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 chairperson.
The committee has 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 the 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
(c) power to establish
sub-committees.
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.
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 Petitions
At the close of
the agenda no requests to present petitions had been received.
4 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.
5 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.
6 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
10 December
2019
|
|
Update
on the procurement of integrated waste collection contracts
File No.: CP2019/19595
Te take mō te
pūrongo
Purpose of the report
1. To
note an update on the procurement of integrated waste collections contracts.
Whakarāpopototanga matua
Executive summary
2. Auckland
Council’s current refuse collection contracts will expire in July 2020. Recycling collection contracts will expire in 2023 and 2024, and
food scraps collection contacts in current pilot areas will expire in 2020.
3. Staff have developed a procurement plan for a new integrated waste
collections model, which was approved by the Strategic Procurement
Committee in March 2019.
4. The
plan adopted an integrated collections model in which
one supplier will provide all three waste collection services (refuse,
recycling and food scraps) for a single contract area. The region was
broken into seven contract areas (see Attachment A).
5. The
new integrated model is expected to create a more collaborative
contractual partnership between the council and its suppliers
to focus on key outcomes, including:
· improving customer service and experience
· innovation and efficiencies (through bundling of the contracts and
other means)
· employee health and development
· waste diversion and resource recovery.
6. The
new integrated contracts must be awarded in December 2019 to ensure smooth
handover and continuity of refuse services before the old contracts end on 5
July 2020.
7. Staff
issued a notice of information to the market in March 2019 and an open request
for proposals from May to July 2019, and received competitive bids from
multiple suppliers.
8. Supplier
bids were assessed against both price and non-price attributes. Non-price
attributes included health and safety, customer service, methodology and
sustainability. After evaluating the suppliers against these criteria and
prices, staff proceeded with negotiations to ensure the best
price, environmental and social outcomes for the council.
9. More
detail regarding the supplier recommendations for the integrated waste
collections contracts will be provided in the confidential section of the 10
December 2019 Strategic Procurement Committee meeting.
|
Ngā tūtohunga
Recommendations
That the Strategic Procurement
Committee:
a) note
the information contained in this report, on the procurement of integrated
waste collection contracts, 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 the
council's position in negotiations with suppliers.
|
Horopaki
Context
Existing refuse, recycling and food scrap collection contracts
10. There
are 10 existing council contracts for household refuse, recycling and food
scrap collection services with eight suppliers across Auckland. The council is
now procuring an integrated collections service across seven contract areas
(see map in Attachment A).
11. As
shown below in Table 1, six of the 10 existing contracts are for refuse
collections, three for recycling collections, and one further contract is for the
collection of food scraps.
12. These
collection contracts service approximately 530,000 households across Auckland
and will expire at different times.
Table 1. Auckland Council’s existing refuse,
recycling, and food scraps collection services*
|
Service
|
Description
|
Existing suppliers and
contract area
|
Expiry
date
|
|
Refuse collections
|
Four suppliers servicing
six contract areas** (excludes legacy Rodney District Council area which
currently only has private refuse collections)
|
· Envirowaste (Manukau)
· Smart Environmental (Franklin)
· Veolia (Waitākere, North Shore)
· Waste
Management (Auckland East/West, Papakura)
|
5 July 2020
|
|
Recycling collections
|
Three suppliers servicing
the seven contract areas shown in the map in Attachment A
|
· Envirowaste (Areas 3, 4, 5)
· JJ
Richards (Areas 2, 6 and 7)
· Smart Environmental (Area 1)
|
Areas 1, 2, 3 –
30 June 2023
Areas 4, 5, 6, 7 –
30 June 2024
|
|
Food scraps collections
|
One supplier servicing
pilot areas in urban Papakura and parts of North Shore (Milford, Takapuna and
Northcote)
|
· AIM Services
|
December 2020
|
* Not including
contracts for refuse and recycling on Hauraki Gulf islands or in the city
centre, or inorganic collections across Auckland.
** The contract areas for
refuse collections reflect legacy council boundaries.
13. All
recycling and food scraps services shown above are funded through targeted
rates. Refuse collections are not currently provided in Rodney, funded through
targeted rates in the legacy Auckland and Manukau City Council areas, and
through pay-as-you-throw in the legacy North Shore, Waitākere, Papakura
and Franklin (see Attachment B for a map of funding arrangements).
14. All
collection bins used for these collection services are assets owned by Auckland
Council. The maintenance and replacement of damaged bins is
currently contracted to one supplier for the whole region, Sulo New Zealand
Limited. Auckland Council also procures new refuse and recycling bins from Sulo
New Zealand Limited, when required.
15. The
council also has separate existing waste collection contracts on the Hauraki
Gulf islands and in the city centre. These waste contracts are all outside the
scope of the integrated waste collections procurement due to the specific
nature of the city centre and islands.
Rationale for introduction of integrated waste collection
services
16. A Value for
Money (Section 17A) review of the cost-effectiveness of Auckland
Council’s waste services was completed in November 2017. It found that,
although Auckland Council has achieved value in delivering waste services,
there are opportunities to deliver greater value for money.
17. PricewaterhouseCoopers
also undertook independent reviews of Auckland Council’s waste assets,
bin ownership and collection services in 2018. These reviews recommended
changing to an integrated waste collection contract model to enhance the
provision of kerbside collection services across Auckland.
18. Based on
these reviews, and the council’s own commercial and legal intelligence,
staff developed a procurement plan for a new collections contract model. This
was approved by the Strategic Procurement Committee on 6 March 2019 (resolution STR/2019/23).
19. The plan
outlined the council’s intention to procure integrated
waste collections services in which one supplier will provide all three waste
collection services (refuse, recycling and food scraps) for a single contract
area, with seven contract areas across Auckland.
20. The
new integrated model included in the plan is expected to create a more
collaborative contractual partnership between the council and its suppliers to focus on key outcomes.
21. These
outcomes include:
· improving customer service and experience
· innovation and efficiencies (through bundling of the contracts and
other means)
· employee health and development
· waste diversion and resource recovery.
22. It
also aligns with the commitment made in Auckland Council’s Waste
Management and Minimisation Plan 2018 to transition to consistent waste
services across the region.
Integrated waste collections contract areas
23. Table
2 below provides a description of the seven areas across Auckland that will
form the new integrated waste collection contracts and the local boards
represented in each one (Attachment A).
24. The seven new contract area boundaries are the same as the existing
recycling collection areas. These areas are largely aligned with council ward
boundaries with adjustments to allow for the most economic scale and
geographical split of the region.
25. The
contract areas include a mixture of properties across urban
and rural densities. Each area has been defined by staff after considering a
range of factors, such as distance to disposal locations and existing
collection day schedules. Some local boards are included in multiple contract
areas.
Table
2. Integrated waste collection contract areas*
|
Area
|
General
description of area covered
|
Local boards included within the contract area
|
|
1
|
Majority of
legacy north Rodney and northern parts of North Shore
|
Rodney, Upper Harbour, Hibiscus and Bays
|
|
2
|
Majority of
North Shore
|
Kaipātiki,
Devonport-Takapuna, Hibiscus and Bays, Upper Harbour
|
|
3
|
Waitākere
and western part of legacy Rodney
|
Waitākere
Ranges, Henderson-Massey, Upper Harbour, Rodney, Whau
|
|
4
|
Auckland
Central West
|
Puketāpapa,
Albert-Eden, Waitematā, Whau
|
|
5
|
Auckland
Central East
|
Ōrākei,
Maungakiekie-Tāmaki, Waitematā, Māngere-Ōtāhuhu
|
|
6
|
Manukau
|
Ōtara-Papatoetoe,
Howick, Māngere-Ōtāhuhu, Franklin, Manurewa
|
|
7
|
Franklin,
Manurewa, Papakura
|
Franklin,
Manurewa, Papakura
|
*Areas
align with existing recycling collection contract areas.
Timing of transition to new collection services and funding
models
26. An
indicative timeline illustrating when all the existing contracts will shift
over to the new integrated waste collection contract model is included as
Attachment C.
27. Refuse
collections are the first to change over to the new integrated collection
contracts, as they all expire on 5 July 2020.
28. Recycling
collections under the new integrated model will come into effect in 2023 for
areas 1, 2 and 3, and 2024 for areas 4, 5, 6 and 7.
29. The
establishment of a new food scraps processing facility will be undertaken in
2020. The new food scraps collection service is then expected to be rolled-out
across urban areas of Auckland from 2021.
30. The
food scraps service will target the 40 per cent of organic material in
household refuse currently being sent to landfill. It is expected to
divert around 50,000 tonnes of food scraps per annum once all areas have an
established service. Over time this is expected to increase to 75,000 tonnes
per annum, due to population increases and increased use of the service as
residents become more familiar with it.
31. As
outlined in Auckland’s Waste Management and Minimisation Plan 2018, a
pay-as-you-throw system for refuse will be introduced across Auckland following
the roll-out of a weekly food scraps collection service for urban Auckland
households.
32. Pay-as-you-throw
systems incentivise residents to divert waste from landfill. Refuse collections
will be reduced from weekly to fortnightly once the weekly food scraps service
is well-established. This will further incentivise the diversion of waste from
landfill.
Tātaritanga me ngā
tohutohu
Analysis and advice
Procurement process
33. The procurement process began with an open notice of information to
the market on 8 March 2019. A request for proposals was released on 1 May
2019 and closed on 31 July 2019.
34. Between 29
April and 28 June 2019, the council held four briefing meetings with interested
suppliers to clarify the scope of services, procurement process and respond to
suppliers’ questions.
35. Suppliers could submit proposals for one contract area (a single
bid), two contract areas (a double bid), or three contract areas (a triple
bid). Suppliers could not be awarded contracts in more than three contract
areas to ensure competition in the market.
36. Staff
evaluated each supplier proposal for non-price attributes first to ensure the
desired social, cultural and environmental outcomes could be met by the
supplier. Pricing for each supplier’s bid was scored separately.
37. Negotiations
were undertaken with preferred suppliers until mid-November 2019, with a focus
on obtaining the best value for money over the life of the contracts.
38. Analysis and
advice regarding the integrated waste collections supplier recommendations will
be provided in the confidential section of the 10 December 2019 Strategic
Procurement Committee meeting.
Timelines for decision-making
39. December 2019 will be the last opportunity for decision-making
before timeframes for handover of refuse contracts become constrained.
40. If
the committee approves the supplier recommendations outlined in the 10
December 2019 confidential Strategic Procurement Committee report,
staff will finalise the contracts with suppliers as soon as possible to ensure
a smooth handover of refuse services in July 2020.
Tauākī whakaaweawe
āhuarangi
Climate impact statement
41. The
implementation of the integrated waste collections will reduce landfill
greenhouse gas emissions, particularly through food scraps diversion. It will
also reduce carbon emissions through the collection of recyclable materials to
continue their use in the circular economy.
42. Further
information regarding the climate impacts of the integrated waste collection
contracts is included in the confidential section of the 10 December
2019 Strategic Procurement Committee meeting.
Ngā whakaaweawe me
ngā tirohanga a te rōpū Kaunihera
Council group impacts and views
43. This
procurement has implications for multiple council departments including
Customer Services, Communications, Digital and Transformation, and Commercial
and Finance. Waste Solutions will maintain close communication with all
relevant departments to ensure they are prepared for any potential impacts on
their business.
44. Representatives
from Procurement, Legal and Probity were involved in the bid evaluations and
negotiations with the potential suppliers for this procurement.
Ngā whakaaweawe
ā-rohe me ngā tirohanga a te poari ā-rohe
Local impacts and local board views
45. Consultation
with local boards has not been undertaken regarding the supplier
recommendations outlined in the 10 December 2019 confidential Strategic
Procurement Committee report. Local boards were consulted on
creating a regionally consistent waste collection service through both the
development of Auckland’s Waste Management and Minimisation Plan 2018 and
the 10-year Budget 2018-2028.
46. Consultation
on these plans indicated that local boards broadly supported the introduction
of regionally consistent waste services. Most boards supported the introduction
of pay-as-you-throw refuse services, which will be implemented through the new
contracts.
47. Several
of the southern local boards raised concerns that their communities were
finding it challenging to adjust to new waste services. They requested that
support for communities to adjust to future service changes be made a priority,
particularly pay-as-you-throw refuse.
48. Staff
expect that adopting a model in which one private supplier provides all waste
collection services to a geographical area will mean communities receive more
integrated services. The integrated model will also provide a consistent
customer experience to meet the needs of local communities during service
transitions.
Tauākī whakaaweawe
Māori
Māori impact statement
49. Consultation
with mana whenua and Māori communities has not been undertaken regarding
the specific supplier recommendations in the confidential Strategic Procurement
Committee report. However, Māori priorities regarding waste were
identified through consultation with mana whenua and mataawaka on the Waste
Management and Minimisation Plan 2018.
50. The tradition
of kaitiakitanga to sustain and restore our collective resources, means that
waste minimisation approaches are vital and broadly supported by Māori.
Mana whenua also supported the introduction of a food scraps collection
services. The integrated collection services will support delivery of waste
minimisation and a food scraps collection.
Ngā ritenga
ā-pūtea
Financial implications
51. The budget
for refuse, recycling and food scrap collections was approved through the
10-year Budget 2018-2028.
52. Financial
implications arising from the procurement of integrated waste collection
contracts will be provided in the confidential section of the 10 December 2019
Strategic Procurement Committee meeting.
Ngā raru tūpono me
ngā whakamaurutanga
Risks and mitigations
53. Risks and
mitigations arising from the procurement of integrated waste collection
contracts will be provided in the confidential section of the 10 December 2019
Strategic Procurement Committee meeting.
Ngā koringa ā-muri
Next steps
54. If the
Strategic Procurement Committee approves the supplier recommendations outlined
in the 10 December 2019 confidential report, staff will work closely with
suppliers to ensure a smooth handover of waste collection services across all
contract areas. Refuse collections under the new contracts will start on 6 July
2020.
Ngā tāpirihanga
Attachments
|
No.
|
Title
|
Page
|
|
a⇩ 
|
Map of integrated waste collection contract areas
|
15
|
|
b⇩
|
Map of refuse collection funding types
|
17
|
|
c⇩
|
Indicative timeline for integrated contracts
|
19
|
Ngā kaihaina
Signatories
|
Author
|
Parul Sood – General Manager Waste Solutions
|
|
Authorisers
|
Barry Potter - Director Infrastructure and
Environmental Services
Matthew Walker - Group Chief Financial Officer
Jazz Singh - General Manager Procurement
|
