Consultation outcome

Type C Post Public Review - Closure Notice Update - June 2023

Updated 16 April 2024

1. Introduction

On 5 January 2023, Building Digital UK (BDUK) published a Prior Information Notice (PIN) reference number 2023/S 000-000266 informing stakeholders of the intention to procure a supplier for a cross-regional framework contract (“the framework”, also known as type C) to award call-off contracts over the proposed four (4) year term of the framework.

The cross-regional framework will complement the existing type A local supplier contracts (procured via a Dynamic Purchasing System) and the type B regional supplier contracts (procured via Restricted Procedure). This is ensuring BDUK’s commitment to deliver the roll out of gigabit-capable broadband across the UK. BDUK will continue to work with the devolved administrations to identify the best way to deliver Project Gigabit in their areas.

The framework is intended to appoint a single supplier for the Project Gigabit Programme, whose role would be to target premises in respect of which:

1. No or no appropriate market interest has been received through market engagement steps for proposed type A or type B procurement areas.

2. BDUK has not awarded a contract following a procurement for type A or type B areas.

3. Type A or type B contracts that cover these premises fail to be delivered by the supplier and are descoped or terminated.

4. Type C provides demonstrably better value for money or pace of build or coverage.

Call-off contracts awarded under the framework will subsidise the design, build and operation of gigabit-capable supplier networks. These networks will provide the long-term sustainable availability of wholesale gigabit broadband services in the hardest to reach parts of the UK.

For more information see the full PIN and section 8.3 of the Detailed Overview of the Gigabit Infrastructure Subsidy Scheme.

2. National Rolling Open Market Review

BDUK has now completed a mapping process for all areas in England and Wales through the Open Market Review (OMR) and Public Review (PR) process. BDUK also launched the National Rolling Open Market Review (NR OMR) cycle with the first round commencing in January 2022.

The purpose of the NR OMR, which operates on a 4-monthly basis (January, May and September), is to ensure that BDUK has the most up to date information about suppliers’ existing and planned build over the subsequent 3-year period. Further information on the NR OMR process can be found in our Open Market Review (OMR) and Public Review (PR) subsidy control classification guidance document.

This will support better strategic planning and prioritisation of procurement Intervention Areas (IAs), streamline the OMR process and minimise the risk of BDUK intervening in an area where there are viable commercial build plans.

BDUK runs the formal OMR and PR process ahead of procurements to give all suppliers the opportunity to submit their commercial build plans and ensure as far as possible that we are not applying subsidy where viable commercial plans for gigabit-capable infrastructure exist. We also undertake soft market testing and Pre-Procurement Market Engagement (PPME) to test market appetite and further shape IA design for our public investment plans.

The supplier submissions we review as part of the NR OMR will also assist us with understanding current and future plans for broadband infrastructure (whether Next Generation Access, ultrafast or gigabit-capable).

As of June 2023, BDUK has now completed the evaluation process of responses received from suppliers to the January 2023 NR OMR and published our findings. Further information on the January 2023 NR OMR can be found within the January 2023 NR OMR Closure Notice published 14 June 2023.

The latest iteration of the NR OMR (May 2023) launched on 19 May and closed for responses on 20 June 2023. If you have any questions on the May 2023 NR OMR process, please refer to the Request For Information GOV.UK page.

3. Post Public Review updates

As set out above and within section 2.2 of BDUK’s Open Market Review (OMR) and Public Review (PR) subsidy control classification guidance, we continue to process the data submitted to the NR OMR in the same way as that submitted to previous local OMRs.

The data outputs are being used to develop mapping categorisations of Unique Property Reference Numbers (UPRNs). This will generally be fed into a PR process for new areas. However, If BDUK receives new data for UPRNs which have been the subject of a previous PR determination, if it meets the evidential requirements, BDUK may use this data to update the previous areas by area PR determinations at our own discretion.

4. Geographic scope

BDUK will apply the outcomes of the NR OMR process to develop the design of IAs for the local supplier contracts (type A) or regional supplier contracts (type B) procurements. We are now also assessing the IAs that may form the scope of the planned framework (type C), in particular for the initial call-offs under the framework.

The first areas that have been identified for potential inclusion (as at June 2023) in the two proposed initial call-offs (Call-Off 1 and Call-Off 2) currently comprise premises in:

Call-Off 1 - West Berkshire, West and Mid Surrey, North Wiltshire and South Gloucestershire, Hertfordshire, Staffordshire and Lancashire

• West Berkshire (Lot 13C)

• West and Mid Surrey (Lot 22C)

• North Wiltshire and South Gloucestershire (Lot 30C)

• Hertfordshire (Lot 26C)

• Staffordshire (Lot 19C)

• Lancashire (Lot 9C)

Call-Off 2 - Wales and Devon

• West and North Devon (Lot 6C)

• North West Wales (Lot 42C)

• Mid Wales (Lot 43C)

• South East Wales (Lot 44C)

BDUK intends to procure the framework and two initial call-offs at the same time; and award subsequent call-offs under the framework to the successful tenderer in due course.

5. Type C Changes from March 2023

On 24 March 2023, BDUK published the following Type C Post Public Review - Closure Notice updates March 2023 document on GOV.UK which included a number of areas identified for potential inclusion in the initial call-offs to be procured at the same time as the framework.

These areas were selected based on the findings of the local PRs previously conducted along with information derived from the September 2022 NR OMR findings which can be found here.

Since March 2023, BDUK has developed the proposed IAs for the initial call-offs in more detail, reviewing the Lots that will comprise the initial call-offs scope. This has resulted in the following changes:

Inclusion of the following areas:

• Lancashire (Lot 9C)

• South East Wales (Lot 44C)

Removal of the following area:

• Cornwall and Isles of Scilly (Lot 32C)

Following the completion of the evaluation process of responses received from suppliers to the January 2023 NR OMR, the subsequent subsidy control classification results were overlaid and used by BDUK to design and create IAs for the initial call-off areas. Further information on the January 2023 NR OMR can be found within the January 2023 NR OMR Closure Notice published 14 June 2023.

BDUK is confident that integrating these NR OMR findings will ensure the best possible outcome for the two initial call-offs, maximising both coverage and value for money accordingly. Our interventions will always flex to respond to both changes in the dynamic marketplace, and the appetite for our procurements. Further information on the NR OMR process can be found in our Open Market Review (OMR) and Public Review (PR) subsidy control classification guidance document.

BDUK also proceeded to complete several rounds of PPME with suppliers to understand levels of interest from February to May 2023. As a result of the findings from these exercises, BDUK received credible feedback which indicated supplier appetite existed to deliver the suggested Cornwall and Isles of Scilly (Lot 32C) IA via a type A local supplier contract or type B regional supplier contract instead, as such this area has not been included in the initial call-offs.

In addition to this, some parallel type A local supplier contract and type B regional supplier contract PPME activities conducted by BDUK did not generate credible supplier interest in a number of Lots. As such, BDUK is now seeking to explore the possibility of their delivery via the framework. Therefore, the Lancashire (Lot 9C) and South East Wales (Lot 44C) areas have now been included in the initial call-offs.

As a result of the findings from these market engagement exercises, BDUK has decided to progress with the 10 geographic areas listed above for inclusion in the initial call-offs under the framework. Further details can be found below, and the draft IA maps are available to view in Annex B.

Please see full details of the January 2023 NR OMR outputs and the Welsh Government Public Review. (A preceding OMR was undertaken in 2021).

6. Forthcoming procurement

From February to May 2023, BDUK carried out market engagement activities to seek feedback from suppliers about the design of the proposed IAs and the suggested procurement type C - cross-regional supplier framework and also the capacity of the market to bid for a potential procurement.

The total public funding investment will be based on the final number of premises requiring subsidy. BDUK will confirm a budget drawn from public funding within the forthcoming tender documentation. Details of any restrictions on the use of public subsidy will be explained within the tender documentation.

The indicative number of UPRNs allocated to the two initial call-offs are as follows:

Call-Off 1 - West Berkshire, West and Mid Surrey, North Wiltshire and South Gloucestershire, Hertfordshire, Staffordshire and Lancashire

Lot Name	Indicative number of UPRNs
Hertfordshire (Lot 26C)	6,895
Lancashire (Lot 9C)	15,695
North Wiltshire and South Gloucestershire (Lot 30C)	13,345
West and Mid Surrey (Lot 22C)	8,018
Staffordshire (Lot 19C)	11,728
West Berkshire (Lot 13C)	1,860
Total Premises	57,541
Indicative Contract Value	£149,700,000

Call-off 2 - Wales and Devon

Lot Name	Indicative number of UPRNs
West and North Devon (Lot 6C)	21,430
North West Wales (Lot 42C) Mid Wales (Lot 43C)	17,437
South East Wales (Lot 44C)	8,242
Total Premises	47,109
Indicative Contract Value	£139,147,319

The type C cross-regional supplier framework will comprise two stages:

1. Plan and Build

2. Monitor and Clawback

BDUK will prioritise, where possible, building in areas which currently have the lowest speeds.  The focus of each call-off contract will be interventions in final 20% (f20) premises in the UK that are not commercially viable for the market to build without government intervention. BDUK will carry out continuous coverage mapping to identify f20 premises. This will be updated regularly and in particular ahead of the start of the procurement process for each framework call-off.

The cross-regional framework supplier contract only includes one category of intervention referred to as the Initial Scope, where the supplier should build as quickly as possible. We will always either descope Under Review premises or defer build to them and we will always descope Grey or Black premises.

The framework agreements are intended to be single supplier agreements and will primarily include eligible premises in locations identified with no effective competition, potentially covering a county or multiple counties. The frameworks will also include IAs that were not successfully procured through other procurements. Suppliers will be required to build to any premises called off under these frameworks.

As noted above, the procurement approach will include an ongoing continuous improvement cycle and this could include the use of other valid procurement procedures as set out in the  Public Contracts Regulations 2015 (PCR2015).

The Authority, BDUK, reserves the right not to proceed to tender for these IAs and withdraw the procedure for the competitive sourcing process at any time. Any amendments will be done in line with the Procurement Regulations.

Suppliers acknowledge and accept that by issuing this document (Closure Notice) BDUK shall not be bound to progress or conclude any related cross-regional framework procurement activity.

Under no circumstances shall the Authority incur any liability in respect of the information contained in this Closure Notice or any supporting documentation.

7. Timescales

The following table summarises the indicative timescales for the procurement (subject to change):

Area	Procurement start date	Estimated contract award date
Call-Off 1 West Berkshire (Lot 13C) West and Mid Surrey (Lot 22C) North Wiltshire and South Gloucestershire (Lot 30C) Hertfordshire (Lot 26C) Staffordshire (Lot 19C) Lancashire (Lot 9C)	July 2023	April to June 2024
Call-Off 2 West and North Devon (Lot 6C) North West Wales (Lot 42C) Mid Wales (Lot 43C) South East Wales (Lot 44C)	July 2023	April to June 2024

See Project Gigabit quarterly updates for more information on procurement timelines.

8. Conclusion

BDUK would like to thank all suppliers who provided us with feedback regarding the proposed eligible areas for government intervention via the market engagement exercises.

The responses and outputs derived from these exercises have allowed us to gain further confidence that the proposed interventions are targeting the right areas for subsidy, ie areas which are not commercially viable and require government intervention to address market failure.

BDUK has developed the IAs which were proposed to the market during the PPME phase. Please see Annex B which sets out the draft IA maps at UPRN level. These maps identify the areas where premises are eligible for subsidy.

A full list of White and Under Review UPRN outputs from the January 2023 NR OMR are available on request to suppliers via ukgigabit@BDUK.Zendesk.com.

9. Annex A - Map indicating locations of eligible premises

Please refer to the January 2023 NR OMR outputs specific to the Lots and regions referenced above.

The postcode-level maps accessible via the above link indicate areas where those premises eligible for subsidy are located ie White areas. These eligible premises may be included within the IAs.

Black, Grey and Blue (Under Review) areas indicate where those premises ineligible for subsidy are located.

Please refer to the Welsh Government’s PR outputs specific to the regions referenced above (noting that BDUK has overlaid the January 2023 NR OMR outputs with the Welsh Government’s PR outputs).

BDUK has used the January 2023 NR OMR data to assess and evaluate supplier coverage claims to identify eligible Gigabit White premises in the proposed IAs. This aligns with the process as set out in BDUK’s Open Market Review (OMR) and Public Review (PR) subsidy control classification guidance document.

10. Annex B - Map of Proposed Intervention Areas

The maps below highlight the IAs that have been approved following the conclusion of the type C cross-regional framework PPME exercise.

The premises-level maps below indicate eligible premises that form the proposed IAs for the initial two call-off areas.

Those premises which are highlighted in orange are referred to as the Initial Scope premises that will be targeted for subsidy.

These nine maps are accompanied by a list of UPRNs that fall within the IAs, clearly demarcating which premises are within the Initial Scope which suppliers will be able to request via Atamis once the two initial call-off procurements are live. If you are unable to access Atamis, please contact the Supplier Mailbox bduksuppliers@dcms.gov.uk.

10.1 Call-Off 1 - West Berkshire, West and Mid Surrey, North Wiltshire and South Gloucestershire, Hertfordshire, Staffordshire and Lancashire

West Berkshire (Lot 13C) 1,860 Initial Scope UPRNs

West and Mid Surrey (Lot 22C) 8,018 Initial Scope UPRNs

North Wiltshire and South Gloucestershire (Lot 30C) 13,345 Initial Scope UPRNs

Hertfordshire (Lot 26C) - 6,805 Initial Scope UPRNs

Staffordshire (Lot 19C) 11,728 Initial Scope UPRNs

Lancashire (Lot 9C) - 15,695 Initial Scope UPRNs

Call-Off 2 - Wales and Devon

West and North Devon (Lot 6C) 21,430 Initial Scope UPRNs

North West Wales and Mid Wales (Lots 42C and 43C) - 17,437 Initial Scope UPRNs

South East Wales (Lot 44C) 8,242 Initial Scope UPRNs

Please contact us at bduksuppliers@dcms.gov.uk if you have any questions relating to the cross-regional framework.

11. Annex C - Update April 2024

BDUK is currently in the process of establishing a Cross-Regional Supplier Framework, known colloquially as Type C, to award call-off contracts over the life of the GIS Programme. Call-off contracts awarded under the Cross-Regional Framework will subsidise the design, build and operation of gigabit-capable supplier networks providing long-term, sustainable availability of wholesale gigabit broadband services in the hardest to reach parts of the UK.

All lots proposed for the Type C procurement in England have been part of a previous Public Review (PR), open to all stakeholders, and published on both BDUK’s website and that of neighbouring Local Bodies (Scotland PR website and Wales PR website).  

BDUK intends to award the Type C framework to a single supplier. 

There are 10 IAs being considered for call-offs (with another 2 additional areas listed below), these may be split across call-off three, four, five, and six with the winning supplier being expected to deliver all call-off contracts awarded within the agreed Cross-Regional Supplier Framework build timelines.

11.1 Indicative Call-Off Values

The tables below give a breakdown of the indicative UPRNs and contract values for each Intervention Area. It should be noted that BDUK expects all the Intervention Areas listed below to be included in the Type C call-off(s) subject to credible evidence being supplied on alternative routes to market as part of the market engagement exercise.

Call-Off 3 - East and South Shropshire, North Herefordshire, North Wales, Southwest Wales

Lot Name	Indicative Number of UPRNs
Lot 25C East and South Shropshire	9,411
Lot 15C North Herefordshire	2,485
Lot 42C North Wales	16,570
Lot 45C Southwest Wales	21,193
Total Premises	49,659
Indicative Contract Value	£136,125,710

Call-Off 4 - Mid Devon, South Devon, North Somerset

Lot Name	Indicative Number of UPRNs
Lot 6C Mid Devon	6,379
Lot 6.01C South Devon	7,699
Lot 6.02C North Somerset	9,274
Total Premises	23,352
Indicative Contract Value	£69,889,020

Call-Off 5 - Essex, North East England

Lot Name	Indicative Number of UPRNs
Lot 21C Essex	8,957
Lot 4C North East England	13,237
Total Premises	22,194
Indicative Contract Value	£61,386,046

Call-Off 6 - Rest of Scotland

Lot Name	Indicative Number of UPRNs
Rest of Scotland	96,985
Total Premises	96,985
Indicative Contract Value	£207,461,260

BDUK reserves the right not to proceed with call-offs three, four, five, and six for these intervention areas. BDUK reserves the right to proceed with call-offs for any one intervention area, more than one or all these intervention areas. 

BDUK is conducting market engagement activity for these lots, however this is not a commitment from BDUK to proceed with a call-off, whether for any one intervention area, more than one, or all the intervention areas. 

Should BDUK make the decision to proceed to call-off, this will be communicated with the market as appropriate. The call-offs will be run through BDUK’s e-Tendering site Atamis for the successful Type C supplier. 

BDUK is running Type A and B procurements in England. To provide some resilience to the programme should the procurement for these areas not complete satisfactorily, BDUK is also using this market engagement opportunity to seek feedback from the market on these areas with regards to alternative routes to market, including Type C. The tables below give a breakdown of the values for each additional Intervention area.  

BDUK reserves the right to include the following additional IAs within Type C call-off(s) should the procurement for these areas not complete satisfactorily and should they then subsequently become eligible for inclusion within Type C, according to the GIS Procurement Decision Tree.

11.2 Additional Lots

Indicative Additional Lots

Lot Name	Indicative Number of UPRNs
Lot 32 Cornwall and Isles of Scilly	17,249
Lot 24 Worcestershire	18,469
Total Premises	35,718
Indicative Contract Value	£78,401,774

11.3 Timescales

The following table summarises the indicative timescales for the Call-Offs to be awarded (subject to change):

Area	Call-Off award date
Call-Offs 3 to 6 East and South Shropshire Mid Devon North Herefordshire Essex Southwest Wales North Wales South Devon North Somerset Rest of Scotland North East England	Approximately November 2024

See Project Gigabit quarterly updates for more information on procurement timelines.