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Construction Contract Leads

Scope

Description

Portsmouth City Council - the 'Council - will shortly be inviting tenders from suitably qualified and experienced operators for the operation of the Spinnaker Tower - the 'Tower' - on a long term mutually incentivised partnership basis.

The Tower

The Spinnaker Tower is located on the waterfront within Gunwharf Quays shopping centre and is a prominent landmark offering views of the city, the Solent and the Isle of Wight. It is visible to the nine million passengers who sail and cruise through Portsmouth Harbour each year as well as the eight million visitors to Gunwharf Quays which offers outlet designer shopping.

The Tower is Portsmouth's most prominent landmark, 170m in height with 3 upper viewing platforms at 100, 105 and 110 metres providing views of Portsmouth Harbour and the Solent. The tower opened in 2005 attracting 100,000 visitors in the first two months of opening.

There is a reception at the base of the building with ancillary interpretation space, entertainment and leisure uses, ticketing, plant, management and staff facilities. There are two cafes - the ground floor Spinnaker Kitchen and Bar and the Cloud Café located on View Deck 2, 105 metres up. There is an additional podium area at ground level which is activated over the festive period for a Christmas market, with potential for it to be used permanently as commercial space.

Permitted Uses, Opening Times & Access

Under the new contract the primary function of the Tower must remain a public viewing tower, to be open in line with hours set out within the Council's specification. Through the procurement process suggestions for incorporation of historical and maritime components, that may also include literary and cultural references associated with the wider city, will be considered.

The Operator must ensure that the Tower is open to the public for a minimum of 8 hours/day April to September and 6 hours/day October to March except Christmas Day. Core opening times are 10.00 - 18.00 during summer months and 6 hours within the core times during the winter months (e.g.10.00 - 16.00). The Operator may open earlier or later to support other activities such as breakfasts or evening events and functions. No curfew has been set.

The Council will require use of the Tower for its own direct activities and in support of wider community activities to a total of 47 hours free of charge per year, further details are provided within the specification.

Suggestions for complementary ancillary uses will be permitted.

Examples include but are not limited to:

• Food and beverage options such as a café, fine dining etc.

• Entertainment including comedy evenings, cocktail evenings etc.

• Virtual reality 'thrill experiences'

• Private Functions including weddings, corporate events etc.

Proposals for other activities / experiences will be considered. Suggestions for the use of the overall space, including the associated capital investment, will be considered. For example, the opportunity for development of the underused podium deck. Any investment must be solely funded by the operator.

Contract Term, Estimated Value & Target Commercials

Award of the contract is targeted for 7th August 2026. The successful operator will be required to seamlessly commence operations under a lease with associated concession arrangement from 11th October 2026 following expiry of the lease held with the current incumbent operator on 10th October 2026. The lease and associated concession contract will be let on a 25-year basis. Break clauses subject to 12 months notice will be included for at years 10, 15 and 20 of the lease.

The lease will be subject to rental / management fee and revenue share payments from the operator to the Council. The Council is targeting a guaranteed rental payment of £350k total over the initial 3 years of the lease to allow for profiling of rent in view of mobilisation costs, building up sales and the impact in the 1st year of the Council's planned lift refurbishment works.

From year 4 onwards the target average per annum payment thereafter has been set at £220k. Rental payments are to be made in advance on a quarterly basis per annum. Lease payments will be subject to 5 yearly rent reviews with increases subject to CPI adjustments.

A minimum revenue share % of 3% will apply with operators able to bid back an increased share % up to a maximum of 10%. The revenue share proposed by operators may vary over the term of the agreement but must always be within the 3% - 10% min / max range stated. Revenue share payments are to be made within 30 days at the end of each contract year.

In addition to rental and revenue share payments, the Council will also recover reinstatement insurance premium costs from the Operator. The Council is currently seeking specialist insurance advice which will inform the per annum figure to be accounted for within Operator commercial models. The Council is targeting to issue an insurance cost recovery value by week 3 - 4 of the tender period.

The Council will reserve the right to alter and refine rent and revenue targets over the course of the procurement process and may issue revisions which alter the values and / or introduce pass/fail value requirements following evaluation of 1st stage tenders and completion of negotiation meetings in the event that the Council opts to undertake a 2nd stage of competitive tendering.

The contract will be subject open book reporting. The Operator will be required to report on revenues generated by business activities on a quarterly basis and upon request within 10 working days along with provision of supporting evidence. At the end of each operating year the Operator will be required to produce full audited accounts for operation of the Tower, providing full details of sales, costs, O/H contribution, profits, dividends, etc.

Based upon current revenue and subject to indexation the Council estimates that the successful Operator could achieve a 25-year turnover figure of approx. £90M. However, the Council considers that there are significant opportunities to increase revenue though investment, diversification of activities, food & beverage offer, sponsorship, advertising, etc. which could have a major positive impact upon revenue generation, potentially increasing revenue generation to £110M and beyond over the 25 year term.

However, it should be noted that all estimates in respect of the value of the business opportunity are purely indicative and provided to comply with the requirements of the Procurement Act 23 in relation to publication of estimated contract values.

Maintenance, Servicing & Facilities Management

The Council will retain responsibility for the repair and maintenance of the items listed below which are further detailed within the procurement documents:

• External Structure Works and inspections including the spire, view decks, tower legs, concrete shafts, ribs, bows, transfer landings and substructure, but excluding the base building and podium level.

• Structural Glazing and Curtain Walling System on View Decks

The Council is also progressing with lift refurbishment and other structural maintenance works which are currently scheduled to take place during the 1st year of the lease.

Operators should be aware that a closure period for the viewing tower will be required to undertake these works. The exact length and scheduling of these works have yet to be confirmed but are likely to be approximately 6 months in duration. The Council will fund and deliver the works and will work with the Operator to agree the timing of any closures where possible. Operators should note that future lift refurbishment / replacement responsibility will fall with the Operator.

The Operator will be responsible for all internal repairs and maintenance and to keep the property in good repair and condition including, but not limited to:

• Reactive repairs and planned maintenance

• Decorations and finishes

• Fixtures and fittings

• Sanitary facilities

• Bar and kitchen areas

• Surfaces in plant rooms, internally to the bows and spire

The Operator will be responsible for the following external repairs and maintenance and to keep the property in good repair and condition including, but not limited to:

• Base building - Floors, Walls and Roof

• Podium level

• Doors and Windows

• External decoration works of the legs, concrete shafts, ribs, bows, transfer landings, base building, podium level, brise soleil etc.

• Paving surrounding the tower and at podium level

• Balustrades/Handrails round the podium level, podium stairs, terrace level and promenade level

The Operator will be required to undertake all Planned Preventative Maintenance (PPM) and reactive repairs including maintenance, servicing and replacement (both minor and major) to those building elements highlighted as tenant responsibility.

The Operator is responsible to keep all M&E, both internal and external to the Tower, in good condition and maintenance including, but not limited to:

• Servicing

• Reactive and Planned Repairs/Maintenance

• Surveys

• Lifecycle replacement

• Lift maintenance / replacement

The Operator shall provide the M&E maintenance service through a regular and organised regime and provide the Council with records of the works such as EICRs etc.

Beyond the maintenance activities listed above, the Operator will be responsible for all building management activities required to ensure that the Tower is kept safe, clean and secure, including for:

• Statutory Compliance Testing

• Heating & Lighting

• Cleaning

• Security

• Utilities and Environmental Management

• Fire Detection & Emergency Lighting

• Accessibility, Health & Safety and Safeguarding

Total value (estimated)

• £168,161,103 excluding VAT
• £201,793,323 including VAT

Above the relevant threshold

Contract dates (estimated)

• 11 October 2026 to 10 October 2051
• 25 years

Options

The right to additional purchases while the contract is valid.

Next Placed Supplier Contingency

The Council reserves the right to engage the next placed highest scoring supplier (ranked 2nd) to deliver the contract in the event that any of the following events occur during the award, mobilisation and delivery of the services during the 3-year base term as well as during any extension periods:

• The Council is unable to agree and execute terms of contract with the preferred bidder identified through evaluation of the submitted tenders

• The preferred bidder identified through evaluation of the submitted tenders fails to mobilise and commence the services in line with the agreed programme, or is significantly delayed in meeting programme milestones and is highly likely to not commence services in line with the agreed programme

• The contract with the preferred bidder identified through evaluation of the submitted tenders is terminated due to:

o Material breach

o Non-material persistent breach

o Failure to meet service levels and KPIs

o Not meeting Conditions of Participation - Exclusion grounds, insurance, financial standing, accreditations, etc.

o Inability to agree price increases in line with terms

o Inability to agree price changes, specification changes, event in the event of materialisation of identified known risks.

The next placed supplier will only be engaged at the Council's discretion and subject to the supplier evidencing ability to:

• Meet all Conditions of Participation

• Deliver the requirements as set out in the specification including for any updates made by the Council

• Honour the terms & conditions included within the original procurement

• Deliver the service delivery proposals included within their original tender submission as a minimum

• Honour the pricing elements included for within their original tender submission, subject to reasonable application of relevant CPI indices, as a minimum with a requirement to mitigate any increases where possible

In the event that the Council is unable to reach agreement with the next placed supplier the Council may, at its sole discretion engage with the supplier that ranked immediately below the next placed supplier (ranked 3rd) from the evaluation process to deliver the contract subject to the requirements set out above.

Main procurement category

Services

CPV classifications

• 45212170 - Entertainment building construction work
• 45212310 - ÂÜÀòÔ­´´ work for buildings relating to exhibitions
• 45212350 - Buildings of particular historical or architectural interest
• 45212421 - Restaurant construction work
• 45212423 - Cafeteria construction work
• 45212500 - Kitchen or restaurant conversion
• 45213112 - Shop units construction work
• 45262700 - Building alteration work
• 45330000 - Plumbing and sanitary works
• 45350000 - Mechanical installations
• 45420000 - Joinery and carpentry installation work
• 45432100 - Floor laying and covering work
• 45442110 - Painting work of buildings
• 45442121 - Painting work of structures
• 45442180 - Repainting work
• 45442300 - Surface-protection work
• 45443000 - Facade work
• 45451000 - Decoration work
• 45452000 - Exterior cleaning work for buildings
• 45453100 - Refurbishment work
• 50750000 - Lift-maintenance services
• 50850000 - Repair and maintenance services of furniture
• 50882000 - Repair and maintenance services of restaurant equipment
• 51100000 - Installation services of electrical and mechanical equipment
• 55300000 - Restaurant and food-serving services
• 55400000 - Beverage-serving services
• 55900000 - Retail trade services
• 63513000 - Tourist information services
• 63514000 - Tourist guide services
• 70332200 - Commercial property management services
• 79340000 - Advertising and marketing services
• 90911200 - Building-cleaning services
• 90911300 - Window-cleaning services
• 92000000 - Recreational, cultural and sporting services
• 98350000 - Civic-amenity services

Contract locations

• UKJ31 - Portsmouth

Participation

Legal and financial capacity conditions of participation

EXCLUSION GROUNDS

Assessment in line with PA23 requirements in relation to excluded and excludable grounds.

The Council will allow for representation from suppliers in line with PA23 requirements in relation to excludable grounds, including for substitution of proposed sub-contracting arrangements.

The Council will apply discretion and allow for representation from suppliers in relation to excludable grounds in line with PA23 requirements, including for substitution of proposed sub-contracting arrangements.

FINANCIAL STANDING

Business Risk Assessment

Bidders must attain a business risk score calculated using Credit Safe financial ratios of 50 or above to pass. If below or score is unavailable, bidders must provide a satisfactory

review of financial information against profit/loss, liquidity, acid test, etc. or provision of a guarantee from a parent company or other legally bound guarantor with a business risk

score of 50 or above.

Turnover Assessment

Bidders must demonstrate a recorded turnover within latest set of accounts of at least approx. £1,200,000, a provision of a guarantee from a parent company or other legally

bound guarantor with a recorded turnover within latest set of accounts of at least approx. £1,200,000 or if Suppliers are unable to meet the minimum turnover levels but feel that they are able to demonstrate alternative evidence of financial capacity they are instructed to submit this in order that the council may consider the information and provide a decision that will be final.

INSURANCE

The Council will be asking for insurance levels to be set as follows -

• Public & Products Liability Insurance - £10M in respect of any one occurrence, the number of occurrences being unlimited, but in the aggregate in respect of pollution and products liability.

• Employees Liability Insurance - £10M in respect of any one occurrence, the number of occurrences being unlimited

• Professional Indemnity Insurance - £1M each and every claim or in the annual aggregate with auto-replenishment

GDPR

Suppliers must confirm that they have in place, or that they will have in place by the award of the contract, the human and technical resources to perform the contract to ensure

compliance with the UK General Data Protection Regulation and to ensure the protection of the rights of data subjects.

&

Suppliers have provided details to the Council's satisfaction, of the technical facilities and measures (including systems and processes) in place, or will have in place by contract

award, to ensure compliance with UK data protection law and to ensure the protection of the rights of data subjects.

Technical ability conditions of participation

OPERATIONAL CASE STUDIES

Bidders are required to submit between one (1) and three (3) Operational Case Studies (OCS) relating to contracts that the Operator is either currently delivering or, for specific

experience elements only, has delivered within the last five (5) years. Bidders must ensure that, collectively, the case study submission demonstrates coverage of all the required elements set out below, with at least one case study addressing each element.

Multiple case studies relating to the same client organisation are permitted, provided that each submission relates to a discrete and distinct contract. Case studies will be assessed

holistically and must, as a minimum, demonstrate evidence of the requirements listed below in order to achieve a pass. Failure to demonstrate the minimum levels of relevant experience will result in a failed assessment.

• Current experience (not from a past arrangement) of successfully operating a regionally significant visitor / leisure attraction with a footfall of at least 50k per annum and a turnover of £1m. For the purposes of this and further requirements, a regionally significant visitor / leisure attraction may include destination shopping centres, destination museums, landmark visitor attractions, major cultural or heritage sites, waterfront or tourism led destinations, or other comparable leisure attractions. This should be demonstrated on at least 1 of the case studies submitted.

• Experience of successfully delivering day to day site operations, facilities management, statutory compliance & day to day maintenance responsibilities at an operational site. This should be demonstrated on at least 1 of the case studies submitted.

• Current experience (not from a past arrangement) of developing, delivering and managing marketing & promotion activities on at least 1 of the case studies submitted.

• Experience of successfully managing delivery of Planned Preventative Maintenance (PPM) programmes of repair, refurbishment and replacement works on at least 1 of the

case studies submitted.

• Current experience (not from a past arrangement) of running a visitor / leisure attraction on a commercial basis including for taking all or substantive risk on sales, costs and

profit/surplus generation on at least 1 of the case studies submitted.

HEALTH & SAFETY AND ENVIRONMENTAL HEALTH

HSE Enforcement / Remedial Orders

The Council will not select suppliers that have been in receipt of enforcement/remedial action orders unless the supplier can demonstrate to the council's satisfaction that

appropriate remedial action has been taken to prevent future occurrences or breaches.

Prosecution & Enforcement

The serving of enforcement notices and any prosecutions will not result in an automatic fail. The severity of each individual case and the robustness of the measures implemented to help ensure against re-occurrence will be assessed by professionals employed by the Council.

HSE FFI Charges

The nature of the FFI and the robustness of the post incident action taken will be assessed on the basis of reasonableness. Any concerns will be relayed to a Health & Safety professional employed by the Council who may seek further information.

Environmental Health Enforcement

The Operator confirms that it has not, within the last five (5) years, been subject to any Environmental Health enforcement action (including statutory notices, improvement

notices or prohibition notices relating to pests, hygiene, public health or environmental

health matters). Where such action has occurred, the severity of each individual case and the robustness of the measures implemented to help ensure against re-occurrence will be assessed by professionals employed by the Council who may seek further information.

Particular suitability

Small and medium-sized enterprises (SME)

Submission

Enquiry deadline

6 May 2026, 11:59pm

Submission type

Tenders

Tender submission deadline

15 May 2026, 12:00pm

Submission address and any special instructions

Tenders may be submitted electronically

Yes

Languages that may be used for submission

English

Award decision date (estimated)

8 June 2026

Recurring procurement

Publication date of next tender notice (estimated): 10 October 2050

Award criteria

Other information

Description of risks to contract performance

The Council has identified the following known risks & opportunities that may occur during the duration of the term of the contract and may positively or negatively impact the scope, scale, value, timescales, end user demand, etc. related the contract:

• Development and changing demographics of Portsmouth area which could impact positively or negatively on operator revenues

• Marco and micro environmental impacts on utilities and other costs which could impact operator costs

• Changes to VAT levels and other impacts of taxation which could impact operator costs

• Local Government Review impacts including for assignment of contract to successor unitary authority and any new requirements / objectives of the new authority which may require alterations to the technical scope, contractual and commercial structure of the arrangements

• Unforeseen maintenance requirements which could increase operator costs and impact revenues if closures are required

• Significant development in sponsorship and advertising interest in the Tower could significantly increase revenue generation for the operator

• Investment into the Tower by the operator could significantly increase revenue generation

• Inflation and other cost of living impacts which could increase or decrease operator revenues and costs

• Changes to National Living Wage, National Insurance and other factors which could impact operator employment costs

• Increased or decreased competition from other public or privately run leisure attractions which could impact operator revenues

• Introduction of new technologies, systems and processes which could reduce operator costs and / or increase revenues as well as impacting technical scope

• Introduction of new leisure activities through market innovations that could open up new operator revenue opportunities and impact technical scope

• Changes to relevant government policy / legislation which could increase or decrease operator revenues & costs, as well as potentially mandating changes to the technical scope

• An endemic or pandemic event similar to Covid 19 which could increase costs and / or reduce demand.

The Council has identified the risks and opportunities above associated with the delivery of this contract. In accordance with Schedule 8 of the Procurement Act 2023, the Council reserves the right to modify the contract, without initiating a new procurement procedure, should any of these risks materialise during the contract term.

Any such modification will be limited to addressing the consequences of the known risk and will not alter the overall nature of the contract. Where applicable, a Contract Change Notice will be published in accordance with the requirements of the Act.

Conflicts assessment prepared/revised

Yes

Procedure

Procedure type

Competitive flexible procedure

Special regime

Concession

Competitive flexible procedure description

In respect of application of the Procurement Act 23, the Council's position is that the contract falls under the definition of a concession contract as set out within Section 8 of the Procurement Act 2023 and that therefore only the aspects of the Procurement Act 2023 and Procurement Regulations 2024 that apply to 'special regime' contracts are of relevance to this procurement process and management of the resultant contract.

The Council will run the procurement process to secure the Operator using the Competitive Flexible Procedure as defined within the Procurement Act 23. The Council has designed a process that includes for:

• Development of proposals through multi-stage tender submissions

• Ability to award at 1st stage or 2nd stage tender submission

• Ability to down select following evaluation of 1st stage tenders and invite a reduced number of tenderers to submit best & final 2nd stage tenders

• Pre Tender submission dialogue

• Post Tender submission negotiation

• Refinement of award criteria, specification, contractual / lease terms and commercial model during the process

• Site tours & bidders briefing

• Post award finalisation of contract terms, lease & commercial arrangements

• Due diligence including for take up of client references and visits to operator offices & operational sites, both pre and post award

• Interviews and presentations at either or both 1st and 2nd stage tender evaluation

Documents

Associated tender documents

Contracting authority

Portsmouth City Council

• Public Procurement Organisation Number: PCNL-5714-PRZV

Civic Offices, Guildhall Square

Portsmouth

PO1 2AL

United Kingdom

Email: procurement [at] portsmouthcc.gov.uk

Region: UKJ31 - Portsmouth

Organisation type: Public authority - sub-central government