Gosport Borough Council (the Council) awarded a Partnering Agreement for Environmental and Street Scene Services to Urbaser Limited (the Contractor) on 1 April 2011 (the Contract). The Contract was guaranteed by Urbaser S.A.U and provided for a maximum term of 15 years with an estimated value of £2.6M for the provision of waste and recycling collections as well as street and toilet cleaning activities. The Contract was awarded following the conclusion of a public procurement exercise ran under the Public Contracts Regulation 2006. In March 2024, the Contractor notified the Council that it sold its entire issued share capital of the Contractor by the original guarantor to FCC Environment (UK) Limited (02902416) and requested consent from the Council to novate the guarantee to FCC, which the Council gave. In November 2024, the Contractor changed its name to FCC Waste Management Limited (company number 03588422). The Council intends to vary the Contract (as described in this notice) which will take place no earlier than the expiry of 10 days from the publication of this notice.

The value inserted in V.2.4) represents the estimated value associated with the proposed 2 year extension .

Continued from II.1.4 The Council intends to enter into a deed of variation with FCC for the purpose of making the following changes to the Contract: • Extension to the duration of the Contract by a term of 2 years with an estimated value of £8.75M. This extension was not originally provided for in the Contract; • Incorporate the guarantor as a party to the deed of variation to recognise that these changes are already captured by the existing guarantee as part of the original Contract; • As a consequential change to the deed of variation, the existing lease between the Council and the Contractor for the Willmott Lane depot will expire. The Council will therefore put in place a new lease for a term of two years (to align with the extended term of the Contract) in substantially the same form as the original lease but with an updated plant to reflect the practical boundary/use of the site. Additional information: Continued from II.2.4. • FCC's garden waste income (minus expenditure) has been included for reporting purposes into the main contract sum before margin/profit calculated to reflect income received. Collection of garden waste income from residents remains an FCC risk; • FCC's payment to the Council to reflect "guaranteed garden waste income" has been removed as an expenditure prior to any profit being shared by the parties. Concept of profit share between the parties remains but figure changed as below. • Exceptional profit share amended with the Council taking a greater percentage of any overspend but receiving an equivalent higher percentage of any savings to reflect extension. • The Council's variable profit annual payment to FCC has been removed which has an estimated value of £25,000 per annum; • Adding weed spraying into the Specification as a service to be provided rather than one which the Council could request if required. This has an estimated value of £60,000 per annum within the main contract sum instead of being pad as part of Ad Hoc Works to reflect reality this is always required. • Reducing liability for both the Council and FCC in respect of Interior Maintenance and Repair of Public Toilet Buildings which represents a reduced spend of £45,000 per annum; The value in II.1.7 refers to the estimated value over the further, 2 year term of the Contract.

Public Contracts Regulations 2015 (Directive 2014/24/EU)

Award procedure without prior publication of a call for competition The Council is facing a number of challenges around new waste legislation (in particular Simpler Re-cycling and EPR), the need for a new depot site and long run-in times for refuse equipment. An extension to the term of the existing Contract is the most viable option to maintain continuity of a key public service. The Council is part of the Hampshire Project Integration but the other parties are yet to finalise their needs. The existing Contract with Urbaser Ltd (now FCC Waste Management Ltd) commenced on 1 April 2011 and was due to expire in March 2026. The Contract has been provisionally extended by informal agreement and the parties now intend to formalise the extension by 2 years from April 2026 (estimated value of £8.75M). This extension was not originally provided for in the Contract. As part of the extension, the Council proposes to make further modifications as more particularly described in Section II above. In the Council's reasonable opinion, the modifications are not material and reflect the practical operation of the Contract and, in places, reduce certain costs to the Council. The total actual spend under the original Contract over the 15 year term was £41M. The increase as against the original estimated value arose due to unexpected increases in waste volumes over the term, growth in households served, market inflation, and changes to operational requirements, which were not foreseen when the initial award was made. The estimated cost of the proposed two-year extension taken together with the other modifications described above is £8.75M. The proposed extension is intended to provide sufficient time to allow the Council to finalise its requirements for a long-term solution and to undertake a competitive tendering exercise for a long-term successor in accordance with the Procurement Act 2023. The Council considers that the proposed modifications are permitted in accordance with Regulation 72(1)(e) of the Public Contracts Regulations 2015 (PCR). Under Regulation 72(8)(a), the modifications will not render the Contract materially different in character as there is no material change to the services to be provided for the extension period. The modifications are an extension of term only and minor clarifications to the service/payment made to reflect actual operation. Under Regulation 72(8)(b), the Council does not consider that the modifications introduce conditions which would have (i) allowed for the admission of other candidates, (ii) allowed for the acceptance of a tender other than that originally accepted, or (iii) attracted additional participants in the procedure. The key effects of the modifications are to extend the term of the Contract by 2 years and in the context of a 15 year contract the Council does not consider there would have been any change to the outcome of the original procurement. Under Regulation 72(8)(c), the modifications will not materially change any of the core commercial terms of the Contract, and there will be no change to the economic balance of the contract. The modifications do not extend the scope of the Contract considerably within the meaning of Regulation 72(8)(d). No material change is proposed to the nature or quantity of the works and services to be provided. Regulation 72(8)(e) of the PCR is not engaged.