I hereby give notice that an ordinary meeting of the Tenders and Procurement Committee will be held on:
Tuesday, 29 July 2014
Tenders and Procurement Committee
Cr Anae Arthur Anae
Cr Cameron Brewer
Cr Sharon Stewart, QSM
Cr Sir John Walker, KNZM, CBE
Mayor Len Brown, JP
Deputy Mayor Penny Hulse
(Quorum 3 members)
18 July 2014
Contact Telephone: (09) 357 3096
TERMS OF REFERENCE
The Committee is established to assist the Chief Executive to undertake the management procedure of ensuring sound probity procedures are followed in relation to procurement of goods and services necessary to deliver on the work programme and operations outlined in Council’s adopted Annual plan.
It will ensure that reasonable purchasing procedures have been followed in awarding contracts and will provide an efficient mechanism for documenting the approvals for those contracts.
Within a framework where contracts are an operational matter delegated to the Chief Executive, this Committee will consider all tenders beyond the Chief Executive’s financial delegations. The Chief Executive may refer contracts within his financial delegations which are sensitive or may impact on the reputation of the Council.
The Committee will have responsibility for:
· Awarding of contracts greater than $7.5 million; and
· Awarding of contracts less than $7.5 million which are sensitive or may impact on the reputation of the Council where the Chief Executive refers the matter to the Committee;
· Oversight over the tendering and procurement process and procedures of the Governing Body and local board; and
· Developing a tendering and procurement strategy as policy for recommendation to the Governing Body for adoption.
· From time to time the Committee may advise the Chief Executive and Council on changes to the Procurement and Contracts probity procedures.
All powers necessary to perform the Committee responsibilities.
(a) powers that the Governing Body cannot delegate or has retained to itself (see Governing Body responsibilities)
(b) where the Committee’s responsibility is limited to making a recommendation only
(c) where the Committee’s responsibility sets out financial limitations
Tenders and Procurement Committee
29 July 2014
ITEM TABLE OF CONTENTS PAGE
1 Apologies 5
2 Declaration of Interest 5
3 Confirmation of Minutes 5
4 Petitions 5
5 Public Input 5
6 Local Board Input 5
7 Extraordinary Business 5
8 Notices of Motion 6
9 Contract Renewal Approval – Professional Services for processing Resource Consents 7
10 Consideration of Extraordinary Items
At the close of the agenda no apologies had been received.
2 Declaration of Interest
Members are reminded of the need to be vigilant to stand aside from decision making when a conflict arises between their role as a member and any private or other external interest they might have.
3 Confirmation of Minutes
That the Tenders and Procurement Committee:
a) confirm the ordinary minutes of its meeting, held on Tuesday, 8 July 2014, including the confidential section, as a true and correct record.
At the close of the agenda no requests to present petitions had been received.
5 Public Input
Standing Order 3.21 provides for Public Input. Applications to speak must be made to the Committee Secretary, in writing, no later than two (2) working days prior to the meeting and must include the subject matter. The meeting Chairperson has the discretion to decline any application that does not meet the requirements of Standing Orders. A maximum of thirty (30) minutes is allocated to the period for public input with five (5) minutes speaking time for each speaker.
At the close of the agenda no requests for public input had been received.
6 Local Board Input
Standing Order 3.22 provides for Local Board Input. The Chairperson (or nominee of that Chairperson) is entitled to speak for up to five (5) minutes during this time. The Chairperson of the Local Board (or nominee of that Chairperson) shall wherever practical, give two (2) days notice of their wish to speak. The meeting Chairperson has the discretion to decline any application that does not meet the requirements of Standing Orders.
This right is in addition to the right under Standing Order 3.9.14 to speak to matters on the agenda.
At the close of the agenda no requests for local board input had been received.
7 Extraordinary Business
Section 46A(7) of the Local Government Official Information and Meetings Act 1987 (as amended) states:
“An item that is not on the agenda for a meeting may be dealt with at that meeting if-
(a) The local authority by resolution so decides; and
(b) The presiding member explains at the meeting, at a time when it is open to the public,-
(i) The reason why the item is not on the agenda; and
(ii) The reason why the discussion of the item cannot be delayed until a subsequent meeting.”
Section 46A(7A) of the Local Government Official Information and Meetings Act 1987 (as amended) states:
“Where an item is not on the agenda for a meeting,-
(a) That item may be discussed at that meeting if-
(i) That item is a minor matter relating to the general business of the local authority; and
(ii) the presiding member explains at the beginning of the meeting, at a time when it is open to the public, that the item will be discussed at the meeting; but
(b) no resolution, decision or recommendation may be made in respect of that item except to refer that item to a subsequent meeting of the local authority for further discussion.”
8 Notices of Motion
At the close of the agenda no requests for notices of motion had been received.
Tenders and Procurement Committee
29 July 2014
File No.: CP2014/15967
1. Resource consent applications are processed by the Resource Consents Department in Auckland Council’s Service Centres at Orewa, Takapuna, Henderson, Graham St, Manukau, Papakura and Pukekohe. Over 14,000 applications were processed in the last financial year. This number can fluctuate seasonally and in response to economic conditions.
2. To assist with consent processing a supplier panel of 93 ‘pre-qualified suppliers’ were engaged on an “as required” basis on the Auckland Council contract for the provision of professional and consulting services (Resource Consents) for an initial term of 24 months, from 1 September 2012 to 31 August 2014, with the option to renew the contract for a further 12 + 12 months at Council’s sole discretion. Approval was given on the basis that if the contracts are renewed, approval for renewal will be obtained, in accordance with the procurement process at the end of the initial contract period.
3. The supplier panel has been extensively used over the past two years and work for this panel is expected to increase substantially over the coming years with the increased pressure for new housing and commercial development. The consenting volumes have increased 30% over the last 2 years. There has also been an increase in development complexity which has required higher specialist consultant use. The increase in volume has increased the consultant spend from $7.7m to $8.5m.
That the Tenders and Procurement Committee agree that:
a) council exercise both renewal options available in the contract and renew the contracts for two years to 31 August 2016.
b) Business and Customer Support Manager, Business and Customer Support Resource Consents (Tier 4) are authorised to sign the individual renewal notices.
c) total approved value for the contracts for $7.7m per year is increased to $11m per year, based on the anticipated increase in demand.
4. Resource consent applications are processed by the Resource Consents Department in Auckland Council’s Service Centres at Orewa, Takapuna, Henderson, Graham St, Manukau, Papakura and Pukekohe. Over 14,000 applications were processed in the last financial year. This number can fluctuate seasonally and in response to economic conditions.
5. The Resource Management Act requires resource consent applications to be processed within set statutory timeframes. The following types of contractors, used by the Department, are covered by this procurement:
(i) Consultant planners are used when, due to fluctuations in the volume of consents received, there is no capacity internally to process the number of consents and other applications received within statutory timeframes.
(ii) Resource consent applications often require input from specialists. Where there is no expertise available internally, or where Council’s internal experts are unable to provide advice within the timeframes required, external specialists are contracted to provide those services. This includes compliance and monitoring where specialists are used when there are no staff available internally to undertake monitoring and ensure compliance with consent conditions.
6. Applicants for resource consents pay a fee for the services provided by Council based on a schedule of rates. Costs incurred by Auckland Council for processing resource consent applications, and provision of specialist reports, are almost fully recovered through the fees charged to applicants. There are some applications that may require processing externally or may require specialist input that Council is unable to on-charge applicants.
7. The rates charged to applicants under the Council’s schedule of fees and charges are fixed, so it is in the Council’s best interests to ensure that costs incurred in the processing of applications are as low as possible in order to recover all or most of the costs through application fees.
8. When awarding work to suppliers, Council will approach the supplier having the required skill, geographical preference and most competitive rates in the first instance. If this supplier is unavailable or lacks capacity to provide the services within Council’s timeframes, Council will approach the supplier having the next most competitive rates. Council will provide the supplier with a request to respond to a Scope of Engagement by way of a brief Proposal. If acceptable, Council will authorise the Proposal by counter-signing the Supplier’s Proposal.
9. The same suppliers are often contracted to prepare resource consent documents and reports for projects within Council’s operational business units. Any potential conflict of interest is managed through established processes within the Resource Consents department, to ensure the same consultant who may have prepared the application is not then engaged to process the application for approval.
10. An open fully competitive publically advertised procurement process was completed in 2012 for selection of the ‘pre-qualified suppliers’ for provision of Resource Consent Services. Responses were evaluated using the Weighted Attributes Methodology. Approval to engage the selected suppliers was received from the Tenders and Procurement Subcommittee on 17 August 2012, resolution number TP/2012/52.
11. Renewal of these contracts was anticipated, as outlined in the original recommendation report dated 23/7/2012. There has been a steady increase in the number of resource consents lodged, with our year to date activity currently 21% higher than the same time last year and 30% higher than 2 years prior. We forecast this increase to continue over the next 12 months. As a result, our use of consultants to assist with consent processing has continued to increase. Due to the continued and ever increasing requirement for these services, it is considered more efficient to exercise both renewal options under the contracts at one time, rather than seek approval for the second renewal option in a year’s time.
12. The key non-financial benefits of this proposal are:
· resource consent teams in the Council’s service centres will continue to have a list of potential suppliers for resource consent related services to call on when, due to fluctuations in the volume of consents received, there is no capacity internally to process the numbers of consents and other applications received within statutory timeframes;
· performance standards and quality can continue to be monitored through contracted key performance indicators.
13. Financial benefits of this proposal are:
· competitive rates will continue to be achieved through continuing to contract suppliers on the approved Supplier Panel at approved hourly rates.
Significance of Decision
14. If we do not continue to use consultants to assist with the processing of resource consents, we will not be able to meet our statutory timeframes set under The Resource Management Act, which will in turn cause delays, costs and frustrations to our customers. The Resource Management Act requires council to provide for a discount on processing fees of 1 per cent per day, up to a maximum of 50 working days for all resource consent applications not processed within timeframes.
15. Consultation and review has taken place with the Resource Consent teams to ensure that their requirements for expertise in local district plans and specialist services is covered. No external consultation is required for this procurement.
Local board views and implications
16. While Local Boards are able to have input into decisions relating to whether resource consent applications are notified, this procurement does not impact on that process or Local Boards in general in any way.
Maori impact statement
17. This procurement does not result in any significant decisions for Maori as it relates to the establishment of a supplier panel of consultants and specialists used to assist Council in the processing of applications only. Where Tangata Whenua input into an application is needed, any external consultants or specialists engaged by Council will be required to seek that input from the appropriate parties in the same way as a planner or specialist employed by the Council would.
Financial and Resourcing Implications
18. Since 1 July 2012, the Department has spent approximately $16 million on consultant and specialist services. Most of these costs are recoverable as these costs are passed on to applicants, either at the Council’s charge-out rate (in the case of consultant planners), or at the specialist’s hourly rate where specialist input has been required. This procurement does not commit the Council to any expenditure, any contractual arrangements put in place will be on an as and when required basis.
Legal and Legislative Implications
19. The framework agreement is structured around the standard council services professional services (long form) contract. Individual work under the contract will be commissioned on an “as required” basis through a Scope of Engagement requiring the supplier to provide information on price and resources. Suppliers will be issued a renewal notice in accordance with the contract terms, once the recommendations have been approved.
20. Subject to the approval of the Tenders and Procurement Sub-Committee on 29 July 2014, renewal letters will be issued to those who are currently members of the supplier panel, extending their contracts to 31 August 2016.
Contract Renewal Approval Form
Kevin Smith - Manager Business and Customer Support
Terese Marsh - Service Improvement Advisor, Business and Customer Support Resource Consents Team
Heather Harris - Manager Resource Consents
Peter Blackwell - Manager, Procurement