Apologies were received from Cllr Pierce and Cllr Huntington-Thresher.  Councillor Fawthrop apologised as he would be leaving the meeting at 8pm.

There were no additional declarations of interest.

In accordance with the Council’s Constitution, questions to the Chairman of this Sub-Committee must be received in writing 4 working days before the date of the meeting.  Therefore please ensure questions are received by the Democratic Services Team by 5pm on Thursday 27^th October 2016.

No questions were received.

The minutes of the meeting held on 24^th August 2016 were agreed, and signed as a correct record.

In considering matters arising, the Chairman sought an update on whether the implementation of the database for the Contracts System remained on track for December 2016.  The Director of Commissioning reported that the implementation of the system was going well and was on track for December 2016.  It was agreed that a live demonstration of the system would be provided to Members at the meeting of the Contracts Sub-Committee in January 2017.  The Director of Commissioning confirmed that once the system was fully operational, in March or April 2017, Members would be in a position to fully interrogate the data on the system and drill down into individual contracts.  In response to a question, the Director of Commissioning confirmed that the system had been developed by the London Borough of Bromley and therefore had the potential to be marketed to other Local Authorities in the future.

The Chairman confirmed that he had written to the Chairman of the Audit Sub-Committee in regard to ensuring a more active dissemination of audit reports to PDS Chairmen.  The Contracts Sub-Committee stressed the importance of adequate scrutiny of audit findings in order to ensure that lessons were learnt and practices changed to guard against similar errors arising in the future.  The Sub-Committee noted that PDS Chairman were made aware of reports considered by the Audit Sub-Committee that affected their service areas although it was not always clear that these reports were then scrutinised by the relevant Committee and that all members of the Committee were aware that there were Audit Sub-Committee reports relating to the specific service committees.  It was agreed that the Chairman would write to the PDS Chairmen to stress the need for adequate scrutiny of Audit Sub-Committee reports in order to drive improvements in contractual procedures.

In relation to leaf fall clearance (Minute 16), it was agreed that the Sub-Committee should consider this issue, along with wider issues relating to street cleansing, in more detail.  In line with its remit, the Sub-Committee would only seek to review and consider contractual issues, leaving service specific issues to be considered by the Environment PDS Committee.  The Head of Neighbourhood Management should be invited to the meeting to provide the Sub-Committee with an overview of ongoing and emerging contractual issues.  In addition to this, the Director of Commissioning reported that a paper had been written setting out the difference between contract management and contract monitoring.  The paper was designed to support staff with understanding the distinction between the two different processes.  The Sub-Committee agreed that it would be helpful for the paper to be circulated to Members of the Sub-Committee as soon as possible to enable detailed consideration of the paper at the Sub-Committee’s next meeting as part of discussions surrounding the street cleansing contract.

In response to a question concerning processes and policies for mitigating against known and unknown risks, the Chairman highlighted that  ...  view the full minutes text for item 24.

The Director of Education and the Commissioner: Education introduced the item and explained that in the period from August to September 2016, three Education contracts had been put forward for authorisation from the Portfolio Holder for Education.  In each case, authorisation for an exemption to competitive tendering was sought to allow continuation of existing contract arrangements – but with insufficient time given to the Portfolio Holder, before the existing contract terms expired, to reasonably allow consideration of alternative courses of action. 

The Sub-Committee considered a report which provided background to the Education contracts in question, and information on management action taken to avoid further instances of late notified decisions on contract actions.

The Portfolio Holder for Education had expressed significant concern at being presented with multiple incidences of late notified requests for authorisation; and asked the Director of Education to ensure that management action was taken to ensure that all future requests for similar authorisations (contract extensions and exemptions) were sought with at least six months remaining on the existing contracts terms, in line with the latest version of the Bromley Contract Procedure Rules.

In June 2016, ECHS had been restructured so that commissioning support, previously separately based within the ECHS Commissioning Team, was transferred into the respective departments within ECHS. From August 2016 onwards, the Commissioner Education had been tasked with providing oversight and monitoring of the contract portfolio within Education.  It was noted that responsibility and accountability for each contract still sat with the relevant Head of Service or Budget Holder.  The Commissioner Education now maintained a regularly updated status report on every contract held within Education Services.  This was closely cross referenced with the ECHS Contract Register, with updates provided to the ECHS Procurement Team on a regular basis. The status report was Red/Amber/Green rated with Red contracts identified as at risk with immediate action necessary and Amber contracts identified as requiring action imminently (or action was underway and on track).  The timeline for contract action was clearly identified for each contract.  The status report was regularly circulated to all Education Managers and, more importantly, was a standing item at the fortnightly Education Management Team meeting where the status of each contract was reviewed.

This action had demonstrated immediate improvement in the timeliness of contract actions within the Education department.  All contracts due to end in March 2017, requiring Education Portfolio Holder authorisation for extension and/or exemption, had been successfully finalised six months in advance of the contract end date.  Likewise, authorisation for similar contract actions below the threshold for Portfolio Holder authorisation, had been completed six months prior to the contract end date.  For other contracts that were due to end in March 2017, a Request for Quotes or tender process was underway.  Heads of Service had been informed that no authorisation for extension or exemption, at any authorisation level, would be supported for any contract that required a tender process or Request for Quotes process to take place – it would be up to the  ...  view the full minutes text for item 25.

Due to commercially sensitive information contained within the report, this item will now be considered in Part 2 of the agenda.

(Councillor Fawthrop left the meeting during consideration of this item)

In reviewing the contents of the report, a Member noted that it had been significantly redacted, did not contain any commercially sensitive information and therefore did not justify consideration in Part 2 of the agenda.  It was consequently moved by Cllr Wilkins, seconded by the Chairman, and carried that the report be considered in public (Part 1).

In April 2013, the shared parking service between LB Bromley and LB Bexley for which it was agreed that LB Bromley would be the host borough formally came into being. The formal Collaboration Agreement between the two boroughs was approved in February 2013. The principal objectives of the shared service were to develop best service practice and to realise a saving in management costs and other overheads without detriment to the delivery of the front-line service.

A key element of the business case for establishing the shared parking service was the opportunity to realise further savings and efficiencies by bringing the boroughs together in a single shared parking contract when their existing contracts expired. Harmonisation of the boroughs’ approaches to parking enforcement was already underway when the joint procurement of a single shared service contract commenced.

Bromley’s current contract with Vinci Park Services (now known as Indigo) commenced in October 2006 and was due to end in September 2016. The contract included provision of the following services:

·  Patrolling and enforcing on-street parking restrictions through the issue of PCNs.

·  Patrolling and enforcing all council-owned car parks through the issue of PCNs.

·  Car park management and maintenance.

·  Equipment maintenance and management.

·  Collecting cash from pay and display machines, and pay stations in multi-storey car parks.

·  School crossing patrols, funded by TfL and individual schools.

Bexley’s current contract with NSL commenced in April 2010 and was due to end in April 2017, following agreement to align the contract end date with LB Bromley. The contract included the following services:

·  Patrolling and enforcing on-street parking restrictions through the issue of PCNs.

·  Patrolling and enforcing car parks through the issue of PCNs.

·  CCTV mobile units.

In March 2015, Bromley Council’s Executive agreed the scope of the procurement and indicative timetables. Officers worked on and developed a Contract and Specifications with associated KPIs which was fit for purpose and meet the requirements of Parking Services and the Council over the next 10 years.  A contract extension report was approved by the Portfolio Holder in July 2016 to ensure continuity of service through to 2 April 2017.  The tender specification and process was drafted in such a way as to obtain quotes from companies for the provision of service to either one authority or both authorities for a period of 5 years with a possible extension of 5 years or a period of a straight 10 years.  The shared service led on this joint procurement exercise. A management board was created comprising of officers at senior officer and operational level who worked closely together over a two year period to  ...  view the full minutes text for item 26.

The Corporate Contracts Register will be circulated under separate cover.

The Sub-Committee considered the Contracts Register in detail.  The Committee reviewed the contracts flagged on the register as ‘red’ and ‘amber’.  A number of issues with contracts displaying as ‘red’ on the published register had now been resolved and would revert to ‘white’. 

In relation to CEX1 (Information Management/SharePoint Review), the Director of Commissioning reported that the 10 month delay in the contractual process would not worsen and the new targets that had been set would be met.

In relation to ECHS 54 (Support Services to Children at Risk of Sexual Exploitation), the Director of Commissioning reported that she had been working closely with the Interim Director of Children’s Services on this contract in response to the issues that had emerged from the recent Ofsted Inspection.  It was clear that the current contract would not deliver the services that were necessary in order to protect young people at risk of sexual exploitation in the Borough now and into the future.  A further 1 year extension to the current contract was being sought in order to provide sufficient time for a detailed specification for a new contract to be developed.  The Director of Commissioning was clear that this had to be the last contract extension as it was imperative that a contract was in place to protect young people at risk of sexual exploitation.  The Sub-Committee requested that further details of the ongoing work surrounding this contract be provided at the next meeting.  It was suggested that it may be helpful for the Interim Director of Children’s Services to attend the next meeting to explain to the Sub-Committee the work that was being undertaken in relation to this Contract following the Ofsted inspection.

The Director of Commissioning reported that the Commissioning Board process appears to be working well with a number of issues being resolved and strategies being put in place.  The Chairman noted the progress that had been made and stressed the need for action to now be taken on the contracts that were recorded as ‘amber’.  The Director of Commissioning explained that in certain circumstances contracts were flagged as amber to enable ongoing monitoring of the contractual processes.

RESOLVED: That

(1) The Contracts Sub-Committee be provided with an update in relation to ECHS 54 (Support Services to Children at Risk of Sexual Exploitation) at its next meeting in December 2016; and

(2) the updated contracts register be noted.

The Head of Procurement had provided a copy of the report considered by the Commissioning Board in relation to amendments to the Contract Procedure Rules and Associated Guidance and Practice notes to enable improved management and members scrutiny of Contract Waivers and Exemptions to reflect the Council’s revised Commissioning Arrangements.  The proposed amendments had come about as a result of concerns expressed by members and officers surrounding the application of the Council’s Contract Procedure Rules with insufficient time being allow for the consideration of alternative action.  There was also a need to update the Contract Procedure Rules to reflect the new structures being put in place around the Council’s management arrangements and the creation of the Director of Commissioning posts, with responsibility for the overview of procurement and commissioning arrangements around service provision.

The Director of Commissioning provided an overview of the proposed changes explaining that they ensured that she was involved in any decisions surrounding contractual issues.  The Chairman suggested that it would be prudent to refer somewhere in the “Steps Prior to Purchase” section to value for money.

In relation to “Exemptions to the Need for Competitive Tender”, the Sub-Committee recommended  that it be made clear within the Contract Procedure Rules that where authorisation was sought from a Portfolio Holder any report would also be considered by the relevant service PDS Committee.

The Sub-Committee noted that any amendments to the Contract Procedure Rules would need to be approved by either the Executive or the Council.

The Director of Commissioning reported that the new Commissioning Directorate appeared to be operating well.  Processes were now becoming imbedded and whilst there was still work to be done, governance was much tighter and the Council was in a much better position that it was 6 or 7 months ago.  The Chairman suggested and it was agreed that it would be prudent for the Sub-Committee to undertake a review of the first year of operation of the Directorate in June 2017.

The Director of Commissioning reported that the Head of Audit had undertaken a piece of work around what auditors looked at when undertaking audits.  The resulting paper would provide an excellent basis for training in contract procedures across the Council.  It was suggested that the papers also be circulated to Members of the Sub-Committee for information.

RESOLVED: That the proposed amendments to the Contract Procedure Rules be noted.

The Sub-Committee considered a paper from the Head of Procurement which provided advice on the potential timescale which may be required when completing commissioning and procurement activity.  It included an allowance for any necessary reporting/authorisation requirements set out in the Council’s Financial, Commissioning and Procurement Procedures.  The timescales took account of the need to consult and/or get the agreement of various corporate officers, and the proposed service delivery arrangements.

The Chairman recommended that it would be helpful to cascade the guidance notes through the organisation as the guidance provided staff with a clear indication of the complexity of the contractual process and how long it would take to complete.  It was essential that sufficient time was allowed for developing a specification that was fit-for-purpose, the tendering process and the evaluation process.  It was clear that in the past managers had significantly underestimated how long these processes would take.  The Director of Commissioning stressed the need for a strong specification and strong KPIs as without these elements the contract was unlikely to deliver what was required.  The guidance that had been developed was there to support the delivery of successful contracts.  Members of the Sub-Committee expressed the view that if staff failed to take the advice of the Commissioning Directorate this failure would need to be managed through the annual performance appraisal process.  A Member stressed the need to ensure that staff clearly understood that contract procedure rules would be enforced through a robust annual appraisal process.  Not adhering to contract procedure rules should be considered to be poor performance.

A Member also stressed the importance of the legal team being involved in the process at the earliest opportunity.  The Member stressed the importance of officers from the Legal Service being involved in the development of tendering documents as these often formed the basis of a legal agreement and could place the Council at risk if they were not developed in line with contract law.

The Director of Commissioning highlighted that the Council currently outsourced services at a cost in excess of £190 million.  A standard specification for outsources services already existed and only needed to be altered to reflect innovations within services.  The only time a specification would be difficult to write was when a service was being outsourced for the first time.  In this circumstance in was essential that sufficient consideration was given to the needs of the service and what needed to be delivered by the contract and this process was complex and took time.

RESOLVED: That the Guidance Notes on Contract Timetabling be noted.

Report CSD16141

The Contracts Sub-Committee was established by the Executive and Resources PDS Committee in May 2016, with the following terms of reference:

“To undertake the policy development and scrutiny role in respect of the Council’s commissioning and contracts functions (whilst respecting the responsibilities of service PDS Committees) and report to Executive and Resources PDS Committee as appropriate.”

Further consideration had been given to these terms of reference with a view to clarifying the Sub-Committee’s role.  The Chairman stressed that the role of the Sub-Committee was to review contracts that could teach the Council and its Members something, such as lessons learnt.  The Chairman stated that he was not convinced that service PDS Committees were reviewing the contracts register for their services on a regular basis.  He stressed the need to ensure that the Contracts Sub-Committee did not become a repository for all contract issues as a result of the service PDS Committee not adequately fulfilling their responsibilities in terms of scrutiny of the contracts register.  This view was endorsed by the Sub-Committee Members who agreed that the contracts register should be regularly reviewed by the PDS Committees.

Following detailed consideration, it was agreed that the Sub-Committee should recommended the adoption of the proposed terms of reference for the Contracts Sub-Committee to the Executive and Resources PDS Committee:

“To undertake the policy development and scrutiny role in respect of the Council’s commissioning and contracts functions (whilst respecting the responsibilities of service PDS Committees) and report to Executive and Resources PDS Committee as appropriate.

This will include –

• promoting best practice across the Council on commissioning, contracts and contract monitoring issues;

• reviewing the corporate contracts register and in particular the “commissioning journey” for contracts with a value of £500,000 and above, or any contracts where there is a defined risk,  making recommendations as appropriate;

• considering contracts issues raised by the Executive, Policy Development and Scrutiny Committees and the Audit Sub-Committee;

• making recommendations to Audit Sub-Committee on the Contract Procedure Rules;

• making any other contractual related recommendations to the Chief Executive and the Executive as appropriate.” 

RESOLVED: That the Executive and Resources PDS Committee be recommended to approve the amended terms of reference for the Contracts Sub-Committee.

Report CSD16140

The Sub-Committee considered its work programme for 2016/17.  Members agreed the following additions to the work programme:

December 2016 Meeting

·  The Contracts Register would be circulated to Members of the Sub-Committee for information but would not be considered at the meeting.

·  The following items would be added to the agenda:

Update from the Audit Sub-Committee on 29 November 2016

Review of the V22 Contract (to understand more closely how the contract can be monitored and managed)

Update on Support Services to Children at Risk of Sexual Exploitation

Stray Dogs Contract Update (to understand the contractual processes and how this contract failed)

CCTV Contract Update

January 2017 Meeting

In addition to the items reflected on the work programme, the Sub-Committee would also receive a live demonstration of the Contract Management System from the Director of commissioning.

A Member noted with disappointment that only 4 Members had attended the last contract briefing session.  The Chairman stressed the need for all Members to attend the training and it was suggested that Political Group Leaders should actively encourage Members to attend this essential training.  The Chairman highlighted that it was the responsibility of the service PDS Committees to effectively monitor the delivery of contracts and questioned how any Member who had not attended the training could adequately fulfil their duties in relation to contract monitoring and scrutiny.

RESOLVED: that

1. The work Programme be approved, subject to the amendments outlined above.

2.  The future meeting dates, 8^th December 2016, 31^st January 2017, and 11th April 2017, be confirmed.

In reviewing the minutes, a Member noted that no commercially sensitive information was contained within the Part 2 minutes.  The Senior Lawyer present suggested that there was a possibility that contractors could be identified from the minutes however, a Member highlighted that there was nothing within the minutes that was not already in the public domain.  Referring to the requirement for transparency whenever possible the Member considered the minutes should be made public. It was therefore moved by Councillor Wilkins and seconded by the Chairman that the minutes be moved into Part 1 of the agenda.  Following a vote, with 3 Members in favour of the motion and 1 against, the motion was carried and consideration of the minutes moved into Part 1.  (Councillor Mellor requested that his dissenting vote be recorded).

The previously exempt minutes of the meeting held on 24^th August 2016 were agreed, and signed as a correct record.