Agenda item

JOINT REPORT OF THE HEAD OF LEISURE & ENVIRONMENTAL SERVICES AND HEAD OF FINANCE, PEFORMANCE & ASSET MANAGEMENT

 

To consider a report being submitted to Cabinet regarding the appointment of a contractor for the Shared Service Waste and Street Cleansing Contract.

RESOLVED: That the recommendations contained in the report entitled Shared Service for Waste and Street Cleansing – Appointment of Contractors be supported.

 

REASON FOR DECISION: To enable the Overview and Scrutiny Committee to consider the report entitled Shared Service for Waste and Street Cleansing – Appointment of Contractors prior to consideration by Cabinet.

The Part 2 report on this subject (Minute 56 refers) was considered prior to any decisions being made.

 

The Head of Leisure and Environmental Services presented the report entitled Shared Service for Waste and Street Cleansing – Appointment of Contractors.

 

He advised that the report dealt with the award of the core contract, specifically Lot 1 and drew attention to the following:

 

Paragraph 3.2

The successful bidder was unlikely to meaningfully mobilise the contract for Lot1 until there was certainty on the outcome for Lot 2, primarily because the collection arrangement for recyclable materials must correspond with the successful Lot 2 bid.

 

Lot 2 dealt with the management of recyclable materials.

 

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Procurement documents were jointly produced and bidders were invited to tender on 30 May 2017. Closing date for receipt of all bids was Wednesday 9 Aug 2017, followed by an evaluation process.

 

Paragraph 7.4

There was an Intermediate Inter Authority Agreement (IIAA) in place between NHDC and EHDC. A more detailed Inter Authority Agreement (IAA), which would set out, in a legally binding contract, the formal arrangements regarding management, finance and resources, was currently under development and would be in place prior to the contract commencing.

 

Paragraph 7.5

Contained details regarding the depot where both the contractor and the client team would be based.

 

Paragraph 7.6

Contracts were for seven years commencing May 2018, with an option to extend for a further seven years.

 

Paragraph 7.8

Set out that the main driver for the contract was to make financial savings whilst not adversely affecting the performance of the waste contract.

 

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The table demonstrated that the bids had been scored both on quality and price.

 

Members asked why Lot 2 had not been determined at the same time and what would happen if there were no bids for Lot 2 received within the deadlines.

 

The Contracts Lawyer advised that because of the apparent complexity of Lot 2 there had been insufficient time for bidders to tender and it seemed reasonable to extend the time given.

 

If no bids were received for Lot 2 then discussions would take place with the Lot 1 contractor.

 

Members asked for an explanation of the scoring system and how quality was assessed for any contractor that did not already provide a service to us.

 

The Service Manager- Waste and Recycling explained that the quality statements asked for in depth details regarding how the contractor would perform the services and to ensure that they had experience, references were taken for each and ach bid consisted of approximately 7 lever arch files of data and information.

 

The Head of Leisure and Environmental Services advised that there was a team of evaluators from EHDC and NHDC considering the bids and a consultant had been appointed to moderate the scoring system.

 

The 40/60 split between quality and price was a decision made by the project board. This split ratio was a fairly common practice. It should be noted that bidders that did not meet the minimum quality threshold did not move forward in the process and that the key drive for the process was financial savings.

 

Members were concerned that the preferred bidder received the lowest score in terms of quality.

 

The Head of Leisure and Environmental Services advised that the scores on quality were fairly close for each of the bidders.

 

All of the bids were assessed on the core contract and the options were then discussed with the preferred bidder.

 

The Service Manager – Waste and Recycling reminded Members that they had been sent an information note which documented the process undertaken when assessing the bids. A minimum score had to be achieved by each bidder and she was satisfied that the quality of each of these bidders was good.

 

Members expressed concern that a bidder may offer best price for the evaluation criteria and then make money on the options.

 

The Contracts Lawyer informed Members that this would be a risky strategy as the Council did not have to take up the options.

 

The Head of Leisure and Environmental Services confirmed that the method statements ensured that bidders could deliver on the core contract, including recycling.

 

The Service Manager-Waste and Recycling advised that benchmarking for street cleansing would be reintroduced with this contract and that this would be a useful tool.

 

Members asked whether enquiries had been made of other authorities in respect of the performance of their waste contracts and queried how benchmarking would be undertaken.

 

The Head of Leisure and Environmental Service advised that a consultant had been used to give advice. Waste services had, over the years become more similar across different authorities and a lot of background research work had been undertaken.

 

The Service Manager – Waste and Recycling informed Members that benchmarking was undertaken against nearest neighbours, who were authorities that provided services similar to those at NHDC and was most like each other geographically. The bid process involved taking references regarding bidders from across the Country.

 

In respect of recycling rates, 10 years ago the NHDC recycling rate was 20 percent, this had been improved to a current rate of more than 60 percent. NHDC exceeded government targets regarding recycling.

 

The current waste contract was signed in 2002 and this contract would definitely bring about improvements. The level of information that will be provided throughout the term of the contract would help support customer contact with real time information. It would also provide more specific information that would enable NHDC to undertake targeted campaigns.

 

Members asked how the existing staff base would be affected by the new contract and new client team and queried where they would be based.

 

The Head of Leisure and Environmental Services advised that it would be difficult to have two client teams for one contract. The staff consultation process had started and a new client team would be implemented at least three months before the commencement of the contract and this team would be based at Butingford which is the main base for the contractor. NHDC would be the administrative authority responsible for employing staff and managing the team.

 

In response to questions, the Contracts Lawyer advised that the Inter Authority Agreement between EHDC and NHDC was currently being developed that would include section regarding financial implications and indemnities.

 

There had been a lot of discussion about the content of the agreement and project board would be presented with several iterations as the agreement is developed. The final document was some way in the future and therefore the detail was not yet available, but it would include details about staffing, recharging, the contract base and financial implications including exit terms. The document would be tested in detail.

 

RESOLVED: That the recommendations contained in the report entitled Shared Service for Waste and Street Cleansing – Appointment of Contractors be supported.

 

REASON FOR DECISION: To enable the Overview and Scrutiny Committee to consider the report entitled Shared Service for Waste and Street Cleansing – Appointment of Contractors prior to consideration by Cabinet.