Contract Award for Treatment and Disposal of Residual Waste from Household Waste Recycling Centres (HWRCs)
North Lanarkshire Council · 24 August 2022
Back to Environment and Place Committee — 24 August 2022 and its agenda
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North Lanarkshire Council Report Environment and Place Committee Does this report require to be approved? ☐ Yes ☒ No Ref: NLC-CPT-21-081 AM/ TM Date: 24 August 2022 Contract Award for Treatment & Disposal of Residual Waste from Household Waste Recycling Centres (HWRCs) From Andrew McPherson, Head of Regulatory Services and Waste Solutions E-mail mcphersona@northlan.gov.uk Telephone 07939 280467 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 Executive Director approved the award for the Treatment & Disposal of Residual Waste from Household Waste Recycling Centres (HWRCs) (the ‘Contract’) on 14 March 2022 to Patersons of Greenoakhill Limited. Following successful conclusion of the required standstill period, the Contract was formally awarded on 31 March 2022. To enable appropriate service provision within the Contract, the Contract was split in to 2 separate lots, Lot 1 – North Area and Lot 2 – South Area with Patersons of Greenoakhill Limited being awarded both lots. The Contract is for an initial period of 36 Months and commenced on 01 April 2022 and will initially expire on 31 March 2025. The Council reserves the right to extend the Contract for 2 additional 12-month periods until 31 March 2027. The value of the Contract across both lots shall not exceed Eighteen Million Pounds Sterling (£18,000,000.00) exclusive of VAT. Recommendations It is recommended that Committee acknowledges the award of the Contract in accordance with GCSO 21.3.2 to Patersons of Greenoakhill Limited for both Lot 1 and 2 at the maximum value of Eighteen Million Pounds Sterling (£18,000,000.00) exclusive of VAT. The Plan for North Lanarkshire Priority Improve North Lanarkshire's resource base Ambition Statement (17) Ensure we keep our environment clean, safe, and attractive
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1. Background 1.1 The requirements within the previous contract were under contract with Viridor Dunbar Waste Services Limited and Levenseat Limited. These contracts were due to expire on 31 March 2022. 1.2 North Lanarkshire Council are responsible for managing and disposing/recycling waste collected at the six Household Waste Recycling Centres (HWRCs) as detailed below: a. HWRC Wardpark Court, Cumbernauld, G67 3HF; b. HWRC Stobcross Street, Coatbridge, ML5 1BE; c. HWRC Ladyann Crescent, Airdrie, ML6 9RY; d. HWRC Reema Road, Bellshill, ML4 1RR; e. HWRC Foundry Road, Shotts, ML7 5DX; and f. HWRC Netherhall Road, Wishaw, ML2 0JG 1.3 Within the Contract, services required include (but are not limited to): Provision of facility for the receipt, segregation, treatment and disposal of HWRC residual waste, delivered by the Council, from the Council’s 6 licensed Household Waste Recycling Centres (“HWRC”). It is anticipated that circa 34,000 tonnes of HWRC residual waste is disposed of across these 6 HWRC’s annually. 1.4 To enable appropriate service provision within the Contract, the Contract was split into two separate lots, Lot 1 – North Area which comprises HWRC sites listed within 1.2a – d above, and Lot 2 – South Area which comprises HWRC sites listed within 1.2e – f above. 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 and the identified procurement procedure (route to market) dictated that the procurement procedure be undertaken in accordance with the Procurement (Scotland) Regulations 2016. 2.3 The procurement procedure was undertaken as a “Mini Competition” from the Scotland Excel Dynamic Purchasing System (DPS) for the Treatment and Disposal of Recyclable and Residual Waste (27/17), Lot 21 – Treatment and Disposal of Residual Waste. 2.4 The Contract award recommendation is made on the basis of the tenderer who submitted the most economically advantageous tender for both lots. 2.5 The tenders submitted by Paterson’s of Greenoakhill Limited were evaluated as representing the most economically advantageous tender for this Contract for both lots.
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2.6 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. Cost, Budget and Associated Savings / Increases 2.7 The value of the Contract shall not exceed Eighteen Million Pounds Sterling (£18,000,000.00) exclusive of VAT including all extension options available. 2.8 The costs associated with contract delivery will be contained within the revenue budget for Waste Solutions. 2.9 A spend comparison against historic gate fee/price per tonne rates to those obtained by Patersons of Greenoakhill Limited for both lots of the Contract demonstrated a potential cashable increase of circa 6.91% in cost. The cashable increase figure detailed above is based on indictive quantities set against items within the procurement procedure as future demand cannot be guaranteed or predicted. However, the Contract may deliver soft/non-cashable savings due to the structure of the Contract being partially different from historic approaches. Accordingly, the two-lot approach with the Contract should minimise vehicle running times and hence reduces costs in fuel, manpower and overheads in turn creating a more efficient Contract. Price Stability 2.10 Prices shall be firm for the first 12 (twelve) months, until 31 March 2023. Subsequent to that initial period, there is provision within the Contract for Patersons of Greenoakhill Limited to request annual reviews however these will require to be no greater than the current National Retail Price Index & landfill tax. It will be at the sole discretion of the Council whether to accept or reject any pricing amendment proposed. Community Benefits 2.11.1 The Council is committed to maximising the delivery of community benefits. The procurement included a community benefit requirement, this approach is designed to deliver local community benefits where possible. 2.11.2 Within their Tender, Patersons of Greenoakhill Limited committed to deliver the following community benefits within the Contract where possible: • Engage with the Council to create employment opportunities for longer term job seekers (including training); • Create employment opportunities for people with disabilities; • Provide Modern Apprenticeship opportunities; • Accommodate schoolwork experience placements; and • Engage with the Council to identify mechanisms to support key groups back into the workplace 2.11.3 The community benefits delivered as part of the Contract potentially include the creation of jobs or apprenticeships. Fair Work First
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2.12 Within their tender submission, Patersons of Greenoakhill Limited advised that they have committed and / or will commit to the following areas of the Scottish Governments “Fair Work First” initiative: • 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. • Confirming within their tender submission that they are a Living Wage Employer and provide rates of pay to their staff above the minimum living wage requirement. • Offer flexible and family friendly working practices for all workers from day one of employment. • Oppose the use of fire and rehire practices. Contract Strategy 2.13 Officers from Regulatory Services and Waste Solutions will be responsible for managing the Contract which will be undertaken in accordance with the Council’s agreed approach to contract and supplier management. 3. Measures of success The Contract will deliver the following outcomes: 3.1 The appointment of a service provider who has the experience and capability to deliver an innovative, high quality and responsive waste disposal and recycling service that will deliver the minimum delivery targets within the Contract. 3.2 The contract award procedure is compliant with the procurement legislation and internal procedures. 3.3 That best value is both demonstrable and achieved. 3.4 That the Contract secures a range of community benefits. 3.5 That the Contract secured a number of “Fair Work First” initiatives. 3.6 That the Contract performance is proactively managed against a number of local Key Performance Indicators and national targets. 3.7 A collaborative approach to the procurement of the requirement, minimising the burden on internal resource and leveraging the economies of scale. 4. Supporting documents Appendix 1 Summary of Tender Evaluation Process Appendix 2 Summary of Procurement Process Appendix 3 SME Status and Location of All Tenderers
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Andrew McPherson Head of Head of Regulatory Services and Waste Solutions
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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 ☒ 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? The Council has a statutory obligation to provide HWRC’s for the collection of waste streams including residual wastes. This has been built into the residual waste budget for Waste Solutions. 5.3 HR Policy Impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ 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 ☒ 5.5 Data Protection Impact Does the report / project / practice contain or involve the processing of personal data? 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 ☒
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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? The Contract has built in an element of diversion and recycling for the waste stream. This will have a positive impact on the Councils approach to reduce carbon emissions. 5.8 Communications Impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ 5.9 Risk Impact Is there a risk impact? Yes ☐ No ☒ There are no significant risk implications arising from this report.
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Appendix 1 – Summary of Tender Evaluation Process Lot 1 – North Area Final Rank Tenderer Name Total Tender Score (%) Recommended for Contract Award (Y / N) 1 Paterson’s of Greenoakhill Limited 93.00% Yes 2 Dow Group Limited 87.44% No Lot 2 – South Area Final Rank Tenderer Name Total Tender Score (%) Recommended for Contract Award (Y / N) 1 Paterson’s of Greenoakhill Limited 93.00% Yes
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Appendix 2 – Summary of Procurement Process Response Lot 1 Lot 2 Procurement Procedure Utilised: Mini Competition DPS Owner Scotland Excel DPS Title Treatment and Disposal of Recyclable and Residual Waste DPS Reference Number 27/17 DPS Lot Reference Lot 21 – Treatment and Disposal of Residual Waste Governing Legislation / Regulations: Procurement (Scotland) Regulations 2016 Date Contract Strategy Approved: 16 September 2019 (Overarching Strategy for the Scotland Excel Treatment and Disposal of Recyclable and Residual Waste (27/17) Dynamic Purchasing System) Date ITT Documents Published: 21 January 2022 Number of Companies Invited to Take Part: 29 Tender Return Deadline: 07 February 2022 Number of Tenders Received: 2 1 Tenders Received from SME’s: 1 0 Tenders Received from NLC Based Tenderers: 2 1 Number of Non−compliant Tenders: 0 0 Number of Compliant Tenders: 2 1 Number of Recommended Tenderers: 1 1 Basis of Contract Award (Both Lots): Quality: 20% Price: 80% Evaluation Team: Officers from Waste Solutions Anticipated Contract Start Date: 01 April 2022 Total Contract Period (Months): 36 + 12 + 12 Maximum Total Contract Value: £18,000,000.00
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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) Paterson’s of Greenoakhill Limited Large North Lanarkshire Dow Group Limited Medium North Lanarkshire