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Waverley Borough Council Committee System - Committee Document

Meeting of the Community Overview and Scrutiny Committee held on 10/09/2002
PROCUREMENT OF CYCLICAL MAINTENANCE CONTRACTORS
FOR 2003/04 AND SUBSEQUENT YEARS



The purpose of this report is to explain the methodology for procuring the cyclical painting contracts for 2003/04 and subsequent years, and to obtain approval for the procedure, outlined in the report. The resource implications are referred to in the report. There are no environmental implications.
APPENDIX I

WAVERLEY BOROUGH COUNCIL

COMMUNITY OVERVIEW AND SCRUTINY COMMITTEE
10TH SEPTEMBER 2002

Title:
PROCUREMENT OF CYCLICAL MAINTENANCE CONTRACTORS
FOR 2003/04 AND SUBSEQUENT YEARS

[Wards Affected: N/A]

Note pursuant to Section 100B(5) of the Local Government Act 1972

Annexe 2 to this report contains exempt information by virtue of which the public is likely to be excluded during the item to which the report relates, as specified in Paragraph 9 of Part I of Schedule 12A to the Local Government Act 1972 viz:-

Any terms proposed or to be proposed by or to the authority in the course of negotiations for a contract for the acquisition or disposal of property or the supply of goods or services.

Summary and Purpose

The purpose of this report is to explain the methodology for procuring the cyclical painting contracts for 2003/04 and subsequent years, and to obtain approval for the procedure, outlined in the report. The resource implications are referred to in the report. There are no environmental implications.

Introduction

1. Every year the Council carries out repairs and external redecoration to its housing stock. This work is carried out on a five-year cycle with approximately 20% of the stock being painted in any one year.

2. The work involves redecoration to all external parts of a property that have previously been decorated. Additionally, areas that do not require redecoration, such as uPVC windows and doors and plastic and aluminium guttering are cleaned.

3. Prior to redecoration, repairs are carried out by the contractor where required. The majority of these repairs are to the doors, windows and other joinery elements where the timber has decayed. Many repairs are also carried out to guttering.

4. The redecoration work is administered and supervised by the Surveying and Maintenance section of the Housing Department. Each property is inspected in advance of the works to identify any repairs required. The work then carried out by the redecoration contractor is inspected at three different stages by your officers. Each stage has to be passed prior to work proceeding to the next stage or being finally accepted.

5. The contractors are appointed annually in accordance with existing authorisations. Each contract is tendered on a lump sum basis with the contractors invited to tender being selected from the standing list for redecoration contractors. Generally the lowest tender is accepted. Many other Local Authorities and similar organizations who have a cyclical redecoration programme undertake this work in a similar way.

6. The redecoration work is divided for the east and west of the Borough into two separate contracts, with two separate contractors.

7. The operatives employed by the contractors who undertake the redecoration work can be directly employed by the company, but often are working on a sub contracted basis. The sub-contracted labour generally undertakes the redecoration on the same “lump sum” basis as the main contractor but at a lower rate. Consequently, the sub-contracted labour changes frequently as more favourable rates or conditions on other contracts are discovered. This results in poor quality and reduced customer satisfaction, together with a requirement for increased supervision by your officers. Due to the short term “annual” nature of the contract currently awarded, there is understandably a reluctance for the contractor to employ more directly employed labour. If a longer term contract were awarded, your officers believe a more stable painting workforce would be generated.

8. Customer satisfaction with this area of the service is not high, and substantial time is taken in dealing with queries and complaints. The expectation of the tenants is often not met by the perceived quality of delivery.

Best Value Review

9. Target 7 of The Improvement Plan resulting from the Best Value Review of Programmed and Cyclical Maintenance recommended that an area of work be procured in accordance with the principles identified within the Egan report – “Rethinking Construction”, as a pilot.

Proposed Improvements

10. It is proposed therefore, that for the financial year 2003/04, as a means of addressing the problems outlined above, to carry out the procurement of the contract in one area using a “Partnering” approach.

11. The contract would be let for three years with scope to extend this for a further two years subject to satisfactory performance. Continuity of the contract would be subject to annual reviews of performance, which would be based on performance indicator results.

12. Invitation to tender would be restricted to those contractors who proved to the Council that they were committed to providing high quality workmanship and excellent customer care. Financial and technical references would be taken up on each one.

Procurement Process

13. It is proposed that the procurement process in outline will follow these stages:-

(i) Advertise asking for expressions of interest from suitable contractors.

(ii) Contractors complete a qualitative questionnaire, which is evaluated and scored to collate a shortlist.

(iii) Shortlist of suitable contractors are visited and interviewed and a tender shortlist formulated.

(iv) Qualitative and financial tendering.

(v) Final interviews and appointment of contractor.

(vi) Development of the detailed working arrangements prior to starting work.

14. This procedure may be refined subject to a suitable number of the appropriate type of contractors proceeding to the next stage and advice from the Council’s consultants. The interview processes would be carried out by a panel, which would include the Portfolio Holder for Housing and a Tenants’ Panel representative, as well as by officers. All decisions would be based on a mixture of criteria to determine the most appropriate contractor(s).

Monitoring

15. In order to monitor the success of the new procurement method, it is proposed that the Borough be split into two areas (as currently), but awarding one contract using the present method, the other using the new method.

16. Key Performance Indicators, including customer satisfaction, would be identified and recorded during the course of the contracts. The evaluation and comparison of these Key Performance Indicators from each contract, would be used to determine the success or otherwise of the new method of procurement when compared with the usual method.

Appointment of Consultants/Resource Implications

17. The decisions made in the procurement of a contract of this nature where price is not the only consideration need to be fair and transparent. As with the Measured Term Contract last year, which used the same method of procurement, it is proposed that consultants be appointed to assist and advise your officers and Members on the most appropriate procedures in this case. Two consultants with proven experience in this area of work have submitted fee proposals and been interviewed. The fee proposals from the consultant your officers consider to be the most appropriate are detailed in (Exempt) Annexe 1.

Environmental Implications

18. There are no environmental implications arising from this report.

Recommendation

It is recommended that the Committee commends to the Executive that:-

1. External Redecoration and Repairs be adopted as the area to pilot a “Partnering” contract, with the contractor being appointed and monitored in accordance with the procedure detailed in the report;

2. the proposed contract be exempt from Standing Orders (Contracts) 105(3) and 111(1) to allow procurement in accordance with the procedures detailed in this report; and

3. the fee proposal as detailed in (Exempt) Annexe 1 be accepted and that the company concerned be appointed to provide consultancy support for this contract procurement, expenditure to be met from within the existing provision for Programmed Maintenance in the Housing Revenue Account.

Background Papers (DoH)

There are no background papers (as defined by Section 100D(5) of the Local Government Act 1972) relating to this report.

CONTACT OFFICER:

Name: Andrew Booker Telephone: 01483 523076
E-mail: abooker@waverley.gov.uk

comms/o&s2/2002-03/031