Coal-based fuels

Tender description

Former British Coal Corporation employees and certain others are entitled to receive solid fuel as part of historic contractual liabilities arising from coal industry privatisation. It is known as The National Concessionary Fuel Scheme. Under the terms of the scheme, eligible beneficiaries can receive a solid fuel entitlement or cash-in-lieu. This contract only applies to services to the solid fuel beneficiaries and is to ensure adequate purchasing, delivery and administration of the fuels, on behalf of the Department for Business, Energy and Industrial Strategy, to qualifying individuals. The number of beneficiaries in receipt of solid fuel (December 2018) was c6600. When the contract begins, we estimate there will be c5400 with an overall declining profile year on year of about 7 %. Deliveries to solid fuel beneficiaries are required in England, Wales, Scotland, and Isle of Man (2 households) with the highest concentration in England followed by Wales and Scotland. The estimated costs for the initial three-year period of the contract are 22 200 000 GBP. If the optional extension period of 2 years is enacted then the total costs are estimated to be 32 400 000 GBP. Of the above costs, the vast majority will be the cost of the actual fuels themselves and the distribution which are subject to RPI inflators and vary over time. The administration fees for the contract are estimated to be 430 000 GBP for the 3-year period; 650 000 GBP for the 5-year period. The contract is demand led and cost estimates are based on the number estimated to be in the scheme during the contract period and the current average costs of fuel per individual. These estimates include VAT at the current rates (5 % for fuel and 20 % on administration).