Agenda item
ENVIRONMENTAL SERVICES PROCUREMENT STRATEGY
- Meeting of Environment and Community Services Policy Development and Scrutiny Committee, Tuesday 24 January 2017 7.00 pm (Item 51a)
- View the background to item 51a
Minutes:
Report ES17002
Executive approval was sought to commence a tendering process in April 2017 for a range of environmental services with contracts starting on
1st April 2019. A number of key environmental service contracts had been aligned to expire in March 2019 and the proposed procurement strategy reflected outcomes from a series of service reviews, soft market testing, and the Environmental Services Contract Programme Board (including input from the Committee’s Working Group).
Lots 1-4 (Environmental Services) would be procured through Competitive Procedure with Negotiation. Used for complex contracts, the approach would drive innovation and add value through negotiation. Lots 5-7 (Arboriculture Maintenance and Highways Management) would be procured through a more traditional Restricted Procedure with a 15-month period between January 2018 and March 2019 considered sufficient for procurement.
Services could be provided by several individual contractors, a joint venture, consortium, or a single main contractor (who might sub-contract). For Lots 1-4 (and services placed in conjunction with them as part of the negotiated process), it was proposed to tender the contracts for an initial eight year period (01.04.19 to 31.03.27) with an eight year extension option (01.04.27 to 31.03.35) following a best value review in 2024/25. Lots 5 to 7 would be tendered for eight years only, unless tendered in combination with Lots 1 to 4.
The contracts would be tendered on the existing methodology and an outcome-based service, as this could give greater opportunity for services to be arranged more flexibly and innovatively whilst delivering value for money for the residents of the borough. Client management would focus on monitoring Key Performance Indicators to measure outcomes and take corrective action as appropriate.
Measures to mitigate risks were outlined in Report ES17002as were a number of principles to achieve best value and sustainable contracts economically, socially and environmentally, the principles including:
· innovative approaches to service provision;
· a shared approach to risk and reward;
· use of proven ‘smart’ technologies for service delivery and monitoring;
· improved environmental performance and local environmental quality;
· low carbon solutions and contributing to increased environmental resilience;
· improved service performance and reduced levels of complaint; and
· contributing to the circular / sustainable economy.
Action was also being taken to assess the condition of the Council depots, their future use, and any investment requirements. Service requirements would feed into a Depots Options Appraisal process by Cushman and Wakefield designed to clarify depot space requirement. A survey was also necessary to agree the state of the Depots prior to contract commencement - the depots needing to be returned to the Council in a similar, or better, condition on contract expiry. The work would inform any improvement plans required to ensure the depots are fit-for-future-purpose. Should depot improvements be required, the cost would either be met directly by the Council or amortised over the contract term through contract payments.
It was necessary for target dates in the procurement strategy to be met. Although small and/or local service providers might find it difficult to tender given the scale and nature of services, the use of sub-contractors, including local or small sub-contractors, would be encouraged.
It was confirmed that larger amounts of fly-tipped material are currently collected by Veolia Environmental Services Ltd (Waste Collection Contractor) with smaller amounts collected by Kier Services Ltd (Street Cleansing Contractor). The services would be covered by Lots 2 and 3 respectively. Enforcement was currently managed in-house but would be included in the scope of a contract. Care was suggested to avoid differing responsibilities for fly-tipping falling between different sections and an uncoordinated approach could potentially lead to more complaints. Legal advice would be sought on which statutory functions can be put to the market.
On street cleaning, the Service continues to look at ways to increase the effectiveness of cleaning, even if this meant cleaning less frequently. This could, for example, be achieved through using local knowledge to avoid the periods of peak parking stress.
Within all lots there would be incentives to reduce costs and undertake new ways of working. Areas were being considered for savings such as further measures to divert waste from landfill. Other incentives under consideration related to a sharing of income between Council and contractor to help incentivise a contract price reduction e.g. in relation to income from the use of parks for agreed activities/events. A great3er than 50/50 share for the Council was suggested should innovations derive from Members and Officers with a 50/50 share should a contractor innovate. Similar changes had already been instructed for the waste contract and officers would continue to work for such options in the strategy.
In regard to the winter service listed within Lot 7, lots 5 to 7 would comprise more conventional type contracts and officers were confident of being ab le to manage the co-ordination of resources to current levels. This included the scenario of a contactor working for a number of local boroughs and a simultaneous winter service demand from boroughs following heavy snowfall. For such circumstances it was important a contractor retained staff for specific boroughs. Consideration was also being given to winter service support from a waste collection contractor as a number of employees would be heavy goods vehicle (hgv) drivers.
A contract for arboriculture services would highlight the borough’s tree stock and include details of maintenance requirements; as there was need to address issues, such as storm damage and vary work levels, officers would look to ensure that flexibility can be provided in a contract to permit increased activity when necessary.
It was confirmed that contractors would be expected to be innovative (e.g. provide scanners underneath vehicles) and provide best value for money.
Members agreed to support recommendations in Report ES17002 and in so doing also recommended that the Committee’s Working Group provides a reference for contract related questions to be considered and continues to ensure that the strategy’s timeline schedule is maintained. The Working Group could also consider what the Customer Services offer should be and include consideration on further channel shift matters that would benefit residents and measures to provide service efficiency. The Group could review the current mix of customer services and how they would look for the future.
RESOLVED that the Executive be recommended to:
(1) agree to the proposed lotting structure and procurement routes –
· Environmental Services: Competitive Procedure with Negotiation (Lots 1-4)
· Arboricultural Maintenance: Restricted Procedure (Lot 5)
· Highways Management: Restricted Procedure (Lots 6-7)
(2) agree that –
· All Lots shall be tendered for an initial eight year term (1 April 2019 – 31 March 2027)
· Lots 1-4 may be extended for a further eight year term (1 April 2027 – 31 March 2035) subject to a best value review (in 2024/25) and being let at the Council’s sole discretion
· Lots 5-7 may be extended on a similar basis to Lots 1-4, if placed in association with Lots 1-4.
Supporting documents: