(Environment Portfolio Holder) To consider the attached report (C-026-2011/12).
Decision:
(1) That the contract with Sita UK be extended for a further two years commencing on 5 November 2012 and ending on the 4 November 2014 for all of the currently contracted waste services;
(2) That the projected total savings for the Continuing Services Budget from the extension of the waste management contract for the period between January 2012 and November 2014 be noted, including an unquantifiable sum arising from the Council receiving 50% of any increase of more than 30% in the value of recyclables above the “Let’s Recycle” national materials indices from the beginning of the extension;
(3) That, for reasons of quality and value for money, the Grounds Maintenance Service be retained in-house; and
(4) That a review of the current waste service specification be undertaken as part of the process leading to an EU procurement exercise for the new contract commencing in November 2014.
Minutes:
The Environment Portfolio Holder presented a restricted report regarding the extension of the Waste Management Contract with Sita UK.
The Portfolio Holder reported that the contract with Sita UK was signed and sealed in November 2007 for the provision of waste and recycling collections, bulky household waste, street cleansing and weed spraying. The contract term was for five years, with an option to extend for a further two years with the agreement of both parties. Any extension to the contract had to be agreed by May 2012 (i.e. before 6 months of the cessation of the contract).
The Cabinet was informed that, in view of the need for the Council to make significant savings in its revenue budgets for 2012/13 and onwards, consideration had been given to extending the contract with Sita UK or to commencing an EU procurement exercise for a new contract to commence in November 2012. This review was undertaken in the light of Counsel’s opinion regarding extending the existing contract and the impact of the Essex Waste Inter Authority Agreement on any savings generated. The review had indicated that the Council could achieve significant savings for the Continuing Services Budget by extending the current contract for a further two years, and this was recommended to the Cabinet for approval.
The Portfolio Holder added that consideration had also been given to taking the street cleansing element of the contract out of the extended contract and tendering it as a Street Scene contract alongside the Grounds Maintenance Service. This was rejected on the basis of an external evaluation of the Grounds Maintenance Service establishing that no overall benefit would be likely to accrue from such an action. The proposed review of the waste service specification would also include a review of the current operations.
The Director of Environment & Street Scene also indicated that the collection round structures would not be significantly amended with only three years left before the contract would be re-tendered, but the Council was involved in on-going discussions with Sita UK about minor changes, which could further improve efficiencies.
Decision:
(1) That the contract with Sita UK be extended for a further two years commencing on 5 November 2012 and ending on the 4 November 2014 for all of the currently contracted waste services;
(2) That the projected total savings for the Continuing Services Budget from the extension of the waste management contract for the period between January 2012 and November 2014 be noted, including an unquantifiable sum arising from the Council receiving 50% of any increase of more than 30% in the value of recyclables above the “Let’s Recycle” national materials indices from the beginning of the extension;
(3) That, for reasons of quality and value for money, the Grounds Maintenance Service be retained in-house; and
(4) That a review of the current waste service specification be undertaken as part of the process leading to an EU procurement exercise for the new contract commencing in November 2014.
Reasons for Decision:
Sita had offered up considerable CSB savings if an extension was granted, and given that the most difficult year for budget savings was 2012/13, this would greatly assist the Council. Whilst additional savings might accrue from a tendering exercise, there would be a cost to that process itself (circa. £100,000) and any additional savings that might arise would not effectively materialise until late into the 2012/13 financial year.
A more detailed review of the contract specification would be required to ensure that when the re-tendering for the contract started in November 2014, the Council could achieve the best possible value.
An external evaluation of the Grounds Maintenance service had declared it cost effective and that no clear financial benefit was likely to accrue through tendering it separately or as part of a street scene package with Street Cleansing.
Other Options Considered and Rejected:
To not extend the contract but re-tender with a view to a new contract being in place for November 2012.
To not extend the contract but bring the entire waste service back in house with effect from November 2012.
To extend only the waste related items of the contract, keeping street cleansing outside of the contract and tendering that alongside the Grounds Maintenance service.