Agenda item

Report FSD16025

In October 2015 the Resources Portfolio Holder had agreed that tenders be sought for all Council insurance policies with the exception of casualty/liability insurance (i.e. property, motor, fidelity guarantee personal accident, school journey, minibuses, shops blanket and engineering inspections) through the Crown Commercial Services (CCS) Framework. An external broker, JLT Specialty Ltd, had been engaged to assist in the management of the tender exercise. However, on 25^th February 2016, with no warning, the CCS Framework had been withdrawn and the tender process had been discontinued. Officers recommended extending the existing contracts for three months and re-running the tender process using the new CCS Framework. 

The Chairman suggested that a better deal could be achieved by extending the current contract for a further year so that the contract could be aligned with the Council’s casualty/liability insurance in June 2017. Officers confirmed that Clause 75 (5) of the Public Contracts Regulations 2015 permitted modifications to contracts during their term provided that the value of the modification was below 10% of the total contract value. This would allow the three month extension proposed, but the legal position was clear that a longer extension of around a year would not be permitted for this contract. None of the other grounds for varying or extending the contract in Regulation 72 were relevant and in the absence of any sort of supporting argument it would be foolhardy to extend for longer. There was a real risk of challenge given conditions in the insurance market. However, the Committee was advised that a contract awarded under the new CCS Framework could be for a duration that would align with the casualty/liability insurance.

A Member commented that School Journey cover should be unnecessary as more schools became academies and that JLT as experts in their field should have been aware that the CCS Framework would be withdrawn. He proposed that rather than continue to use them the Council should ask the Royal Borough of Greenwich to run the tender process. Officers confirmed that JLT would be working on the new tender process without any additional payment, and that their fee of £2,500 would be payable even if the Council dispensed with their services. The Council would also risk losing the benefit of their experience from the first tender process, which was nearing completion when the Framework had been withdrawn. Officers accepted that Greenwich were better resourced for Insurance than Bromley, and had consulted with their Insurance Manager, but at no point in the tender process had Greenwich indicated that they would be prepared to manage the process for Bromley. A Member questioned whether Bromley had lost too many staff in key areas. 

Officers confirmed that the premium charged by the CCS Framework had been increased from 0.05 under the old framework to 0.075 under the new one.

RESOLVED that the recommendations to the Resources Portfolio Holder to agree that -

(i) the insurance tender process for property, motor, fidelity guarantee, personal accident, school journey, minibuses, shops blanket and engineering inspections be re-run; and

(ii) the existing insurance contracts currently due to expire on 30^th April 2016 be extended for three months to 31^st July 2016;

be supported subject to the addition of an additional recommendation that  the Portfolio Holder should investigate the possibility of extending existing contracts for 12 months and requesting the Royal Borough of Greenwich to run the process instead of the external broker, JLT.