Agenda of Strategic Procurement Committee

I hereby give notice that an ordinary meeting of the Strategic Procurement Committee will be held on:

Date:

Time:

Meeting Room:

Venue:

Wednesday, 7 March 2018

9.30am

Room 1, Level 26
135 Albert Street
Auckland

Komiti Mahi Āta Torotoro Rawa

Strategic Procurement Committee

OPEN AGENDA

MEMBERSHIP

Chairperson	Deput Mayor Bill Cashmore
Deputy Chairperson	Cr Ross Clow
Members	Cr Dr Cathy Casey
	Cr Linda Cooper, JP
	Cr Alf Filipaina
	Cr Penny Hulse
	Cr Daniel Newman, JP
	Cr Greg Sayers
Ex-officio	Mayor Hon Phil Goff, CNZM, JP

(Quorum 5 members)

Michelle Judge

Governance Advisor

2 March 2018

Contact Telephone: 890 8022

Email: sonja.tomovska@aucklandcouncil.govt.nz

Website: www.aucklandcouncil.govt.nz

Terms of Reference

Responsibilities

The committee is established to assist the chief executive to undertake the management procedure of ensuring sound procurement processes are followed in relation to procurement of goods and services necessary to deliver on the work programme and operations outlined in the 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 contracts 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 chief executive has power to award contracts up to $20 million alone and the power to award contracts up to $22.5 million jointly with the mayor and Finance and Performance Committee chair.

The committee will have responsibility for:

· awarding of contracts of $22.5 million or greater

· awarding of contracts less than $22.5 million which are sensitive or may impact on the reputation of the council if the chief executive refers the matter to the committee

· oversight over the procurement processes and procedures.

From time to time the committee may advise the chief executive and council on changes to the procurement and contracts probity procedures.

Powers

All powers necessary to perform the committee’s responsibilities.

Except:

(a) powers that the Governing Body cannot delegate or has retained to itself (section 2)

(b) where the committee’s responsibility is limited to making a recommendation only

Exclusion of the public – who needs to leave the meeting

Members of the public

All members of the public must leave the meeting when the public are excluded unless a resolution is passed permitting a person to remain because their knowledge will assist the meeting.

Those who are not members of the public

General principles

· Access to confidential information is managed on a “need to know” basis where access to the information is required in order for a person to perform their role.

· Those who are not members of the meeting (see list below) must leave unless it is necessary for them to remain and hear the debate in order to perform their role.

· Those who need to be present for one confidential item can remain only for that item and must leave the room for any other confidential items.

· In any case of doubt, the ruling of the chairperson is final.

Members of the meeting

· The members of the meeting remain (all Governing Body members if the meeting is a Governing Body meeting; all members of the committee if the meeting is a committee meeting).

· However, standing orders require that a councillor who has a pecuniary conflict of interest leave the room.

· All councillors have the right to attend any meeting of a committee and councillors who are not members of a committee may remain, subject to any limitations in standing orders.

Independent Māori Statutory Board

· Members of the Independent Māori Statutory Board who are appointed members of the committee remain.

· Independent Māori Statutory Board members and staff remain if this is necessary in order for them to perform their role.

Staff

· All staff supporting the meeting (administrative, senior management) remain.

· Other staff who need to because of their role may remain.

Local Board members

· Local Board members who need to hear the matter being discussed in order to perform their role may remain. This will usually be if the matter affects, or is relevant to, a particular Local Board area.

Council Controlled Organisations

· Representatives of a Council Controlled Organisation can remain only if required to for discussion of a matter relevant to the Council Controlled Organisation.

Strategic Procurement Committee

07 March 2018

ITEM TABLE OF CONTENTS PAGE

1 Apologies 7

2 Declaration of Interest 7

3 Confirmation of Minutes 7

4 Petitions 7

5 Public Input 7

6 Local Board Input 7

7 Extraordinary Business 7

8 Notices of Motion 8

9 Information report: Group Source Procurement update 9

10 Information report: Fleet update 13

11 Update on Capital Projects over $5 million 15

12 ICT Hardware Procurement Strategy 17

13 Information report – 7 March 2018 19

14 Consideration of Extraordinary Items

PUBLIC EXCLUDED

15 Procedural Motion to Exclude the Public 27

C1 ICT Hardware Procurement Strategy 27

C2 Update on Capital Projects over $5 million 27

1 Apologies

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 Strategic Procurement Committee:

a) confirm the ordinary minutes of its meeting, held on Wednesday, 13 December 2017, including the confidential section, as a true and correct record.

4 Petitions

At the close of the agenda no requests to present petitions had been received.

5 Public Input

Standing Order 7.7 provides for Public Input. Applications to speak must be made to the Governance Advisor, in writing, no later than one (1) clear working day 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 6.2 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 one (1) day’s 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 6.1 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

There were no notices of motion.

Strategic Procurement Committee

07 March 2018

Information report: Group Source Procurement update

File No.: CP2018/02209

Te take mō te pūrongo / Purpose of the report

1. To provide an update to the Strategic Procurement Committee on Group Source Procurement.

Whakarāpopototanga matua / Executive summary

2. This information report aims to provide public visibility of information circulated to committee members, no decisions are required.

FY 17/18 (July 2017 – January 2018) overview:

· We have confirmed a total $40.8M of procurement benefits across the Group to the end of January 2018, see attachment A for more detail.

· Notable procurement activity during this period includes Electricity supply (all three organisations involved) and Legal (Auckland Council established Panel with syndication clauses providing the option to the CCOs in the future)

· Programme highlight: Group Sustainable Procurement Framework endorsed at the Strategic Procurement Committee on 13 December 2017.

Ngā tūtohunga / Recommendation/s

That the Strategic Procurement Committee:

a) receive the information report

Ngā tāpirihanga / Attachments

No.	Title	Page
a ⇩	Group Source Procurement FY18 results	11

Ngā kaihaina / Signatories

Author	Josie Robinson - Procurement Communications and Support Advisor
Authoriser	Jazz Singh - General Manager Procurement

Strategic Procurement Committee

07 March 2018

Information report: Fleet update

File No.: CP2018/02212

Te take mō te pūrongo / Purpose of the report

1. To update the Strategic Procurement Committee on the progress of optimising Auckland Council’s fleet.

Whakarāpopototanga matua / Executive summary

2. Procurement is progressing plans to optimise the efficiency of Auckland Councils fleet.

3. In the first half of FY18 we reduced the size of Auckland Council’s fleet by 16 vehicles – generating $247k in revenue from auction sales.

4. We avoided purchasing 13 new vehicles through redeployment of existing fleet vehicles, resulting in a cost saving of $325k. This avoidance cost includes not only the price of new vehicles but also the Custom Fleet management fee and the telematics unit (including installation and ongoing monthly software update).

5. The number of general pool vehicle bookings decreased from 2,730 in November 2017 to 2,372 in January 2018 even though there has been an increase in the number of registered users of the PoolCar booking tool from 2,368 to 2784 in the same period.

6. Between November 2017 to January 2018 there has been a 2% reduction in overnight bookings. This suggests the increased controls over approvals for taking general pool vehicles home overnight is delivering positive results and will contribute to a reduction in Fringe Benefit Tax payments.

7. As a result of the project to remove operational pools and re-allocate those vehicles to either the general vehicle pool or dedicated vehicles, the general vehicle pool will almost double in size from 116 vehicles to approximately 224 vehicles. Exact numbers are still being finalised with business units. The efficiencies described above can be expected to increase in correlation with the greater number of general pool vehicles available.

8. This project will also see 200 vehicles become dedicated to specific roles rather than being part of a ‘pool’ allocated to a business unit.

9. All of the vehicles in the fleet are now being monitored for utilisation with under-utilised vehicles reviewed every 6 months for possible disposal or reallocation.

10. We are currently working with Auckland Transport to create a business case to support 10% of our passenger car fleet (approximately 50 vehicles) being replaced with full Electric or Plug-In Hybrid vehicles over the next three years.

Ngā tūtohunga / Recommendation/s

That the Strategic Procurement Committee:

a) receive this information report

Ngā tāpirihanga / Attachments

There are no attachments for this report.

Ngā kaihaina / Signatories

Author	Paula Nicolini - Procurement Manager
Authoriser	Jazz Singh - General Manager Procurement

Strategic Procurement Committee

07 March 2018

Update on Capital Projects over $5 million

File No.: CP2018/02348

Te take mō te pūrongo / Purpose of the report

1. To receive the update summary of currently agreed capital projects with a budget of over $5 million as previously reported at the Strategic Procurement Committee at its meeting on 13 December 2017.

Whakarāpopototanga matua / Executive summary

2. This report provides a progress update on all currently agreed capital projects with a budget of over $5 million.

3. Projects are briefly described, including what stage the project is at in its lifecycle, whether the projects are currently under or over budget, and expected completion dates noting any delays.

4. As per the request of this committee at the 13 December 2017 meeting, the report now contains details on the objectives/scope of the project, local board area, project phase and specific project commentary

5. Staff will keep the capital project report updated and report this to the Strategic Procurement Committee on a quarterly basis.

6. The FY18 budget for the 48 (over $5 million) projects included in the report totals. More information can be found in the confidential report attachment.

7. The data in this report was first prepared for the Finance and Performance Committee quarterly report which includes data up to 31 January 2018.

Ngā tūtohunga / Recommendation/s

That the Strategic Procurement Committee:

a) note the information contained in this report, on the updated summary of currently agreed capital projects, enables transparency on the topic due for discussion in the public excluded part of the meeting.

b) note that the confidential report contains information that could prejudice council's position with suppliers.

Horopaki / Context

1. As part of usual council project management process, all capital projects are updated monthly using the council’s Sentient project management system. The up to date project details are then used to compile the quarterly update on projects over $5m that is subsequently presented to the Strategic Procurement committee.

· The details included in the report are as follows:

· Project ID, Project Name and Project Objectives

· Portfolio Department (e.g. Healthy Waters, Community Facilities, etc.)

· Local Board Area

· Current project phase of the project (e.g. concept, planning, execution & delivery, etc.)

· Estimated start and finish dates

· SPI calculation (Schedule Performance Index – a forecast whether the project will be completed ahead or behind schedule)

· CPI calculation (Cost Performance Index – a forecast whether the project will be completed under or over the current project budget)

· % of project completion

· Total project budget

· Total project actuals

· Total project forecast

· Commentary

2. The report has a traffic light system which is detailed below:

· Green = on time and on budget (SPI or CPI equal to 1 in the attached report indicates that the project is on budget and on schedule)

· Amber = slightly above budget and/or slightly behind schedule.

· Red = over budget and behind schedule

· Grey = project commencing – insufficient data to calculate SPI or CPI

3. The report will provide project reporting and commentary from the project manager on all projects

4. The reports are being compiled by the council’s Strategic Portfolio and Programme Office (SPPO) and the quarterly report will be delivered by the Head of the SPPO, Ramari Slattery.

Tātaritanga me ngā tohutohu / Analysis and advice

8. Commentary regarding project progress is provided in the report. However, should committee members require additional clarification or details, council staff will seek to provide additional details and clarification in a timely manner.

Ngā raru tūpono / Risks

9. Risks are reported in the attached report. Projects categorised as red or amber may indicate a risk that these projects could potentially run over budget and/or be delivered behind schedule.

Ngā koringa ā-muri / Next steps

10. The next report will be provided at the June 2018 Strategic Procurement Committee meeting.

Ngā tāpirihanga / Attachments

11. There are no attachments for this report.

Ngā kaihaina / Signatories

Author	Peter Cunningham - Head of Physical Works & Technical Services Procurement
Authoriser	Jazz Singh - General Manager Procurement

Strategic Procurement Committee

07 March 2018

ICT Hardware Procurement Strategy

File No.: CP2018/02366

Te take mō te pūrongo / Purpose of the report

1. To provide governance visibility and to seek endorsement for the Auckland Council category strategy for Information and Communication Technology (ICT) Hardware.

Whakarāpopototanga matua / Executive summary

2. Council purchases ICT Hardware in three main areas - Peripherals, Computer and Mobile Hardware and Network and Unified Communications Hardware. A fourth area (Data Centre Hardware) currently uses the Revera Infrastructure as a Service (IaaS) for the majority of council’s server infrastructure.

3. Council has a constant requirement for purchasing in this category, as it replaces equipment that has reached end of life.

4. Over the past four years, council has moved from working with a small number of suppliers in a non-competitive way, to taking most of its hardware purchasing through a closed Request for Quote (RFQ) process with appropriately qualified resellers under the All of Government (AoG) agreement.

5. Although using the AoG agreement has reduced upfront hardware purchase costs to council, but is showing diminishing returns due to high overhead and inefficient use of staff time required.

6. Council believes there is a more efficient way of using the AoG agreement to delivery further savings.

7. Further information is provided in the report on the confidential agenda of this meeting regarding how we propose to approach ICT hardware procurement.

Ngā tūtohunga / Recommendation/s

That the Strategic Procurement Committee:

a) note the information in this report enables transparency on the ICT Hardware Procurement Strategy due for discussion in the public excluded part of the meeting.

b) note that confidential report contains information which if released would have negative impact on council’s ability to deliver the best value for the ratepayers.

Horopaki / Context

8. Further context on the ICT Hardware Procurement Strategy is provided in the confidential report.

Tātaritanga me ngā tohutohu / Analysis and advice

9. Further analysis and advice on the ICT Hardware Procurement Strategy is provided in the confidential report.

Ngā whakaaweawe ā-rohe me ngā tirohanga a te poari ā-rohe /
Local impacts and local board views

10. The approach to ICT Hardware Procurement Strategy will allow Council to work with local board members and other elected members to ensure they receive ICT Hardware that best meets their needs.

Tauākī whakaaweawe Māori / Māori impact statement

11. There are no Māori impacts associated with this category strategy.

Ngā ritenga ā-pūtea / Financial implications

12. The spend in these categories are currently budgeted for. The proposed approaches will allow us to make best use of our size and scale to deliver as much value for money as possible.

Ngā raru tūpono / Risks

13. There are no significant risks.

Ngā koringa ā-muri / Next steps

14. Market sounding and supplier briefing sessions will be undertaken to prepare the market to ensure resource availability and market readiness.

Ngā tāpirihanga / Attachments

15. There are no attachments for this report.

Ngā kaihaina / Signatories

Author	Aaron Donaldson - ICT Commercial Lead
Authoriser	Jazz Singh - General Manager Procurement

Strategic Procurement Committee

07 March 2018

Information report – 7 March 2018

File No.: CP2018/02549

Te take mō te pūrongo / Purpose of the report

1. To note progress on the forward work programme (Attachment A).

Whakarāpopototanga matua / Executive summary

2. This is regular information-only report which aims to provide public visibility of information circulated to committee members via memo or other means, where no decisions are required.

3. Note that, unlike an agenda decision report, staff will not be present to answer questions about these items referred to in this summary.

Ngā tūtohunga / Recommendation/s

That the Strategic Procurement Committee:

a) receive the information report – 7 March 2018.

Ngā tāpirihanga / Attachments

No.	Title	Page
a ⇩	Information report – 7 March 2018	21

Ngā kaihaina / Signatories

Author	Sonja Tomovska - Governance Advisor
Authoriser	Jazz Singh - General Manager Procurement

Strategic Procurement Committee

07 March 2018

Exclusion of the Public: Local Government Official Information and Meetings Act 1987

That the Strategic Procurement Committee:

a) exclude the public from the following part(s) of the proceedings of this meeting.

The general subject of each matter to be considered while the public is excluded, the reason for passing this resolution in relation to each matter, and the specific grounds under section 48(1) of the Local Government Official Information and Meetings Act 1987 for the passing of this resolution follows.

This resolution is made in reliance on section 48(1)(a) of the Local Government Official Information and Meetings Act 1987 and the particular interest or interests protected by section 6 or section 7 of that Act which would be prejudiced by the holding of the whole or relevant part of the proceedings of the meeting in public, as follows:

C1 ICT Hardware Procurement Strategy

Reason for passing this resolution in relation to each matter

Particular interest(s) protected (where applicable)

Ground(s) under section 48(1) for the passing of this resolution

The public conduct of the part of the meeting would be likely to result in the disclosure of information for which good reason for withholding exists under section 7.

s7(2)(h) - The withholding of the information is necessary to enable the local authority to carry out, without prejudice or disadvantage, commercial activities.

In particular, the report contains information about how we will approach and negotiate with the market. Releasing this information would negative impact our ability to deliver the best value for the ratepayers.

s48(1)(a)

The public conduct of the part of the meeting would be likely to result in the disclosure of information for which good reason for withholding exists under section 7.

C2 Update on Capital Projects over $5 million

Reason for passing this resolution in relation to each matter

Particular interest(s) protected (where applicable)

Ground(s) under section 48(1) for the passing of this resolution

The public conduct of the part of the meeting would be likely to result in the disclosure of information for which good reason for withholding exists under section 7.

s7(2)(h) - The withholding of the information is necessary to enable the local authority to carry out, without prejudice or disadvantage, commercial activities.

In particular, the report contains information that could prejudice council's position with suppliers.

s48(1)(a)

The public conduct of the part of the meeting would be likely to result in the disclosure of information for which good reason for withholding exists under section 7.