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, 4 April 2018

9.30am

Room 1, Level 26
135 Albert Street
Auckland

Komiti Mahi Āta Torotoro Rawa

Strategic Procurement Committee

OPEN AGENDA

MEMBERSHIP

Chairperson	Deputy Mayor Cr 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

Ex-officio	Mayor Hon Phil Goff, CNZM, JP

(Quorum 5 members)

Michelle Judge

Governance Advisor

28 March 2018

Contact Telephone: 977 6739

Email: michelle.judge@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

04 April 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 All of Government Recruitment Renewal 9

10 Procurement plan for overflow planning services. 11

11 Auckland Council Infrastructure as a Service 15

12 Information report – 4 April 2018 17

13 Consideration of Extraordinary Items

PUBLIC EXCLUDED

14 Procedural Motion to Exclude the Public 27

C1 CONFIDENTIAL: All of Goverment Recruitment Renewal 27

C2 CONFIDENTIAL: Procurement Plan for Overflow Planning Services 27

C3 CONFIDENTIAL: Auckland Council Infrastructure as a Service (Covering report) 28

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, 7 March 2018, 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

04 April 2018

All of Government Recruitment Renewal

File No.: CP2018/04092

Te take mō te pūrongo / Purpose of the report

1. To approve the proposed procurement approach for the delivery of external recruitment services to Auckland Council.

Whakarāpopototanga matua / Executive summary

2. Auckland Council has an in-house recruitment team that manages the recruitment requirements for the majority of its permanent employees (99% of employee hires).

3. There remains a need for external recruitment agency suppliers to provide a contingent workforce (contractors and temporary staff) for the council. Additional services include recruitment agencies assisting in recruiting any specialised needs for permanent placement.

4. The council is currently a party to an agreement with the Ministry of Business Innovation and Employment under the All of Government External Services supply panel (the AoG Agreement).

5. The council has reviewed its approach to procuring external recruitment services. Further detail is provided in the confidential report in this agenda.

Ngā tūtohunga / Recommendation/s

That the Strategic Procurement Committee:

a) note the information in this report enables transparency for external recruitment services due for discussion and approval in the public excluded part of the meeting.

b) note that the confidential report contains commercially sensitive information.

Horopaki / Context

6. As above, the council’s in-house recruitment team manages the recruitment requirements for the majority of its permanent employees (99% of employee hires). However there remains a need for external recruitment agencies to provide a contingent workforce for the council and assisting to recruit with specialised needs.

7. The council is currently a party to the AOG Agreement.

Tātaritanga me ngā tohutohu / Analysis and advice

8. Further discussion is set out in the confidential report.

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

9. The recommendations made in this report are not considered to have any specific impacts on local boards.

Tauākī whakaaweawe Māori / Māori impact statement

10. The supply panel under the AOG Agreement includes a specialist agency that focuses on Maori and Pacifika communities’ roles. All primary agency providers on the supply panel have been briefed on the council’s Maori responsiveness framework and their role in supporting this.

Ngā koringa ā-muri / Next steps

11. The confidential report sets out further details.

Ngā tāpirihanga / Attachments

There are no attachments for this report.

Ngā kaihaina / Signatories

Author

Mathew Lucas - Procurement Manager

Authorisers

Aaron Donaldson - ICT Commercial Lead

Emma Murphy - Head of Recruitment and Talent

Patricia Reade - Director People and Performance

Jazz Singh - General Manager Procurement

Strategic Procurement Committee

04 April 2018

Procurement plan for overflow planning services.

File No.: CP2018/04163

Te take mō te pūrongo / Purpose of the report

To seek approval from the Strategic Procurement Committee for the procurement plan for overflow planning services to process resource consents.

Whakarāpopototanga matua / Executive summary

1. Following an open and competitive tender in 2012, Auckland Council set up a panel of suppliers to manage overflow planning services. Specifically, council uses consultant planners from several suppliers to process a proportion of resource consent applications.

2. Since it was set up, the panel has grown from 47 to 76 suppliers. This presents an opportunity to ensure efficient management of outsourced planning services.

3. The current contracts will expire on 30 June 2018. We propose going to tender for new contracts, inviting potential suppliers to submit proposals through a competitive and open market tender process. Suppliers will be pre-qualified to provide overflow planning services on an as needed basis and engaged through standard council framework agreements.

4. This procurement will result in the following benefits for council:

· Business continuity – a sufficient number of consultant planners will be available to ensure the department meets its targets for timely processing of resource consent applications.

· Value for money – negotiated rates with a selected number of high-performing key suppliers will ensure best value for ratepayers. The cost of outsourced services are generally recovered through resource consent application fees.

· Risk mitigation – all services will be performed under an approved Auckland Council contract and appropriate insurance terms and conditions. A consistent supplier performance management framework will enable region-wide control over the quality and cost of the services provided.

· Rationalisation of the supplier base – the number of contracts will be limited to actual business needs to support streamlined and efficient contract administration.

Ngā tūtohunga / Recommendation/s

That the Strategic Procurement Committee:

a) note the information in this report enables transparency for overflow planning services due for discussion and approval 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

Background

5. The Resource Consents department’s mandate is to deliver consenting services which are consistent, easy to use and provide quality outcomes for Auckland’s customers, and for the environment.

6. Auckland Council’s Service Centres process approximately 17,000 resource consent applications annually. This number can fluctuate seasonally and in response to economic conditions.

Current progress

7. The Resource Consents department is establishing a working group of team leaders and managers experienced in managing external consultants. The objectives of the working group will be to:

· Review the current process for outsourcing planning services, to ensure efficient and cost-effective use of consultant planners across the department.

· Support this procurement process, including evaluation, shortlisting of suppliers and contract negotiations.

· Oversee the management of the panel with the support of the Procurement department, including continuous improvement and supplier performance management.

8. The proposed procurement and establishment of the panel is in line with the procurement category strategy for technical services approved in July 2015 by the Tenders and Procurement Committee. The strategy recommends using a panel approach to procure technical services such as planning, including:

· An established forward work programme shared with suppliers

· Segmentation of the forward work programme – resource matching

· More effective planning and resourcing of projects

· Pre-qualification of suppliers to the panels

· Reduced transaction costs – transferred to tender responses

· A focus on performance measurement, continuous improvement and innovation

Tātaritanga me ngā tohutohu / Analysis and advice

9. The Resource Consents department uses external suppliers to process of resource consent applications, when the department is unable to complete this work within the statutory timeframes required by the Resource Management Act.

10. The 76 existing contracts are scheduled to expire at the end of the current financial year, on 30 June 2018. The following options have been explored:

11. Provide all services in-house once the contracts expire. This option is not feasible in the short term, as the department does not have the capacity to process all resource consent applications within the statutory timeframe. The department aims to keep outsourced services to a maximum of 20% of applications. Processing all applications in-house will require additional full-time equivalent employees to ensure council is able to respond to seasonal increases in applications and meet its target of 100% consents processed within statutory timeframes.

12. Extend the existing contracts. This option is not recommended, because opportunities for better value for money and improved service delivery will be missed. For example, new suppliers have emerged, who may be able to provide better value for money than the current suppliers. The capacity of suppliers currently under contract may have increased, allowing us to consolidate outsourced services under a fewer number of contracts.

13. Agree new contracts following a competitive tender process. This is the recommended option, as it will deliver better value for money, make our size work by rationalising our supplier base and support improved service delivery to customers.

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

14. Local boards can have input into decisions relating to whether resource consent applications are notified and open for public submissions. The department manages the outsourced services for processing resource consent applications to ensure that applicants receive seamless service delivery, whether delivered in-house or by consultant planners.

15. The proposed procurement process will ensure that pre-qualified suppliers have the required knowledge and experience to engage with local boards.

Tauākī whakaaweawe Māori / Māori impact statement

16. Planning services can impact Māori, for example when they involve sites of significance. Consultation with mana whenua is often required during the resource consent application process. Suppliers will be required to demonstrate their ability to engage with mana whenua and value Te Ao Māori principles.

Ngā ritenga ā-pūtea / Financial implications

17. Individual scopes of engagement will be agreed with suppliers based on their availability and capability.

18. The cost of most outsourced services will be recoverable from applicants who pay a fee for resource consent applications, based on council’s schedule of rates. However, where outsourced services are required to defend an appeal against a resource consent decision then council is unlikely to cover full costs of those services.

Ngā raru tūpono / Risks

19. There are no significant risks associated with the proposed procurement approach.

20. Maintaining the status quo by extending the current contracts will potentially increase council’s reputational risk. Suppliers may perceive council as not providing fair and equal contract opportunity.

21. Outsourced services for processing resource consents are critical, to ensure council meets its performance measurement of 100% of resource consent applications processed within statutory timeframes.

Ngā koringa ā-muri / Next steps

22. We plan an open market tender in April 2018. The Request for Proposal will be advertised publicly on the New Zealand Government Electronic Tenders Services (GETS).

23. Contract negotiations will follow with shortlisted suppliers in May 2018.

24. Approval for the award of contracts to the pre-qualified suppliers will be sought from the Strategic Procurement Committee in June 2018.

25. New contracts will be in place by July 2018 for an initial term of two years, with renewal options up to a total of six years, subject to performance and further approval.

26. Supplier performance will determine how work is allocated among the panel. Council will ensure value for money by maximising the capacity of high performing consultants and drive continuous improvement through the panel.

Ngā tāpirihanga / Attachments

There are no attachments for this report.

Ngā kaihaina / Signatories

Author

Vesselina Petkova – Strategic Procurement Specialist

Authorisers

Ian Smallburn - General Manager Resource Consents

Penny Pirrit - Director Regulatory Services

Jazz Singh - General Manager Procurement

Strategic Procurement Committee

04 April 2018

Auckland Council Infrastructure as a Service

File No.: CP2018/04185

Te take mō te pūrongo / Purpose of the report

1. To seek approval from the Strategic Procurement Committee for the proposed approach to Auckland Council’s data centre services.

Whakarāpopototanga matua / Executive summary

2. Since 2013 Auckland Council has purchased data centre services from Revera Ltd (Revera) via the All of Government (AoG) Infrastructure as a Service (IaaS) agreement managed by the Department of Internal Affairs (DIA).

3. In the last five years the market has shifted significantly with growing options for the provision of data centre services. Council have reviewed their current IaaS model with the market and believe the current model is too costly and restrictive in meeting the needs of council.

4. Council is proposing to a move to a new hybrid cloud model in which we use the following data centre services:

5. The confidential report will set out how Auckland Council proposes to implement the hybrid cloud model.

Ngā tūtohunga / Recommendation/s

That the Strategic Procurement Committee:

a) note the information in this report enables transparency for data centre services due for discussion and approval 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

6. In 2013 council migrated off 16 physical data centre infrastructure locations to Revera via the AoG IaaS agreement managed by the DIA.

7. Risk was the primary driver for moving to AoG IaaS. The benefit of this transition was:

a. Moving out of the Greys Avenue data centre;

b. Decommissioning 60% of the server fleet;

c. Moving to a completely known landscape; and

d. Moving to a more stable provision of service.

8. This is an agreement construct developed by DIA to provide all government agencies with IaaS services. Council is not mandated to use this service but can sign up as an eligible agency. The pricing is based on a consumption model with a catalogue of services and applicable pricing. Pricing is applied at the same rate for all organisations irrespective of scale.

9. Council has worked hard to right size its environment and therefore reduce its consumption in order to drive down cost as much as possible.

10. In the five years since Council joined up to the AoG IaaS agreement the technology has moved significantly in both choice and cost. This has presented council with an opportunity explore other options and has led to a proposal to move to a hybrid cloud model.

11. The primary drivers for a hybrid cloud model is to provide council with lower costs, more control and increased choice in service provision.

Tātaritanga me ngā tohutohu / Analysis and advice

12. Further detail is provided for in the confidential report.

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

13. There are no impacts on local boards.

Tauākī whakaaweawe Māori / Māori impact statement

14. There are no impacts on Maori.

Ngā ritenga ā-pūtea / Financial implications

15. The proposal will provide significant savings to Auckland Council.

Ngā raru tūpono / Risks

16. Further details will be provided in the confidential report

Ngā koringa ā-muri / Next steps

17. Further details will be provided in the confidential report.

Ngā tāpirihanga / Attachments

There are no attachments for this report.

Ngā kaihaina / Signatories

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

Strategic Procurement Committee

04 April 2018

Information report – 4 April 2018

File No.: CP2018/04275

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 – 4 April 2018.

Ngā tāpirihanga / Attachments

No.	Title	Page
a ⇩	Strategic Procurement Committee Forward Work Programme 4 April 2018	19

Ngā kaihaina / Signatories

Author	Michelle Judge - Governance Advisor
Authoriser	Jazz Singh - General Manager Procurement

Strategic Procurement Committee

04 April 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 CONFIDENTIAL: All of Goverment Recruitment Renewal

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 comercially sensitive information.

s7(2)(i) - The withholding of the information is necessary to enable the local authority to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations).

In particular, the report contains comercially sensitive information.

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 CONFIDENTIAL: Procurement Plan for Overflow Planning Services

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)(b)(i) - The withholding of the information is necessary to protect information where the making available of the information would disclose a trade secret.

In particular, the report contains information about council’s strategy for procuring Auckland’s overflow services. If released council’s position with suppliers may be prejudiced.

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 council’s strategy for procuring Auckland’s overflow services. If released council’s position with suppliers may be prejudiced.

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.

C3 CONFIDENTIAL: Auckland Council Infrastructure as a Service (Covering report)

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 council's proposed approach to directly negotiate with an incumbent supplier. Release of this information would impact on council's ability to effectively negotiate.

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.