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 August 2019

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 4 members)

Duncan Glasgow

Governance Advisor

1 August 2019

Contact Telephone: +64 21 579 761

Email: duncan.glasgow@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 August 2019

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 8

8 Update on the procurement plan for Corban Reserve Stormwater Upgrade - Stage one 9

9 Te Manawa multipurpose facility at Westgate (integrated library and community centre) construction: final status report 13

10 $5M Capital Projects Update 17

11 Group Source Procurement update 2018-2019 21

12 Summary of Strategic Procurement Committee information memoranda and briefings, including the Forward Work Programme - 7 August 2019 27

13 Consideration of Extraordinary Items

PUBLIC EXCLUDED

14 Procedural Motion to Exclude the Public 39

C1 CONFIDENTIAL: Approval of the procurement plan for Corban Reserve Stormwater Upgrade - Stage one 39

C2 CONFIDENTIAL: Te Manawa multipurpose facility at Westgate (integrated library and community centre) construction: final status report 39

C3 CONFIDENTIAL - $5M Capital Projects Update 40

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 Thursday, 6 June 2019, 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.”

Strategic Procurement Committee

07 August 2019

Update on the procurement plan for Corban Reserve Stormwater Upgrade - Stage one

File No.: CP2019/13645

Te take mō te pūrongo

Purpose of the report

1. To note an update on the procurement plan for stage one of the physical works for the Corban Reserve stormwater upgrade project.

Whakarāpopototanga matua

Executive summary

2. The Corban Reserve stormwater upgrade project is required to eliminate a known health and safety risk.

3. This project has been commissioned and designed to safeguard public health and safety through elimination of methane and leachate infiltration from the closed landfill into the existing public stormwater network.

4. The project will also alleviate flooding risk and provide for the future growth of the upstream catchment. Water quality of the Opanuku Stream is also anticipated to improve following the elimination of leachate discharge through the stormwater network.

5. The project is structured into three stages. Stage one consists of the construction of a stormwater pipe along Border Road to the Opanuku Stream to divert the stormwater network away from the Corban Reserve closed landfill. Stage two will decommission the existing stormwater pipe underneath Corban Reserve. Stage three will upgrade part of the local stormwater network along Henderson Valley Road.

6. More details on the procurement plan for stage one of the Corban Reserve stormwater upgrade will be provided in the confidential section of the 7 August 2019 Strategic Procurement Committee meeting.

Ngā tūtohunga

Recommendations

That the Strategic Procurement Committee:

a) note the information contained in this report on the procurement plan for stage one of the Corban Reserve stormwater upgrade project, enables transparency on the topic due for discussion in the public excluded part of the meeting

b) note that the confidential report contains commercially sensitive information relating to the procurement of the proposed works for the stormwater upgrade could prejudice council's position in negotiations with suppliers.

Horopaki

Context

7. A stormwater pipe that runs through a closed landfill in Corban Reserve has been identified as posing an on-going health and safety risk to the public and council staff, due to the presence of landfill gases.

8. Monitoring shows that the pipe is collecting methane gas from the closed landfill at levels which are potentially explosive if ignited. A methane explosion during stormwater upgrade works at the site in 1996 resulted in a fatality.

9. Leachate from the closed landfill is also infiltrating into the stormwater pipe, resulting in elevated heavy metals and levels of ammoniacal nitrate being discharged to the Opanuku Stream.

10. In addition, flooding of residential properties upstream of the pipe is frequent due to existing downstream capacity constraints and debris blocking the inlet to the stormwater pipe. The creation of the landfill has also resulted in an embankment, blocking the natural overland flow path and flooding properties. Flooding of upstream residential properties is currently reported up to five times per year and 21 properties are at risk of flooding in a 1 per cent annual exceedance probability storm event.

11. Council is managing these risks in the short-term through various measures, such as close monitoring of the landfill site and the use of a ventilation system in Corban Reserve to safely disperse gases over reserve land. However, a more permanent solution is needed.

12. Analysis conducted by council staff indicates that construction of a new stormwater pipeline and decommissioning the piped section through the closed landfill is the only way to effectively eliminate these risks.

13. Auckland Council is progressing the delivery of this stormwater upgrade project which will be undertaken in three stages. Stage one of the Corban Reserve stormwater upgrade project is to divert stormwater flows from the 120-hectare Waitaro Stream catchment away from the existing pipe under the closed landfill site at Corban Reserve. To achieve this, a new pipeline will be tunnelled along Border Road to the Opanuku Stream.

14. As part of stage one of the physical works, a section of the stormwater pipe within Murillo Reserve will be daylighted with new boardwalks and planting, providing new amenities for the local community. Stage one also provides for additional access to the Twin Stream Cycleway within Border Road Esplanade from Taranui Place, along with improved planting by the entrance to the esplanade at Border Road.

15. Stage two of the works is to decommission the existing stormwater pipe underneath Corban Reserve. The reserve will then be upgraded with new signage and footpaths, recontouring to improve drainage, and planting. Stage three of the works is to upgrade part of the local stormwater network along Henderson Valley Road. This will include installing a new larger pipe within the road berm and replacing the pipe across Henderson Valley Road.

16. Further context will be presented in the confidential section of the 7 August 2019 Strategic Procurement Committee meeting.

Tātaritanga me ngā tohutohu

Analysis and advice

17. Analysis and advice regarding the procurement plan for stage one of the Corban Reserve stormwater upgrade project will be provided in the confidential section of the 7 August 2019 Strategic Procurement Committee meeting.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

18. Additional impacts arising from the procurement plan for stage one of the Corban Reserve stormwater upgrade project will be provided in the confidential section of the 7 August 2019 Strategic Procurement Committee meeting.

Ngā whakaaweawe ā-rohe me ngā tirohanga a te poari ā-rohe

Local impacts and local board views

Local impacts

19. This project will have significant positive benefits for people living in the surrounding area as it will eliminate levels of landfill gas and leachate entering the stormwater pipes and the associated health and safety risks. The new pipeline will help increase the capacity of the local stormwater network and reduce flooding of residential properties upstream of the pipe under Corban Reserve.

20. As part of stage one of the physical works, a section of the stormwater pipe within Murillo Reserve will be daylighted with new boardwalks and planting, providing new amenities for the local community. An additional access to the Twin Stream Cycleway within Border Road Esplanade from Taranui Place, along with improved planting by the entrance to the esplanade at Border Road, will also be provided for. Corban Reserve will be upgraded as part of stage two of the Corban Reserve stormwater upgrade project.

Local board views

21. The Henderson-Massey Local Board provided feedback on the proposed stormwater upgrade project at a workshop in August 2018. The board expressed support for the project and requested specific consideration be given to the health and safety issues associated with the site. The board also indicated its support for the upgrades of the Murillo Reserve, Border Road Esplanade and Corban Reserve, which will occur in stages one and two of the project.

Tauākī whakaaweawe Māori

Māori impact statement

22. The project brief was provided to mana whenua for review in October 2016 and updated in January 2018. A site visit was hosted by Healthy Waters with Te Runanga o Ngāti Whātua and Te Kawerau ā Maki who expressed interest in the proposed project. Both iwi expressed support for the project and requested that erosion of Opanuku Stream to be considered as part of project design. The potential erosion impact on Opanuku Stream has been carefully mitigated in the design of the outfall. A Cultural Impact Assessment from Te Kawerau ā Maki was received in October 2018 confirming general support for the works as per the site visit.

23. The current discharge of leachate is severely detrimental to the mauri of both the Waitaro Stream and Opanuku Stream. The mauri of two sections of the Waitaro Stream will be significantly improved through regrading, naturalisation and planting as part of the restoration initiatives to undertaken at Murillo Reserve and Corban Reserve.

Ngā ritenga ā-pūtea

Financial implications

24. Financial implications arising from the procurement plan for stage one of the Corban Reserve stormwater upgrade project will be provided in the confidential section of the 7 August 2019 Strategic Procurement Committee meeting.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

25. Risks and mitigations arising from the procurement plan for stage one of the Corban Reserve stormwater upgrade project will be provided in the confidential section of the 7 August 2019 Strategic Procurement Committee meeting.

Ngā koringa ā-muri

Next steps

26. Next steps arising from the procurement plan for stage one of the Corban Reserve stormwater upgrade project will be provided in the confidential section of the 7 August 2019 Strategic Procurement Committee meeting.

Ngā tāpirihanga

Attachments

There are no attachments for this report.

Ngā kaihaina

Signatories

Authors

Vivian Dias – Strategic Procurement Specialist

Gerhard Van Rooyen – Senior Healthy Waters Specialist

Authorisers

Matthew Walker – Group Chief Financial Officer

Barry Potter - Director Infrastructure and Environmental Services

Jazz Singh - General Manager Procurement

Strategic Procurement Committee

07 August 2019

Te Manawa multipurpose facility at Westgate (integrated library and community centre) construction: final status report

File No.: CP2019/11122

Te take mō te pūrongo

Purpose of the report

1. To provide a final status report to the Strategic Procurement Committee on the Te Manawa multipurpose facility construction contract at Westgate with Fletcher Construction Company Limited.

Whakarāpopototanga matua

Executive summary

2. Construction of the Te Manawa multipurpose facility at Westgate commenced on 6 March 2017, with practical completion granted on 18 December 2018. The facility opened on time on 26 March 2019, with a formal ceremony held on 6 April 2019.

3. Successful negotiations were undertaken between the project governance group and Fletcher Construction Company Limited (Fletcher Construction) management for a final settlement sum within the approved budget to close the contract.

4. The health and safety performance throughout the contract was excellent, and good quality of construction achieved.

5. As no high-level risks remain to the contract, this will be the final status report provided to the committee on this contract.

Ngā tūtohunga

Recommendation/s

That the Strategic Procurement Committee:

a) note the Te Manawa multipurpose facility at Westgate (integrated library and community centre) construction: final status report

b) note the information in this report enables transparency on the final construction status update for the Te Manawa multipurpose facility at Westgate (integrated library and community facilities), due for information and discussion in the public excluded part of the meeting.

Horopaki

Context

6. The Te Manawa multipurpose facility project at Westgate was previously reported to Strategic Procurement Committee on 12 December 2018 in a report and presentation titled “Westgate multipurpose facility (integrated library and community centre) construction”. A report was given in both the open and confidential sections of the agenda.

Tātaritanga me ngā tohutohu

Analysis and advice

Health and Safety

7. The contractor’s general attitude to the management of health and safety on site, aside from a previously reported incident, remained excellent to the end of the contract. This was demonstrated by independent audits undertaken on behalf of council and its own reporting. No incidents have occurred for the remainder of the contract period since last reported on 12 December 2018.

Timeline status

8. Practical completion of the main construction contract was achieved on 18 December 2018. This was within the allowed time contingencies set for the construction contract.

9. A period of operational activation and fit-out, not part of the construction contract was completed on time for the facility’s opening on 26 March 2019.

10. A formal opening ceremony and celebration was held at the facility on 6 April 2019.

Quality

11. Audits undertaken by the architect and consulting engineers have identified minor quality improvements and defects. These are being addressed promptly by the contractor.

12. The contractor’s attitude and attention to the management of quality construction practice remained good to the end of the contract and in addressing any issues during the defects period.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

13. Auckland Transport, Watercare and other parts of the council group were involved in the planning and design of the facility, however were not necessary for the construction contract. The views of council-controlled organisations were not required for the preparation of this report.

Ngā whakaaweawe ā-rohe me ngā tirohanga a te poari ā-rohe

Local impacts and local board views

14. Henderson-Massey Local Board received monthly updates and quarterly reports throughout the project. The local board visited the facility on 12 February 2019 and attended the dawn blessing on 25 February 2019.

15. The Henderson-Massey Local Board received and adopted the gifted name for the facility, Te Manawa, along with names for rooms and areas within.

Tauākī whakaaweawe Māori

Māori impact statement

16. The name of the facility, Te Manawa, and names for rooms and areas within were gifted by Ngāti Whātua o Kaipara.

17. The facility was blessed by kaumatua from Te Kawerau a Maki and Ngāti Whātua o Kaipara at the dawn ceremony on 25 February 2019.

18. Artwork representing mana whenua planned to be installed during the fit-out period has been delayed and will be installed later this year.

Ngā ritenga ā-pūtea

Financial implications

19. A final contract sum has been agreed with Fletcher Construction.

20. The final contract sum is within the contract budget, including contingency that has been previously approved by the committee.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

21. Risk management involving identification, mitigation and control is being continually implemented and the risk management plan is operating to close out any remaining risks.

22. All high-level risks previously reported to the committee have been resolved satisfactorily.

23. No new risks have eventuated or been identified since the last report provided on 12 December 2018.

24. Lessons learned during the delivery of the project are being actively recorded and together with improvements will be implemented in other projects of this nature.

Ngā koringa ā-muri

Next steps

25. The project governance group will work to close the contract.

26. Lessons learned from the contract are being gathered and will be available together with improvements implemented in other projects.

27. Due to the successful public opening of the facility and conclusion of contractual negotiations with Fletcher Construction this will be the final status report provided to the committee on this contract.

Ngā tāpirihanga

Attachments

There are no attachments for this report.

Ngā kaihaina

Signatories

Author

John Schermbrucker – Head of Project Delivery, Community Facilities

Authorisers

Rod Sheridan - General Manager Community Facilities

Ian Maxwell - Director Community Services

Jazz Singh - General Manager Procurement

Strategic Procurement Committee

07 August 2019

$5M Capital Projects Update

File No.: CP2019/13546

Te take mō te pūrongo

Purpose of the report

1. To provide an update on currently agreed capital projects with a budget of over $5 million.

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.

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

5. The FY19 budget for the 78 (over $5 million) projects included in the report totals $276.2 million.

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

6. As part of the council project management process, all capital projects are updated monthly using the council’s Sentient project management system. Current project details are then used to compile the quarterly update on projects over $5 million that is subsequently presented to the Strategic Procurement Committee. The projects are sorted by Portfolio (Department) and Phase.

7. Details provided in the confidential report include a commentary report detailing:

· Report ID – starting at C1 – to enable project identification for this meeting

· Project name

· Project objectives

· Project Sponsor

· Ward

· Local board area (where the local board has decision making involvement – otherwise this will say Regional/Region-Wide

· Local board Geographical area – the Local Boards affected directly by the project

· CPI traffic light indicator (Cost Performance Index compares actual project spend to how much would be expected to be spent this far into the project). This indicator is most reliable in the Delivery phase of the project.

o Green indicates that the project has spent less than would be expected this far into the project

o Amber indicates that the project has spent slightly more than would be expected this far into the project

o Red indicates that the project has spent significantly more than would be expected this far into the project. There may be good reasons for this - e.g. land purchases early in projects.

o Grey indicates that the project has yet to have any expenditure

· Project manager commentary

· Local board commentary.

8. In addition, a financial report is included, which has the following:

· Report ID – starting at F1 – to enable project identification for this meeting

· Project name

· Ward

· Local board area (where the local board has decision making involvement – otherwise this will say Regional/Region-Wide

· Current Investment Delivery Framework (IDF) project phase of the project (for example, strategic assessment, initiate, plan, deliver)

· Estimated start and finish dates

· Percentage of project complete per the project manager

· Total project budget – all years

· Total project actuals – all years

· Total project budget – FY19

· Total project actuals – FY19

· Total project variance (Actuals – Budget) – FY19 (a negative figure is an overspend)

9. As well as a list of all of the projects, the confidential report also includes a breakdown projects by ward and department with traffic light values.

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

Tātaritanga me ngā tohutohu

Analysis and advice

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

12. 75% of projects in the Delivery phase have a Cost Performance Index of amber or green. This compares to 74% in the previous quarter. Details on key changes will be provided by senior managers at the meeting.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

13. The council works with Council Controlled Organisations (CCOs) and other departments in a number of different ways while delivering projects. Details and examples are provided in the confidential report.

Ngā whakaaweawe ā-rohe me ngā tirohanga a te poari ā-rohe

Local impacts and local board views

14. Consultation with local boards on the progress of projects is included. More detailed engagement is being managed by the relevant departments within the Operations Division.

Tauākī whakaaweawe Māori

Māori impact statement

15. Māori are regularly kept up to date on project delivery through regular reporting by the appropriate departments in the Operations Division.

Ngā ritenga ā-pūtea

Financial implications

16. The confidential report provides details of budgets, spend and forecast for individual projects. These financials are regularly reported within the relevant departments.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

17. All project risks are stored within the Sentient project management system used for all capital projects. Project managers may have also referred to key risks in their commentary in the confidential report.

Ngā koringa ā-muri

Next steps

18. These reports are provided quarterly.

Ngā tāpirihanga

Attachments

There are no attachments for this report.

Ngā kaihaina

Signatories

Author

Dan Auber - Enterprise Capability Manager

Authorisers

Ramari Slattery - Head of Strategic Portfolio and Programme Office

Jazz Singh - General Manager Procurement

Strategic Procurement Committee

07 August 2019

Group Source Procurement update 2018-2019

File No.: CP2019/14121

Te take mō te pūrongo

Purpose of the report

1. To provide an update to the Strategic Procurement Committee on Group Source Procurement for FY19.

Whakarāpopototanga matua

Executive summary

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

What we achieved: FY19 Results

3. In order to measure the progress of our Group Source programme, the ‘benefit’ procurement adds to the organisation is quantified across the group. This benefit is not just limited to cost savings or procuring at the lowest price. It also includes benefit from productivity improvements, costs avoided and revenue generated.

4. FY19 built on the strong results of FY18. FY18 was the first year all three organisations had pipelines built and reported on benefits. In FY18 we reached $112.4M of confirmed benefit. In FY19 we have built on this and have achieved $146.6M of confirmed benefit. Not only have we achieved more as a group this financial year than any before, we have also individually improved on our FY18 results.

Organisation	FY18 Result	FY19 Result
AC	$59.3M	$66.6M
AT	$41M	$54.7M
Watercare	$12M	$25.3M
Total	$112.4M	$146.6M

5. This financial year was the first time we were able to report on hard, in year OPEX cost savings across the group. In order to achieve this, procurement across the group worked closely with finance to realise savings. Through working more closely with finance, procurement has been able to support all three organisations to make in year savings and has had a positive impact on operating expenditure across the group.

6. Auckland Council, Auckland Transport and Watercare procurement teams have continued to work together as a group and have added to our group documentation. We have had our Group Procurement Strategy endorsed by the CFOs. We have drafted a Group Supplier Code of Conduct which has been amended, where required, to the individual organisation. These documents provide a clear direction for Group Source and support us working together now and into the future. We have also had access to spend analytics across all three organisations which has informed various workstreams including Strategic Relationship Management with our top (by value spent) suppliers.

7. Sustainable procurement has been a strong focus area of Group Source this financial year. As a council group we have joined Ākina, a social enterprise specialising in positive social and environmental impact. Specifically, Ākina supports the Council group to build positive outcomes into procurement related activities. In line with this, there has been an increase in procurement activities with sustainable outcomes undertaken by the Group.

8. For more detail on what we have achieved please refer to the attached slide pack (Attachment A).

What we’ve achieved: Highlights

9. In FY19 the group has supported and operationalised a number of better outcomes for our community. Whether this be through a more environmentally friendly construction approach, a smarter approach to projects or ensuring targeted employment outcomes including workforce development or providing the living wage. Examples of these better outcomes are detailed below.

Working Smarter, Together - Victoria Linear Park to Albert Park Streetscape upgrade

10. This programme of works is being procured jointly between Council and Auckland Transport. Due to the synergy with the Wellesley St Auckland Transport upgrade programme and CRL works along Albert St, there was a significant programme synergy and efficiency opportunity identified. Procurement and programme teams from Council and Auckland Transport are working together to achieve group benefits. These include being able to bundle contracts in this area – realising programme delivery efficiencies and using our combined spend to negotiate better rates.

Creating a Cleaner City – Solar Powered Council building Great Barrier Island

11. Auckland Council procurement was involved in this activity funded by the One Local Initiative Fund. The procurement was for a solar powered system to power the council’s service centre, local board office, dentist and morgue. It will also provide back-up power for the island’s health centre. The solar panels will provide a cleaner and more renewable energy system for the buildings, which had been powered by diesel generators.

Supporting Aucklanders – AMETI Eastern Busway 1 Construction

12. This procurement is one of the first and largest projects in Auckland that includes sustainable outcomes as contractual requirements. Auckland Transport secured a range of positive social and environmental outcomes beyond the physical works for this procurement. Auckland Council’s The Southern Initiative was integral to the development of the social outcomes in this contract and providing ongoing support for both diverse businesses, new recruits and supporting Fulton Hogan to deliver the outcomes.

13. Social outcomes include targeted employment outcomes and supplier diversity. Targeted recruitment outcomes are the creation of quality employment opportunities for groups experiencing barriers to employment (such as Māori, Pasifika and women).

14. To meet the supplier diversity requirement the contractor is required to award five per cent of their subcontract value to Māori owned businesses, Pasifika owned businesses or social enterprises. Environmental outcomes focus on measuring, reporting on and then reducing greenhouse gas emissions, water consumption and waste.

Where we’re going: FY20 onwards

15. As the role of procurement within our own organisations matures and we continue to build our reputation as trusted advisors, we are working to increase the visibility of our pipelines and forward work programmes. Additionally, we are also able to analyse spend data across the group by category and portfolio. These developments are enabling us to have a more proactive approach to identifying and implementing group procurement opportunities.

16. A quick win we are currently exploring is panel agreements and syndicated contracts for services delivered across the group. These agreements allow us to benefit off work already done by our colleagues – saving our organisations’ time and money. Aided by our pipelines and view of spend, we can better influence business stakeholders to take advantage of these opportunities.

17. We will also be using this information and more proactive approach to continue to embed sustainable outcomes into our procurement initiatives across the group.

Ngā tūtohunga

Recommendation/s

That the Strategic Procurement Committee:

a) receive the Group Source Procurement update for 2018-2019.

Ngā tāpirihanga

Attachments

No.	Title	Page
a ⇩	Strategic Procurement Committee - Group Source FY19 results	25

Ngā kaihaina

Signatories

Author	Duncan Glasgow - Governance Advisor
Authoriser	Jazz Singh - General Manager Procurement

Strategic Procurement Committee

07 August 2019

Summary of Strategic Procurement Committee information memoranda and briefings, including the Forward Work Programme - 7 August 2019

File No.: CP2018/25290

Te take mō te pūrongo

Purpose of the report

1. To note the progress on the forward work programme appended as Attachment A.

2. To receive a summary and provide a public record of memoranda or briefing papers that may have been distributed to Strategic Procurement Committee members.

Whakarāpopototanga matua

Executive summary

3. This is a regular information-only report which aims to provide greater visibility of information circulated to Strategic Procurement Committee members via memoranda/briefings or other means, where no decisions are required.

4. The following memos were circulated to members:

Date	Subject
25/7/2019	Food scraps procurement

5. Note that staff will not be present to answer questions about the items referred to in this summary. Committee members should direct any questions to the authors.

Ngā tūtohunga

Recommendation/s

That the Strategic Procurement Committee:

a) note the progress on the forward work programme appended as Attachment A of the agenda report

b) receive the Summary of Strategic Procurement Committee information memoranda and briefings – 7 August 2019.

Ngā tāpirihanga

Attachments

No.	Title	Page
a ⇩	Strategic Procurement Committee - Forward Work Programme - 07 August 2019	29
b ⇩	Strategic Procurement Committee - Memorandum - Food scraps update - 07 August 2019	37

Ngā kaihaina

Signatories

Author	Duncan Glasgow - Governance Advisor
Authoriser	Jazz Singh - General Manager Procurement

Strategic Procurement Committee

07 August 2019

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: Approval of the procurement plan for Corban Reserve Stormwater Upgrade - Stage one

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)(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 commercially sensitive information relating to procurement of stormwater services.

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: Te Manawa multipurpose facility at Westgate (integrated library and community centre) construction: final status 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 information that could prejudice council's position with suppliers and other parties with regard to the resolution of disputes.

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 - $5M Capital Projects Update

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.