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.
An apology from
Mayor P Goff has 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 Tuesday, 1 December 2020, 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.”
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Strategic
Procurement Committee
02 February
2021
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|
Procurement plan for legal services
File No.: CP2021/00194
Te take mō te
pūrongo
Purpose of the report
1. To
note the procurement plan to issue a Request for Proposal (RFP) for external
legal services.
Whakarāpopototanga matua
Executive summary
2. In
January 2018 Auckland Council deployed an innovative “contracted provider
model” for provision of external legal services following an open RFP
process. This made a shift from ad hoc estimates-based instructions, to a
structured approach to achieve better pricing, efficiency, alignment,
innovation and risk management. This model has been successful.
3. The
contracts were extended for six months to avoid issuing an RFP during Covid-19
and its aftermath, and Legal Services / Ngā
Ratonga Ture is now ready to take the contracts back to
market.
4. The
objectives in this RFP are:
· include
Auckland Transport and Watercare in relevant workstreams.
· retain
the benefits from the previous RFP in managing business as usual BAU legal
work, including the specific innovations and added-value benefits we wish to
retain.
· introduce
an “integrated delivery” approach for large matters (including
significant litigation and major projects). This is aimed at the seamless use
of both in-house and external resource on large matters, rather than
all-or-nothing briefing.
· emphasise
values-alignment, including Māori outcomes and sustainability, as active
partners for council group in pursuing these shared objectives.
5. The
workstreams included in the RFP are largely the same as last time, with some
minor changes and consolidations. This time we do not need to test the market
so broadly in terms of innovation proposals, having got a feel for what works.
This RFP will be more focused on exactly what we want, and therefore easier for
the market to respond to, and for us to evaluate and negotiate.
6. A
willingness of firms to drive efficiency in BAU workstreams and engage with us
on the new way of “integrated” working, will be critical to their
success in the RFP. We expect that this will be another New Zealand-first in
the legal market and should attract good interest.
7. Auckland
Council Legal Services/Ngā Ratonga Ture and Procurement teams have engaged with Watercare and
Auckland Transport to involve them in the proposed RFP and they have agreed to
participate in the procurement process, including evaluation and negotiation.
8. In
keeping with Legal Services/Ngā Ratonga Ture’s commitment to its Māori Responsiveness Strategy, a new
Te Ao Māori evaluation criterion will be introduced in the evaluation
process.
9. Most of Council group’s combined legal spend is covered by
this RFP, including Auckland Council and its shared-services CCOs Panuku and
Auckland Unlimited as well as Auckland Transport and Watercare (who will be
taking their budgets through separate approval processes).
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Ngā tūtohunga
Recommendation/s
That the Strategic Procurement
Committee:
a) note
the information contained in this report on the procurement for legal services
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
10. Effective
delivery of in-house legal services depends on managing external provider
relationships, optimising performance of the in-house team, and balancing
high-service delivery standards for internal clients with demand reduction and
self-help tools.
11. The
“contracted provider model” from 2018 addressed the external
relationship and dovetailed with in-house and client-side initiatives. It was a
novel approach for council, especially in terms of the lump sum approach to
high-volume BAU workstreams, taking a portfolio approach to service delivery
and risk management.
12. We
achieved significant financial savings, service-level improvement, risk
management, innovation and client-relationship management benefits. Lump sum
pricing for BAU effected a realignment from maximising cost inputs, to
maximising outcomes. It changed the game from buying “retail”, to
more of a supply-side solution for BAU work bundles.
13. The
aim of this RFP is to build on that success, with a new focus on “integrated
delivery” of larger legal matters, including significant litigation
and major projects. These account for an increasingly large part of group legal
spend, and the “retail” price is high:
· By joining in-house
and external resource to provide seamless legal services to clients we aim to
resource work more effectively, better manage costs and outcomes, and achieve a
range of broader Council objectives.
· This departs from
the old approach of “law firm acting on instruction”, and requires
high mutual trust, a shared accountability for good outcomes, and willingness
to embrace a new way of providing services.
14. Watercare
and Auckland Transport have also been working towards similar procurement
approaches, and the collaboration which occurred between us during Covid-19 has
set the stage for us jointly to procure some of the workstreams we have in
common.
15. While
the first RFP mostly focused on structural and systemic improvements (and
outcomes alignment), the integrated delivery approach will sharpen the focus on
behaviours and values alignment. We need to partner with firms that are up for
this challenge and ready to evolve the way they work with their significant
clients. It will also be a healthy challenge for Legal Services/Ngā Ratonga Ture (and counterparts in
Auckland Transport and Watercare).
16. The
RFP will clearly state that successful providers need to:
· Share and support
Council group’s values, objectives and behaviours.
· Contribute to
Council group’s obligations and commitments to Māori and demonstrate
support for Māori outcomes.
· Be committed to
Council group’s social and sustainable outcomes, including having and
promoting a sustainable, diverse and inclusive workforce.
· Provide added value
capability and outcomes that are specifically described, including mahi tahi
objectives which take a long-term and holistic view of the relationship.
17. Since
the last RFP, Council’s policies have moved from Māori
“responsiveness” to a more explicit focus on delivering actual
Māori outcomes. This theme will be strongly reflected in the RFP. We are
interested in:
· Capabilities and resources they have
which will help develop our own performance;
· The firms’ own programmes to
enhance Māori employment and development outcomes (to match our own Local
Government Act objectives on Māori employment and participation),
including representation in their senior leadership;
· Their outreach and pro-bono
activities for Māori;
· Their engagement and involvement in
the Māori economy, and opportunities to help leverage and develop Council
group’s connections in this area (including alternate financing,
environmental management, and infrastructure investment and delivery);
· Their cultural competency and
evidence of living those values; and
18. Māori
outcomes are discussed further in the Tauākī whakaaweawe Māori
part of this Report.
19. An
integrated approach places more responsibility on the in-house team, as there
is less “risk-shifting” to external firms (with associated cost).
The management rigour in Legal Services/Ngā
Ratonga Ture, and high professionalism and experience
of team members, helps enable this model and manage risk.
Tātaritanga me ngā
tohutohu
Analysis and advice
Contract performance
20. From
January 2018, contracts were awarded to eleven providers across seventeen
workstreams.
21. Over
the past three years, contracts have resulted in savings and value-add benefits
for legal services and council.
22. The
contracted provider model has been particularly successful in managing costs
and risks in high-volume “business as usual” areas under the lump
sum approach.
23. The
appropriate responses to help manage legal budgets and spend are not solely
related to procurement strategy. Legal Services/Ngā
Ratonga Ture continues to work on managing
budget pressures, the current and future challenges of optimising the balance
of internal FTE, a focus on “legal operations” improvements, tools
and technology, reducing service levels in some areas, and closer coordination
with business units regarding legal expense for major opex projects.
Integrated delivery model
24. While the
last RFP and provider contracts focused on innovative ways to achieve savings
through lump sum bundling of BAU work and more closely managing instructions,
this RFP will focus on developing an integrated delivery model of working
together with contracted law firms to achieve greater savings and better
outcomes for council on large matters.
25. The
amount of this work has increased which puts significant demands on in-house
time and external legal resource, often under tight time constraints. Cost
savings for major project work and significant litigation are hard to achieve.
Our main providers already offer discounted rates, and there are not the same
“bundling” efficiencies as for BAU.
26. We have
trialled the integrated approach on recent litigation matters and commercial
projects.
27. Efficient
allocation of work between in-house and external resource on single matters
(with clear task responsibility) has other benefits for staff development,
innovation and engagement. It shares success on the “interesting”
work and builds strong relationships. It will be a new experience for some of
the firms, because they will not control the end-to-end product, and may have
concerns about liability, insurance and reputational risk. We are confident we
can manage those issues.
28. The
integrated approach also underscores the importance of values alignment and our
non-financial outcomes: If we are working that closely together, modelling
shared values and driving common goals becomes important. While previously
these fell into the “value-add” category (which can tend to be
make-weights), more integrated working will allow two-way travel on corporate
social responsibility issues.
Tauākī whakaaweawe
āhuarangi
Climate impact statement
29. The
recommendations made in this report are not considered to have any specific
climate impacts.
Ngā whakaaweawe me
ngā tirohanga a te rōpū Kaunihera
Council group impacts and views
30. Auckland
Council, Auckland Transport and Watercare are undertaking a group source
approach to do more with less while creating better value for
ratepayers.
Ngā whakaaweawe
ā-rohe me ngā tirohanga a te poari ā-rohe
Local impacts and local board views
31. The
recommendations made in this report are not considered to have any specific
impacts on local boards.
Tauākī whakaaweawe
Māori
Māori impact statement
32. Legal Services/Ngā Ratonga Ture and
Procurement has engaged with the Independent Māori Statutory Board, Amotai
- the Southern Initiative, and Te Hunga Roai Māori
leading the development of a set of Māori priorities
for this RFP. We have provided for Māori outcomes
as a specific evaluation criterion, distinct from other sustainability and
social procurement objectives.
33. Importantly,
Te Ao Māori outlook will be integrated into our general evaluation and
relationship expectations with providers, especially given the emphasis this
procurement places on values alignment.
34. The specific Māori outcomes we are seeking are set out
above in this Report, and there will be more scope to explore these during
negotiations with shortlisted providers. We are conscious that many of the
firms will have been making progress in this area, and we look forward to them
sharing opportunities and ideas.
35. There
will also be a range of Māori law firms in the market who may be able to
provide specialist services to Council group, but not necessarily have the
scale or resource to bid effectively for large workstreams (or have conflicts
which make it impractical to be an “exclusive” provider to a local
authority). Boutique firms generally have the same problem. It should be noted
that this RFP covers most, but not all, of our combined legal spend. The RFP
focuses on large and bulk spend areas which can be effectively
“tendered”. We still have a meaningful amount of legal work (by
total value) which gets directly briefed off-panel where required. The RFP may
help us better understand Māori firm capability in the market, and
separately Legal Services/Ngā Ratonga Ture is considering
how we should manage off-panel spend.
36. Legal Services/Ngā Ratonga Ture teams are committed to improving Māori outcomes
in keeping with the department’s business plan and goals. This includes
working with providers who show a commitment to Te
Tiriti o Waitangi.
Ngā ritenga
ā-pūtea
Financial implications
37. In
reviewing legal spend the following should be noted:
· The
RFP does not cover all legal services, but all legal spend with the providers
is deemed to be covered by the contracts for relationship management and
performance review purposes.
· Influences
on spend levels include our capacity to deliver services in-house (current
FTEs), and major projects and litigation which have a direct and indirect
impact on the volume of work briefed to providers.
Ngā raru tūpono me
ngā whakamaurutanga
Risks and mitigations
38. The key
risks relating to this procurement and proposed mitigations to ensure
successful delivery are summarised below.
39. Risk of procurement failure: risk of
procurement failure is moderate due to the complex nature and broad scope of
services being procured. It is expected that this will be mitigated through
extended engagement and consultation with internal legal stakeholders and a
high level of oversight by senior procurement personnel.
40. Market does not deliver required outcome within budget: this may result in a need to re-procure services or it could
place council in a weak position through direct negotiation with an incumbent
supplier. This risk will be mitigated through an early engagement process so
potential suppliers can determine how they can meet the council’s
objectives, provide early visibility of key risks and issues, and advise on
what the market can and cannot contribute towards the proposed procurement.
Ngā koringa ā-muri
Next steps
41. The
RFP process will commence on 3 February 2021.
42. The
supplier recommendations will come to the Strategic Procurement Committee for
approval in May 2021.
Ngā tāpirihanga
Attachments
There are no attachments for
this report.
Ngā kaihaina
Signatories
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Author
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Margaret Malcolm - Legal Practice Manager
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Authorisers
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Helen Wild - General Counsel
Jazz Singh - General Manager Procurement
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