Agenda item

Waste & Related Services Contract Procurement

Summary:

 

 

 

 

 

Options considered:

This report is to update members on the procurement process undertaken to let a new contract for various services including the collection of household waste, trade waste, street cleansing services and grounds maintenance.

 

Not applicable to this report.

 

Conclusions:

 

There is a statutory duty to provide waste collections and to separately collect recycling.  The award of this contract for waste and recycling collection will ensure the statutory duty is met.

 

A full OJEU procurement process has been followed for this procurement and all legal obligations have been met.  External legal support was provided by Bevan Brittan for the procurement and preparation of the contract.

 

Recommendations:

 

 

 

 

 

 

 

 

Reasons for

Recommendations:

 

1.    That members agree the frequency that Overview & Scrutiny Committee receive updates on contract performance and management from Officers.

 

2.    That members request officers arrange wider briefing sessions for all Members during the mobilisation period and before contract start as appropriate.

 

To enable members to adequately monitor the performance of the contract against the specification and be aware of any matters around management or governance of the contract which arise from the regular partnership meetings.

 

To allow all Members opportunities to gain a better understanding of the contract arrangements, particularly around mobilisation of the contract and to get to know the new contractor so they are able to respond to resident questions that arise appropriately.

 

LIST OF BACKGROUND PAPERS AS REQUIRED BY LAW

(Papers relied on to write the report, which do not contain exempt information and which are not published elsewhere)

 

Cabinet Member(s) Cllr Nigel Lloyd

Ward(s) affected:

All

 

 

Contact Officer, telephone number and email:

Steve Hems, Head of Environmental Health   01263 516182

steve.hems@north-norfolk.gov.uk

 

Minutes:

Cllr N Lloyd – Portfolio Holder for the Environment introduced the report, and informed Members that the joint procurement of the waste contract was a process that had begun in 2017. He stated that it had been a Cabinet decision to take this approach, and that Members had been given several opportunities to shape the contract requirements throughout the process. It was explained that the procurement was at an extremely sensitive stage in the process, and as such it was necessary for the  discussion to be held in private, to avoid compromising the bidding process. Cllr N Lloyd thanked the HEH for his tireless efforts in facilitating the process.

 

Questions and Discussion

 

The HEH stated that the procurement process had been governed by an EU Directive ‘Public Contract Regulations 2017’, which allowed five different methods for contract procurement. There were two options available for complex procurement of the type required for the joint waste contract, one of which allowed for dialogue with bidders. It was suggested that the Council had a clear aim for the contract, but that there would be benefit in allowing bidders to come forward with ideas. As a result, the Competitive Procurement with Negotiation (CPN) method was chosen, which enabled negotiation without extension of the process.

 

The HEH stated that during the initial stages of the procurement process, several steps were taken to mitigate risks, such as ensuring that bidders could demonstrate their ability to meet contractual obligations. It was reported that only two bidders came forward at this stage, as several companies did not have the resources to bid for additional contracts at the time. It was noted however, that having only two bidders had significantly simplified the process. Members were informed that the process was now in the final tenders stage, and that the contract would be awarded at Cabinet on 6th December.

 

On vehicle pricing, Members were informed that due to uncertainties such as Brexit, prices could not be guaranteed for any longer than thirty days, hence a second evaluation stage was included that would transfer any risk of vehicle price increases onto the bidder.

 

The Chairman asked what would happen if there was a substantive and material challenge during the standstill period. The HEH replied that if this were to happen, the Council would take advice from the appointed external legal consultant. He added that three different consultants had been used for the project, and it was hoped that the risk of challenge had been reduced to a minimum.

 

Cllr G Mancini-Boyle asked whether the Council was protected from the market price fluctuation of recyclables. The HEH replied that the processing of recyclables was not a part of the contract, but was covered by Norfolk Environmental Waste Services, that NNDC was party to. He added that there was volatility in the market of recyclables, and that there was flexibility in the contract to protect the council from this. It was suggested that some recycling costs offset others, further reducing any financial burden on the Council.

 

It was confirmed, following a question from Cllr P Grove-Jones, that the Councils included in the contract were NNDC, Breckland DC and Kings-Lynn & West Norfolk BC. It was reported that Broadland DC had withdrawn from the joint procurement process in order to align itself more closely with South Norfolk DC.

 

 

 

 

 

The HLS reminded Members that the Cabinet meeting due to be held on 2nd December had been moved to 6th December, to align with the BDC and KLWNBC. She added that Members would also be asked to approve funding for the waste vehicles at the next Council meeting. It was stated that if the waste contract bids were outside of the predicted budget envelope, then the Overview & Scrutiny Chairman would be consulted to allow Cabinet to make the urgent decision to provide additional funding.

 

Cllr P Grove-Jones asked where the vehicles purchased by the Council would be kept, who would pay for their maintenance, and who would be liable for collection delays. The HEH replied that the Council would only pay for the purchase of the vehicles, and that all other costs such as maintenance and repair would be covered by the contractor. He added that each Council would have a Supervising Officer, and it would be their duty to ensure that the contractor was maintaining the vehicles to the required standard. It was suggested that the purchase arrangement would also provide financial benefits for the Council, as it would not be paying higher interests rates and profit on top of the vehicle costs. Cllr P Grover-Jones then asked whether the vehicles would be the same in each district, and what the cost of each vehicle would be. The HEH replied that the vehicles may differ slightly for each district due to varying access and landscape requirements. On vehicle costs, it was stated that the average freighter would cost between £150k-£200k, and that it was expected that the contractor would require between 13-15 different size vehicles to satisfy its obligations. Of the total fleet, ten would be for standard waste collection, two for garden waste, and others residual vehicles. The anticipated total sum for the vehicles was £4.5m, which officers did not expect to exceed. The Chairman said that he assumed the vehicles would be left on the premises of the contractor, and asked if this would be an issue. It was confirmed that the vehicles would be kept on the contractor’s premises, however if the contractor were to go into administration, then the Council would be able to prove ownership of the vehicles and have them released.

 

Cllr N Housden asked if the Council could insure against the contractor going into administration, to which the HEH replied that the parent company of the contractor was required to either guarantee or bond the contract. This meant that if the contractor were to fail, then the parent company would need to either deliver the contract itself, or pay a sum to the Council to deliver the service, which would effectively lead to re-procurement.

 

It was confirmed following a question from Cllr W Fredericks that the contract would initially last nine years for NNDC, with the other Council’s commencing from the start of the second year. Members were informed that the contract could be extended for a further eight years if required. In response to a follow-up question from Cllr W Fredericks, Members were informed that the vehicles were expected to last approximately nine years, and that after this point, the Council would have to procure replacements, hence the contract length was aligned to the vehicle lifespan. Members were informed that the current contract with Kier had been extended by one year for NNDC to align more closely with BDC and KLWNBC.

 

Cllr T Adams referred to the possibility of food waste collection, and asked whether this would have an impact on the climate as a result of an increased carbon footprint. He then asked if street cleansing and parks maintenance would be included in the contract, as an expected service requirement. The HEH replied that in terms of food waste, there was a desire to collect in some authorities as a result of the tonnage that could be saved from landfill, which would result in the ability to reclaim recycling credits. It was noted that these collection were often made weekly in separate bins, and would likely result in an additional cost of approximately £67k per annum. With regards to the carbon footprint of these collections, it was reported that work had been completed by the Waste & Resources Action Programme, which suggested that the collections would result in a carbon benefit. It was suggested that the rurality of the district could have an impact on this, and that it would require a political decision on whether or not to support these collections. The HEH stated that food waste collection could be mandated by Central Government from 2023 onwards, which could allow for new burdens funding to be provided. It was stated that having the costed option in the contract meant that the Council would not need to re-tender in the future. With regards to cleansing, Members were informed that the requirements were based on three prioritisation zones of town centres, beaches and other, with zero litter requirements for the first two. It was stated that there were contracted deductions if the standards were not achieved.

 

Cllr P Grove-Jones referred to public waste bins in recreational areas, and asked whether bigger bins were available. The HEH replied that boat waste had been known to cause issues, and that he would be happy to discuss specific issues after the meeting. In response to a question from Cllr G Mancini-Boyle, it was confirmed that bins on Barton-Turf Staithe were commercial waste, and would not be funded by the Council.

 

Cllr W Fredericks asked if the provision for litter picking in the contract would cover coastal paths, to which the HEH replied that it would not for areas of private land. He added that community litter picks could be supported in these areas.

 

Recommendations were discussed and the Chairman asked when would be an appropriate time to commence performance monitoring of the new contractor. The HEH replied that June would allow for a full month of data to have been collected.

 

It was proposed by Cllr G Mancini-Boyle and seconded by Cllr A Varley that monthly performance updates be given on the performance of the waste contract, beginning in June for three months, then quarterly thereafter.

 

A Members’ briefing was discussed and it was suggested that it would be helpful for the winning bidder to deliver a briefing session for Members during the mobilisation period. It was proposed by Cllr G Mancini-Boyle and seconded by Cllr L Shires that a contractor briefing be provided for Members during the mobilisation period, with the HEH to arrange the details.

 

RESOLVED

 

1.    That monthly performance updates be given on the performance of the waste contract, commencing in June for three months, then quarterly thereafter.

2.    That a contractor briefing be provided for Members during the mobilisation period, with the HEH to arrange the details.