. If all governance procedures are successfully completed, then DEFRA
will issue to the Local Authority a final Grant Offer Letter. The following parts of the Contract should then be updated as part of the
Change Control in line with the Change Control Procedure as set out in the original Call-Off contract:
1. Project Model – This should be updated to reflect:
– Any changes to milestone amounts (and/or new milestones) to include RCBF funding.
– Changes to the amount of Permitted Capex per quarter, and in total.
– Changes to the number of Premises Passed and Premises Connected.
– As a result of these changes, the Project Investment Ratio may change (if the ratio for the RCBF area is different to that in the
original Project Model).
– The Project Unit Margin should remain unchanged.
• Speed and Coverage Template – this will be up-dated with the post codes relating to the RCBF project as well as the phases within
which the postcodes will be delivered. The relevant speed thresholds for each postcode area should also be updated.
• Implementation Plan – this will need to be up-dated to reflect the implementation plan for the RCBF project. It will also need to include
the Completion Date.
• Schedule 5.4 – this should be updated to take account of any specific additional funding provisions agreed between the Local Authority
and the Supplier.
May 2013
RCBF & Call-Off Contract Guidance
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RCBF Guidance
Part 1 – Procurement: New Procurement
DRAFT
• Following the assessment made under the Materiality test, if the proposed change to the Call Off Contract to incorporate RCBF funding
is considered to be material under procurement law, it will be necessary for the Local Authority to undertake a new procurement
process.
• In determining the structure of a new procurement, the Local Authority should consider the range of procurement options that may be
available and should also take into account conditions which may be specific to its local supply market - i.e. are there other suppliers
who may wish to compete for the RCBF project.
• The outcome of the new procurement will result in the Local Authority entering into a separate contract with the successful supplier.
• For Community led RCBF projects which are not intending to align with an existing Local Authority led project, then it will be necessary
for them to undertake their own procurement procedure which complies with procurement regulations. These Community projects
should be referred to the RCBF Full Application handbook for further details on how it should conduct its procurement or be referred to
the RCBF website.
May 2013
RCBF & Call-Off Contract Guidance
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RCBF Guidance
Part 1 - RCBF Funding Terms
DRAFT
•The Grant Offer Letter provided to the Local Authority by DEFRA will contain a range of conditions that will need to be
complied with in order to ensure the RCBF funding has been administered by the Local Authority in line with those
conditions. It is for the Local Authority to determine the extent to which such conditions may need to flow down to the
Supplier. Some examples of these include:
1. Asset register (Clause 9 RBCF Funding Agreement) – retention of assets on an asset register, use and disposal of
assets.
2. Publicity requirements (Clause 12 RCBF Funding Agreement) – compliance to Section 3 of the RCBF Project Guide.
3. Audit/Inspection requirements (Clause 16 RBCF Funding Agreement).
•It is imperative that the Local Authority considers the impact of these requirements and agrees with the Supplier how
any specific terms should flow down into the Call Off Contract. Schedule 5.4 Additional Funding should be used to
capture these further requirements.
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RCBF Guidance
Part 1 - Quotation Spreadsheet
DRAFT
•RCBF Quotation Template
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RCBF Guidance
Part 2 - Community Led Applications
DRAFT
• For community led applications submitted directly to DEFRA, it will be necessary to determine if the proposed RCBF
project is targeting eligible premises (i.e. they are located in the Final 10% and therefore eligible for RCBF support).
DEFRA and BDUK will need to validate the target area through its appraisal process.
• DEFRA and BDUK will need to consult with the Local Authority on the outcome of the SCT in considering the
geographic coverage of a proposed community led RCBF project or identify opportunities to revise the boundaries of
a Community led RCBF project where it partially falls into the 90%.
• The process for considering the location of the community projects is set out below:
1. Local Authority/ BDUK/ DEFRA to meet as soon as the analysis is undertaken on the contracted SCT to establish
whether the proposed project will be covered by the County programme or not.
2. Where a Community led RCBF project entirely consists of eligible premises (i.e. they are all tagged in the SCT as
“no build”) then DEFRA and BDUK will complete the appraisal of a project application. Subject to a successful
outcome of the appraisal process, the project will be able to proceed.
3. Where all (or the vast majority) of premises fall into the existing county roll-out programme (i.e. in the 90%) then
the Community should be advised by the Local Authority that they will receive a NGA service through the main
county programme. DEFRA and BDUK would therefore reject the RCBF application. The template letter attached
to this guidance can be used by the Local Authority as the basis of this communication to the Community project.
May 2013
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RCBF Guidance
Part 2 - Community Led Applications (cont)
DRAFT
1. In the event that a number of premises fall into the existing county roll-out programme (i.e. they are partially
covered in the “90%”) then discussions would be held between the Community applicant, the Local Authority,
DEFRA and BDUK to establish if the project could be re-scoped to cover other areas defined as “no-build” in the
SCT.
i)
Where the Community project is partially covered by the County programme, then it will be for the Local
Authority to determine at its’ sole discretion if it wishes to raise a Change Request request to its existing
Supplier to establish the impact of whether such changes can be made to the County programme.
ii)
In the event that the Local Authority does not wish to raise a Change Request, then the Community Project
will only be able to progress where it can be clearly established that premises are eligible premises for
funding under the RCBF. Otherwise it will be rejected as part of the DEFRA and BDUK decision-making
process.
iii)
If the Local Authority decides it does want to proceed with a Change Request, then the Local Authority will
ask the Supplier to undertake an assessment of the impact. The outcome of any assessment will be subject
to consultation between the Local Authority, DEFRA and BDUK prior to any decision being made by the Local
Authority about whether it wishes to proceed with a Change Control to its existing County programme or
not.
Note: Local Bodies must note that under the terms of the Call Off Contracts the elements of the SCT provided by
the Supplier (including the “no build” tags) cannot be disclosed to any Community Project.
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RCBF Guidance
DRAFT
Part 2 – Sample Letter
•The sample letter set out below can be used as the basis of informing community projects that NGA broadband will be
provided under the county scheme.
May 2013
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