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Waverley Borough Council Committee System - Committee Document

Meeting of the Executive held on 19/04/2005
GROUNDS MAINTENANCE SERVICE CONTRACT
– TENDER EVALUATION AND PROPOSED AWARD OF CONTRACT



Summary & Purpose
The purpose of the report is to seek approval for the award of the Grounds Maintenance Contract to commence on 1st November 2005. The report outlines the tender process undertaken, the subsequent evaluation and the officers’ conclusions and recommendations.

Quality of Life Implications
Natural Resource Use
Pollution Prevention and Control
Biodiversity and Nature
Local Environment
Social Inclusion
Safe Communities
Local Economy
Natural
Resource Use
Pollution
Prevention and Control
Biodiversity
and Nature
Local
Environment
Social
Inclusion
Safe, Healthy
and Active
Communities
Local
Economy
Positive
Positive
Positive
Positive
Positive
Positive
Positive


APPENDIX B
WAVERLEY BOROUGH COUNCIL

SPECIAL EXECUTIVE – 19TH APRIL 2005
_________________________________________________________________________
Title:
GROUNDS MAINTENANCE SERVICE CONTRACT
– TENDER EVALUATION AND PROPOSED AWARD OF CONTRACT
[Wards Affected: All]
_________________________________________________________________________

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

Annexes to this report contain 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 1 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 the report is to seek approval for the award of the Grounds Maintenance Contract to commence on 1st November 2005. The report outlines the tender process undertaken, the subsequent evaluation and the officers’ conclusions and recommendations.
_________________________________________________________________________
Quality of life implications – social, environmental & economic (sustainable development):

Natural Resource Use
Pollution Prevention and Control
Biodiversity and Nature
Local Environment
Social Inclusion
Safe, Healthy and Active Communities
Local Economy
Positive
Positive
Positive
Positive
Positive
Positive
Positive

The Grounds Maintenance Contract is one of the Council’s more visible services, covering horticultural maintenance including grass cutting, routine operations such as building cleaning and playground servicing, sports pitch maintenance and cemetery maintenance, including burials. This service is provided borough-wide on land in the Council’s ownership, including parks and gardens, recreation grounds, housing estates and open and closed churchyards.

It is nationally recognised that well maintained outdoor recreational areas, open spaces and amenity areas make a fundamental contribution to the quality of life. These areas are socially inclusive and can be accessed by all members of the community. The activities carried out within these sites contribute to creating healthy and active communities.


E-Government implications:

There are no direct e-government implications arising from this report. However, Waverley will be seeking to maximise the use of technology to improve communications and quality of information shared between the Council and the successful contractor. The evaluation process considered contractors’ proposals for developing such arrangements.

Resource and legal implications:

This report has significant resource implications for Waverley’s budget over the next 7 years which are detailed in the report. This report also has implications for Waverley’s staff. Members have agreed to transfer the contract monitoring function in-house, as opposed to being included within the contract and undertaken by the contractor (the current arrangement). These costs are shown in the report in the comparison to the current budget.
_________________________________________________________________________
Introduction

1. The Council’s major environmental services contracts, Domestic Waste and Recyclables Collection, Environmental (Street) Cleaning and Grounds Maintenance are currently operated under three separate contracts, each of which expires on 31st October 2005. The Executive, at its meeting on 9th March 2004, resolved that the Grounds Maintenance function continue to be tendered separately under a Grounds Maintenance Services Contract. It further resolved that the contract be tendered under the European Communities (EC) “Restricted” procedure.

2. The EC Public Procurement Directives and UK Regulations require public sector organisations to let contracts for works, supplies and services that exceed certain financial thresholds, in accordance with prescribed procedures contained in the Regulations. The contracts referred to in Clause 1 fall within those requirements. The “Restricted” procedure enables the Council to restrict the number of tenderers to those with the financial standing, technical capacity and experience that are best suited to the nature and scale of the contracts. The Directives also prescribe the manner of advertising of the contracts, and the manner of the tender evaluations.

3. Waverley’s Strategic Risk Assessment in 2003/04 identified the potential for insufficient competition in the letting of these major contracts as being one of the biggest risks facing the Council. To attempt to reduce this risk, throughout 2004 officers invited potential contractors to discuss the forthcoming tender process and to encourage their interest in tendering.

Contract Notices

4. Notice of the Council’s intention to tender the Grounds Maintenance Service was posted in the Supplement to the Official Journal of the European Communities, in accordance with the Public Procurement Regulations, on 2nd June 2004, and in national contract and trade publications and the local press, in accordance with the Council’s Contract Procedure Rules. Suitably qualified contractors were invited to confirm their interest in tendering for the contracts by completing a tender pre-qualification questionnaire detailing their financial stability, experience, operational performance and proficiency. Contractors were required to provide referees for their performance on similar contracts, preferably in the local authority arena.


Selective Tendering

5. The objective of selective tendering is to ensure that tenders are received only from those contractors who have demonstrated an appropriate level of financial stability and technical competence, and to limit their number to a manageable level. Expressions of interest were submitted by 30 contractors, including the majority of leading grounds maintenance companies working in the UK. Of the 30 initial expressions of interest, 24 companies completed the tender Pre-Qualification Questionnaire and following evaluation, 6 of these were considered to be sufficiently experienced and qualified to deliver the service required in Waverley’s contract.

Select List of Tenderers

6. The select list of contractors to be invited to tender for the Grounds Maintenance Services Contract was approved by the Executive at its meeting of 4th October 2004. The tender documents were accordingly despatched to those contractors on 26th November 2004 with a date for submission of tenders of 21st January 2005.

Contract Specification – Basis of Tenders

7. In February 2004, the Council considered the findings of the Parks and Open Spaces Fundamental Service Review. The three main recommendations for service improvements requested by the public were;
8. The Executive agreed at its meeting of 9th March 2004, to tender the contract based on the current service delivery level with the option for tenderers to submit prices for the 3 additional service improvement options.

Option i) Improved grass cutting specification for identified housing amenity sites. Option ii): Dedicated Site-Specific Staff
o Broadwater Park;
o Farnham Town Centre Sites – Gostrey Meadow, Borelli Walk, Brightwells Gardens & Riverside Walks;
o Godalming Town Centre Sites – The Burys, Phillips Memorial Ground, Holloway Hill Recreation Ground;
o Haslemere Recreation Grounds – Woolmer Hill Sports Ground, Haslemere Recreation Ground and High Lane Recreation Ground. Option iii: Weekend Roving Parks Patrols

9. The tendered price of the enhancement options ii) and iii) are highlighted in (Exempt) Annexe 3. These options were included in the tender documents as self-contained services so there should be no impact on the core service or tender price of not implementing one or either of these options. Members should note that the Council currently faces significant annual costs associated with the results of vandalism and graffiti within its parks and open spaces. The introduction of site-specific staff would play a significant role in deterring anti-social behaviour, which would have a positive effect on reducing these costs. In addition, it is anticipated that the site-based staff would work with and support local users groups in applying for lottery and other sources of funding, which the Council alone is unable to access for parks capital schemes such as children’s playgrounds and access improvements.

Tender Evaluation Process

10. The published invitation to express an interest in tendering for this contract and the subsequent instructions to the selected tenderers confirmed that the contract would be awarded to the contractor producing the “best value” proposal, i.e. the most economically advantageous tender taking into account price, quality and sustainability, and not necessarily the lowest price submission. The successful contractor must be able to demonstrate both the understanding and the capacity to deliver quality, customer-focused services and must give confidence to the Council in its ability to deliver the service and adapt to its development and changing needs over the life of the contract.

11. The evaluation criteria was produced in the tender documents, in accordance with Waverley’s Contract Procedure Rules and EC. Public Procurement Directives. To further ensure the integrity of the process, a consultant with expertise in tendering of grounds maintenance services, was engaged to carry out an independent evaluation of the tender submissions and performance of the tenderers at interview.


12. The tender evaluation process comprised the assessment of:-

a. the priced Bill of Quantities and other supporting information including each tenderer’s Draft Operational Plan and additional supporting information;
b. the tenderers’ presentation of proposed service delivery and management arrangements;
c. the contractor’s response to:-
Evaluation of Submissions

13. The Council has attracted an excellent level of interest in its Grounds Maintenance Contract including interest from most of the leading UK grounds maintenance providers. This has resulted in the submission of 6 proposals from reputable companies.

14. Following examination and evaluation of the tender proposals and supporting information it was determined that three tenders warranted closer examination. The three contractors were accordingly invited to present their proposals, in person, to the Evaluation Team and to respond to matters of clarification and elaboration sought by the team. General questions concerning the proposed service delivery as well as questions specific to the respective contractor’s bid were tabled. Each contractor was tested on its understanding of the Council’s specified requirements and its ability to provide a quality service.

15. An audio-visual record of the interviews was made so that clarification and assurances made during the interviews could be incorporated into any subsequent contract.

16. Each of the 3 contractors made presentations and responded to the search for clarification, elaboration and reassurance by the Evaluation Team. The interviews brought a greater clarity and understanding of the proposals.

17. The ‘best value’ proposal has been determined, in accordance with the European Public Procurement Regulations and the Council’s Contract Procurement Rules, after evaluation of the combination of price and quality scored in accordance with the pre-determined evaluation matrix, taking into account the factors set out in paragraph 12. The most economically advantageous tender, taking all factors into account, was assessed to be that of Contractor B.

Summary of Evaluation Scores

18. The evaluation was divided 50% quality assessment and 50% financial assessment. The main headings and weightings applied in the quality evaluation are shown at Annexe 1. The financial evaluation considered a number of factors including tender price, comparison of resources and risks associated with the tenders and the relative financial strength of the contractors. Table 1 below summarises the scoring for the grounds maintenance contractors.

Table 1 – Summary of evaluation scores
Contractor
Quality Score (out of 500)
Financial Score (out of 500)
Total Score (out of 1000)
Rank
A
183
366
549
4
B
369
349
718
1
C
253
382
635
2
D
231
125
356
6
E
322
210
532
5
F
407
145
552
3
Tender Price and Budget Implications

19. The figures shown in (Exempt) Annexe 3 are the tender price for the base ‘as-is’ contract specification, although enhancements are included for some grass cutting areas which either have no impact on cost or have reduced the tendered price. As explained earlier in the report, contractors were also asked to price for two options which are desirable additional service features. These prices are also shown in (Exempt) Annexe 3 for information.

20. In order to make a comparison with Waverley’s current budget position, two adjustments are necessary and these figures are shown in (Exempt) Annexes 4 and 5. Firstly, as referred to earlier in the report, the Council agreed to transfer the contract monitoring function from being the responsibility of the contractor to being undertaken in-house by Waverley staff. This cost is currently included within the existing contract price but, under the new arrangements, the cost will be direct Waverley expenditure and will result in a lower contract cost. Secondly, there are some elements of work which have been transferred from the Street Cleaning contract to the Grounds Maintenance contract. The estimated value of this work is included in the comparison with budget for both contracts. The financial effect of the adjustments is shown in (Exempt) Annexe 5.

21. The estimated cost to Waverley of the grounds maintenance contract in 2005-06 and in a full year of the new contract, assuming the preferred contractor (B) is awarded the contract, is included in (Exempt) Annexe 4. The total for 2005-06 is a combination of 7 months of the current contract cost plus 5 months of the new contract cost based on the ‘as-is’ service, subject to the adjustments referred to above. The full year cost is based on the tendered contract costs for the ‘as-is’ service, adjusted for the items referred to above.

22. The impact on Waverley’s budget is shown in (Exempt) Annexe 5. Approximately 12% of the grounds maintenance contract cost is recharged to the Housing Revenue Account for the maintenance of housing land. The Annexe shows the impact on both the General Fund and the HRA assuming that the preferred contractor (B) is awarded the ‘as-is’ contract.

23. For comparison, the table in (Exempt) Annexe 6 shows the full year impact on Waverley’s budget of each of the contractor’s tenders. There are potential diseconomies following the proposed housing stock transfer in the grounds maintenance contract and monitoring costs. The extent of these diseconomies will be determined by the outcome of negotiations should the ballot be successful.

Other Financial Issues and Risk Analysis

24. One of the financial uncertainties that Waverley faces each year is contract inflation. The current contracts allow for an annual price uplift based on a number of price indices which, in recent years, has varied year-on-year and been significantly above the rate of inflation. The new contracts allow for an RPI based uplift which will give Waverley more certainty throughout the period of the contract and, based on past evidence, produce reduced year on year price increases.

25. The following table identifies the key risks associated with the procurement of the grounds maintenance contract and details the actions that have been taken to mitigate the risk as far as possible during the procurement process. It must be noted that many of the risks are not within the Council’s control. Therefore, whilst reasonable steps have been taken to avoid these risks materialising, risks cannot be prevented completely.

RiskAction taken to reduce risk
Risk of insufficient competition resulting in Waverley not securing the best value service proposal - Officers met with potential contractors in advance of the tender process to discuss potential interest
-
Risk of uncertainty of the year on year contract uplift and the impact on Waverley’s budget- The new contract now allows for a RPI-based annual uplift
Risk of challenge from unsuccessful contractor- Evaluation criteria was set prior to the tender return date and in accordance with the Council’s Contract Procedure Rules
- Evidence for all stages of the evaluation has been recorded
- External expertise was employed to assist with the evaluation process
Risk of contractor having financial difficulties during the contract- A full financial assessment was undertaken at the pre-qualification stage and this was updated if possible at the post tender stage. All contractors invited to tender were in a sound financial position
Risk of contractor not performing to the contract conditions- The contract requires the contractor to provide a performance bond
- The contract provides for action to be taken in the event of service defaults
- The contract monitoring has been brought in-house to enable much more effective monitoring
Risk of the contractor’s tender being unsustainable throughout the period of the contract- The tender prices for all items were examined individually and in total and contractors tested at interview if necessary
Risk that the contract is under-resourced - The tender required contractor to provide a detailed breakdown of resources and these have been examined in detail by officers

Town and Parish Council Participation

26. A report was presented to the Executive, at its meeting on 12th July 2004, following consultation with Town and Parish Councils, in response to some requests to be involved in the management, monitoring and augmenting of the major service contracts. In accordance with the resolutions in relation to that report, the contract has been structured to identify, by description and cost, items of work, which could be assigned to the Town/Parish Councils or augmented at their cost if they elect to do so e.g. enhanced grass cutting standards have been included as provisional items to be called upon by the Council as required.

27. The revised contract monitoring arrangements will allow more direct access by Town and Parishes for reporting local complaints and comments on standards and performance of grounds maintenance activity.

Conclusion

28. The evaluation process has been very detailed and thorough. This process has concluded that Contractor B offers the best value to the Council. A summary of the benefits and strengths of the preferred contractor is shown in (Exempt) Annexe 7.
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Recommendation

That the Executive recommends to Council that:

1. Contractor B be the Council’s preferred contractor for the grounds maintenance contract for the period 1st November 2005 to 31st October 2012;

2. officers be instructed to negotiate the detailed contractual terms and, subject to the Director of Finance, Director of Environment and Leisure and the Solicitor to the Council being satisfied with the agreed terms, to award the contract to contractor B;

3. the contract be awarded on the basis of the current service level for the remainder of this financial year; and

4. the draft revenue estimates for 2006/07 reflect Contractor B’s cost of implementing Option (ii), Dedicated Site-specific Staff and 10,000 towards Option (iii) Weekend Roving Staff Patrols, to be called upon as required.
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Background Papers (DoE&L/DoF)

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

______________________________________________________________________


CONTACT OFFICER:

Name: Julie Maskery Telephone: 01483 523432
E-mail: jmaskery@waverley.gov.uk

Name: Graeme Clark Telephone: 01483 523236
E-mail: grclark@waverley.gov.uk

Name: Paul Wenham Telephone: 01483 523238
E-mail: pwenham@waverley.gov.uk

Name: Peter Maudsley Telephone: 01483 523398
E-mail: pmaudsley@waverley.gov.uk








Comms/Executive/2004-05/487
42965

ANNEXE 1

Quality Evaluation Headings and Weightings

In the Instructions to Tender, it was stated that the Council required the submission of Method Statements in the form of a Draft Operational Plan in order to assess the working proposals & ability of the contractor in a number of relevant areas – as shown in the table below. Further detail was provided in the Conditions of Contract on those issues needing to be addressed under each heading in order that the Council could assess fully each Tenderer’s ability and experience.

As a separate exercise, the Council arrived at an overall weighting of the importance of each element (also shown in the table below) and all the information was lodged with the District Auditor in advance of the receipt of tenders.

Required Information
Weighting
Work Programming
6
Vehicles and Machinery
7
Staffing and Qualifications
10
Training
4
Health and Safety
2
Communication and Customer Care
3
Technical Operation and Maintenance
6
Management and Quality Information
6
Environmental Issues
4
Income and Expenditure
2
50


Each of the above was marked out of 10, thus making a total of 500 points for quality once the weighting had been applied.

Members of the Working Group marked each tenderer’s Method Statements individually. The Working Group then met to adopt a consensus score, which was in turn brought to the full Evaluation Panel, which consisted of the Director of Environment and Leisure, the original markers, plus officers from Audit and Legal services.







Comms/Executive/2004-05/487
42965