Contract Award for Provision of Occupational Health Services and Employee Assistance Programme
North Lanarkshire Council · 14 September 2022
Back to Finance and Resources Committee — 14 September 2022 and its agenda
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North Lanarkshire Council Report Finance and Resources Committee Does this report require to be approved? ☐ Yes ☒ No Ref NLC-CPT-21-077 FW/LC Date 14/09/22 Contract Award for Provision of Occupational Health Services & Employee Assistance Programme From Fiona Whittaker E-mail whittakerf@northlan.gov.uk Telephone 07973 728628 Executive Summary This report is to advise Committee of the decision taken in accordance with condition 21.3.2 of the Council’s General Contract Standing Orders (GCSO’s) where in the absence of Committee, the provision of the Council’s Occupational Health Services & Employee Assistance Programme (the ‘Contract’) was approved on 09 May 2022 by the Deputy Chief Executive to be awarded to Health Management Limited. Following successful conclusion of the required standstill period, the Contract was formally awarded on 25 May 2022. The Contract is for an initial period of 36 months and commenced on 1 June 2022 and will initially expire on 31 May 2025. The Council reserves the right to extend the Contract for 2 additional 12-month periods until 31 May 2027. The value of the Contract shall not exceed Two Million, Seven Hundred and Seventy Five Thousand Pounds Sterling (£2,775,000) exclusive of VAT. Recommendations It is recommended that Committee acknowledge the award of the Contract in accordance with GCSO 21.3.2 to Health Management Limited at the maximum value of Two Million, Seven Hundred and Seventy Five Thousand Pounds Sterling (£2,775,000) exclusive of VAT. This recommendation follows the completion of an approved procurement procedure, where the Tender recommended for award has been evaluated as providing the most economically advantageous Tender in terms of cost and quality for the Council. The Plan for North Lanarkshire Priority Improve North Lanarkshire's resource base Ambition statement (23) Build a workforce for the future capable of delivering on our priorities and shared ambition
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1. Background 1.1 The Council has had both an Occupational Health Service (including a physiotherapy service) and Employee Counselling provision for well over 10 years and both services play a crucial part in supporting the Councils ambition of building a workforce for the future, specifically improving the mental health & wellbeing of our employees, and the associated ongoing reduction in sickness absence levels. 1.2 The Occupational Health Service is also essential in ensuring the Council can adhere to the requirements of Health & Safety legislation regarding Statutory Health Surveillance, as well as providing the mechanism for employees to be assessed and granted ill health retirement in accordance with the relevant pension legislation. 1.3 The requirements within the Contract were previously provided by two suppliers Health Management Limited for the Occupational Health Services (including physiotherapy) and Therapeutic Counselling Services for Employee Counselling. Both of which were due to expire on 31 May 2022. 1.4 In developing this Contract, it was determined that combining the requirements for Occupational Health Services and Employee Assistance Programme into one Contract, and therefore one overarching Supplier would not only provide best value for the Council but allow for a more cohesive and collaborative approach to improving the mental health and wellbeing of our employees. 1.5 The Contract will not only continue to provide a comprehensive range of occupational health services to the Council, it will also allow us to work collaboratively with the Supplier to develop innovative solutions to improve the overall health & wellbeing of our employees and assist managers in maximising attendance, with a particular focus on our top two reasons for absence (Mental Health and Musculoskeletal). 1.6 The Contract will also assist the Council in delivering on the key priorities of our Mental Health & Wellbeing Strategy and provide tailored tools and resources that will support the strategy as well as other related areas of activity such as Stress at Work, Mental Health Awareness, and Suicide Prevention. 2. Report 2.1 A user intelligence group (the ‘UIG’) of technical and procurement representatives was formed to review technical specifications, discuss trading processes, market conditions and trends, ways to maximise community benefits and sustainability and to agree the procurement strategy that would deliver maximum benefit for the Council via the Contract. 2.2 The initial estimated value of the Contract dictated that the procurement procedure be undertaken in accordance with the Public Contracts (Scotland) Regulations 2015. 2.3 The procurement procedure was undertaken as a “Mini Competition” from the Crown Commercial Services (CCS) framework agreement for “Occupational Health, Employee Assistance Programmes and Eye Care Services” (RM6182), Lot 1 - Occupational Health and Employee Assistance Programmes, Fully Managed.
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2.4 To ensure capability and capacity, the 6 Suppliers on Lot 1 were issued with an “Expression of Interest”. Only 3 Suppliers expressed an interest in being invited to tender. 2.5 The Contract award was made based on the tenderer who submitted the most economically advantageous tender and the tender submitted by Health Management Limited has been evaluated as representing the most economically advantageous for this Contract. 2.7 Appendix 1 confirms the scoring achieved by each tenderer, further details of the procurement procedure is provided in Appendix 2 and the SME status and location of all tenderers is located within Appendix 3. 2.8 The value of the Contract shall not exceed Seven Hundred and Seventy Five Thousand Pounds Sterling (£2,775,000) exclusive of VAT including any option to extend the Contract. 2.9 As has been the case with previous contracts, the costs associated with contract delivery are initially incurred by Employee Relations, and then re-charged to the services as there is no centralised budget provision for this contract. Price Savings / Increases 2.10 The current Contract value for Occupational Health Services is £500,000 per year and £50,000 for Employee Counselling Services. The overall value of this Contract has been increased by £5,000 per year to reflect inflation costs, the additional requirements sought in the contract specification, and to take account of the increased usage levels, and therefore spend, on employee counselling over the last 3 years (the spend on Employee Counselling over 3 years from October 2019 to March 2022 was an average of £51,438 per year). Price Stability 2.11 Prices shall be fixed and unchangeable for the duration of the Contract, this includes any extension years however this Call Off Contract allows for an initial price review in line with the CCS Framework Agreement which is 2 years from the commencement of this Call Off Contract. Any review will conform to the same standards and principles as set within CCS Framework. Community Benefits/Social Value 2.12 The Council is committed to maximising the delivery of community benefits and the CCS Framework is also committed to maximising social value. The procurement included a social value requirement, this approach is designed to deliver local community benefits where possible.
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2.13 Within their tender, Health Management Limited advised that they have committed and/or will commit to the following areas to deliver social value within the Contract where possible: • COVID 19 recovery - Employment, retraining, and other opportunities e.g. Apprenticeships/supporting the physical and mental health of those affected by COVID 19; • Delivering a diverse Supply Chain - commit to using SMEs and underrepresented businesses/ensuring prompt payments through their supply chain; • Safe & Secure Supply Chains: Addressing Modern Slavery and exploitation in their supply chain; • Environmental Sustainability: Promoting sustainable production and consumption and an improvement in environmental quality in support of the Government’s 25 Year Environment Plan; • Fair, inclusive and ethical employment practices & skills development - promote inclusivity through quarterly or annual reviews; • Ethical behaviour standards - including subcontractors; • Wellbeing & Community Benefits - financial support to local causes/staff volunteering days; and • Measurement and reporting - annual service review report. 2.14 The community benefits delivered as part of the Contract potentially include the creation of jobs or apprenticeships. Fair Work First 2.15 Within their tender submission, Health Management Limited advised that they have committed and/or will commit to the following areas of the Scottish Governments “Fair Work First” initiative: • Appropriate channels for effective voice; • Investment in workforce development; • No inappropriate use of zero hours Contracts; • Action to tackle the gender pay gap and create a more diverse and inclusive workforce • Confirming within their tender submission that they are an Accredited Living Wage Employer and provide rates of pay to their staff above the area’s minimum living wage requirement. They also ensure all subcontractors comply with the Real Living Wage; and • Oppose the use of fire and rehire practices. Contract Strategy 2.16 Officers from People and Organisational Development will be responsible for managing the Contract which will be undertaken in accordance with the Councils agreed approach to Contract and Supplier Management.
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3. Measures of success The Contract will deliver the following outcomes: 3.1 The appointment of a Supplier who has the experience and capability to deliver a high quality occupational health and employee assistance service that will deliver the minimum delivery targets within the Contract which will help the Council build a workforce for the future, improving the mental health & wellbeing of the employees and maximise attendance. 3.2 The Contract award procedure is compliant with the procurement legislation and internal procedures and secures a range of community benefits/social value as well as a number of “Fair Work First” initiatives. 3.5 That the Contract performance is proactively managed against service level performance measurements. 4. Supporting documentation Appendix 1 Summary of Tender Evaluation Process Appendix 2 Summary of Procurement Process Appendix 3 SME Status and Location of All Tenderers Fiona Whittaker Head of People & Organisational Development
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5. Impacts ( http://connect/report-template-guidance ) 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? As part of the suppliers submission they had to demonstrate their commitment to Fair Work practices as outlined at 2.12 above, in particular they are an accredited real living wage employer and also ensure that any sub contactors comply with the real living wage. The successful supplier also demonstrated their commitment to social value including active recruitment of priority groups and community benefits of the Contract. If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality-and-fairer- scotland-duty-impact-assessments Yes ☐ No ☒ 5.2 Financial Impact Does the report contain any financial impacts? Yes ☒ No ☐ If Yes, have all relevant financial impacts have been discussed and agreed with Financial Solutions? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? As detailed at 2.8 above the Contract value is (£2,775,000) exclusive of VAT including any option to extend the Contract. There is no potential saving on this Contract and costs will be met from service areas revenue budgets. 5.3 HR Policy Impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts have been discussed and agreed with People and Organisational Development? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact?
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5.4 Legal Impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☒ No ☐ If Yes, have all relevant legal impacts have been discussed and agreed with Legal and Democratic Solutions? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? The CCS framework contained a number of call of schedules that required consideration by colleagues in Legal Services to ensure they complied with Scottish Legislation and Council Policy. These included Data Protection, Scots Law and TUPE. 5.5 Data Protection Impact Does the report / project / practice contain or involve the processing of personal data? Yes ☒ No ☐ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☒ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e-mailed to dataprotection@northlan.gov.uk Yes ☐ No ☒ 5.6 Technology / Digital Impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? The Contract will include the provision of a web based portal, hosted in the cloud. This portal will be used to process sensitive data and will be accessed by managers, HR and employees. As part of the tender requirements the suppliers were asked to complete the Scottish Governments Cyber Security Procurement Assessment and the outcome of this be assessed by colleagues in the Information Security team to ensure compliance with the Councils’ security requirements. Where the impact identifies a requirement for technology, has an assessment been carried out (or scheduled) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☒
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5.7 Environmental / Carbon Impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? In the originating framework submissions suppliers’ environmental criteria were assessed in the technical envelope. Suppliers were required to provide evidence of their commitment to Environmental sustainability as part of the Social Value requirement. The successful supplier has committed to promoting sustainable production and consumption and an improvement in environmental quality in support of the Government’s 25 Year Environment Plan; including a commitment to recycling 95% of recyclable waste in NLC, and providing clinics close to transport links. 5.8 Communications Impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? Communication in the form of email will be required to promote the new Physiotherapy provider and Employee Assistance Programme. This will be developed by Employee Relations and supported by colleagues in Corporate Communications. Information will also need to be published on myNL. 5.9 Risk Impact Is there a risk impact? Yes ☒ No ☐ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? The Risk Assessment for Procurement (RAP) was carried out as part of the Call-off strategy document and the Contract Risk Register completed. The overall risk outcome for this Contract was low. A possible risk is if the procurement fails the impact this will have on provision of service, albeit the impact on the Council overall would be low.
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Appendix 1 – Summary of Tender Evaluation Process Final Rank Tenderer Name Total Tender Score (%) Recommended for Contract Award (Y / N) 1 Health Management Limited 84.60 Y
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Appendix 2 – Summary of Procurement Process Response Procurement Procedure Utilised: Mini Competition Governing Legislation / Regulations: Public Contracts (Scotland) Regulations 2015 Date Contract Strategy Approved: 09 March 2022 Number of Companies Invited to Take Part: Expression of Interest were sent to the 6 Suppliers on Lot 1; 3 wished to be invited to take part. Tender Return Deadline: 20 April 2022 Number of Tenders Received: 1 Where Only One Tender Is Received, Why?: Resource Tenders Received from SME’s: 0 Tenders Received from NLC Based Tenderers: 0 Number of Non−compliant Tenders: 0 Number of Compliant Tenders: 1 Number of Recommended Tenderers: 1 Basis of Contract Award: Quality: 60% Price: 40% Evaluation Team: Officers from People and Organisational Development Anticipated Contract Start Date: 01 June 2022 Total Contract Period (Months): 36 + 12 + 12 Maximum Total Contract Value: £2,775,000
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Appendix 3 – SME Status and location of all Tenderers Name of Tenderer Size of Tendering Organisation (Micro, Small, Medium or Large) Location (Local Authority / Council Area) Health Management Limited Large Leicester, England