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

 

Date:

Time:

Meeting Room:

Venue:

 

Tuesday, 7 September 2021

10.00am

This meeting will be held remotely and a recording of the meeting will be available on https://www.aucklandcouncil.govt.nz/about-auckland-council/how-auckland-council-works/meetings-council-bodies/Pages/webcasts-council-meetings.aspx

 

 

Strategic Procurement Committee

 

OPEN AGENDA

 

 

 

 

MEMBERSHIP

 

Chairperson

Cr Greg Sayers

 

Deputy Chairperson

Cr John Watson

 

Members

Cr Dr Cathy Casey

 

 

Deputy Mayor Cr Bill Cashmore

 

 

Cr Linda Cooper, JP

 

 

Cr Alf Filipaina

 

 

Cr Tracy Mulholland

 

 

IMSB Member Karen Wilson

 

Ex-officio

Mayor Hon Phil Goff, CNZM, JP

 

 

(Quorum 4 members)

 

 

 

Michelle Judge

Kaitohutohu Mana Whakahaere / Governance Advisor

 

1 September 2021

 

Contact Telephone: 0211950262

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 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.

 

Code of conduct

 

For information relating to Auckland Council’s elected members code of conduct, please refer to this link on the Auckland Council website - https://www.aucklandcouncil.govt.nz/about-auckland-council/how-auckland-council-works/elected-members-remuneration-declarations-interest/Pages/elected-members-code-conduct.aspx

 

 


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 September 2021

 

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          Summary of Strategic Procurement Committee information memoranda and briefings (including the forward work programme) - 7 September 2021                                                  9

9          Healthy Waters programme delivery model procurement plan                                                                                                        19

10        Consideration of Extraordinary Items

 


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 Tuesday, 10 August 2021, 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 September 2021

 

Summary of Strategic Procurement Committee information memoranda and briefings (including the forward work programme) - 7 September 2021

File No.: CP2021/12571

 

  

 

Te take mō te pūrongo

Purpose of the report

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

Whakarāpopototanga matua

Executive summary

2.      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.

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

 

Ngā tāpirihanga

Attachments

No.

Title

Page

a

Forward Work Programme

11

      

Ngā kaihaina

Signatories

Author

Michelle Judge - Kaitohutohu Mana Whakahaere / Governance Advisor

Authoriser

Jazz Singh - General Manager Procurement

 



Strategic Procurement Committee

07 September 2021

 

 

Komiti Mahi Āta Torotoro Rawa / Strategic Procurement Committee
Forward Work Programme 2021 / 2022

This committee deals with ensuring sound procurement processes are followed in order to deliver on the work programme and operations outlined in council’s adopted Annual Plan. It has responsibility for awarding contracts of $22.5 million or greater, awarding sensitive contracts and oversight of procurement strategies, processes and procedures.

The full terms of reference can be found here: Governing Body Terms of Reference

 

 

Area of work and Lead Department

Reason for work

Committee role

(decision and/or direction)

Expected timeframes

Highlight the month(s) this is expected to come to committee in 2021 / 2022

Aug

7 Sep

28 Sep

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Healthy Waters Programme Delivery model procurement plan

Healthy Waters

With the growing requirements for Healthy Waters asset investments and increased capex budget to be delivered in future financial years, a more efficient and collaborative delivery model is required. Heathy Waters department is pursuing a sustainable and efficient delivery of the programme of capex projects for the next six years and beyond.

Decision: Approval of Procurement Plan and strategy to approach the market for Healthy Waters alternate programme delivery model.

A report will be provided in September 2021.

 

 

 

 

 

 

 

 

 

 

 

 

Materials Recycling Facility Operator Contract

Waste Solutions

To procure a materials recycling facility operator.

The current contracts expire on 30 June 2024.

Decision: Approval of procurement plan for the new material recycling facility operator.

A report will be provided in September 2021.

 

 

 

 

 

 

 

 

 

 

 

 

Electricity Network Resilience Tree and Vegetation Maintenance

Community Facilities

To procure tree pruning services on trees covering areas around powerlines within the Auckland Council region.

Progress to date: Procurement plan approved to approach the market for the ongoing maintenance of tree pruning on 8 June 2021 (Resolution number STR/2021/20). 

 

Decision: Approval of the supplier recommendations.

A report will be provided in September 2021.

 

 

 

 

 

 

 

 

 

 

 

 

SAP Maintenance Agreement

Information Communication Technology

The current SAP maintenance agreement is due to expire at the end of December 2021. Procurement plan to approve direct negotiation with SAP.

Decision: Approval of procurement plan

A report will be provided in September 2021.

 

 

 

 

 

 

 

 

 

 

 

 

All of Government (AOG) Recruitment Panel

People and Capability

Existing approved budget for spend against AOG Recruitment panel is running out. Further budget requires approval.

Decision: Approval of contract variation.

A report will be provided in September 2021.

 

 

 

 

 

 

 

 

 

 

 

 

Rates Valuations

Rates, Valuations and Data Management

Auckland Council currently operates under a dual valuation service provider model for valuations.

The overall objective of the Request for Proposal (RFP) is to streamline the valuations function to:

·    reduce operating costs

·    increase the quality of data, enabling future opportunities for commercialisation of valuation products

increase the quality and consistency of data to ensure we can meet our legislative requirements.

Progress to date: Procurement plan approved for rates valuations RFP on 10 August 2021 (Resolution number STR/2021/31).  

 

Decision: Approval of supplier recommendation report.

A report will be provided in November 2021.

 

 

 

 

 

 

 

 

 

 

 

 

Building Consents overflow services variation approval for additional years

Building Consents - Regulatory services

With the increased demand in consenting services, a review is done across the various current suppliers’ services. To get service certainty and retention of key personnel, there is a need for providing certainty to the market with longer duration contracts and hence a variation approval is required for the current contracts to enable this.

Decision: Approval of variation to increase the term of contract.

A report will be provided in November 2021.

 

 

 

 

 

 

 

 

 

 

 

 

Te Whau pathway shovel-ready funding project

Community Facilities

To provide an update on the progress of the project and amendments in scope if any from the previously approved procurement plan.

Environmental outcomes and better transport connectivity through walkways and pathways. Faster project delivery and construction to support multiple community outcomes using the shovel-ready funding.

Progress to date: Procurement plan approved to approach market for the main project works covered by shovel-ready funding.

Authority delegated to council’s chief executive to execute the procurement plan, approve the supplier recommendation report, award of contract, and approval of variations on 13 October 2020 (Resolution number STR/2020/20).

 

Update to committee with any changes in project scope.

A report will be provided in November 2021.

 

 

 

 

 

 

 

 

 

 

 

 

Corban Reserve Supplier recommendation

Healthy Waters

To procure a contractor to deliver the project to divert stormwater flows from the 78 hectare Waitaro Stream catchment away from the existing culvert under the closed landfill site at Corbans Reserve by installing a new pipeline discharging to Opanuku Stream. The existing culvert under Corban Reserve is currently a high-risk asset due to the infiltration of landfill gas and leachate.

Progress to date:  Procurement plan approved to approach the market for a tender to deliver Corban Reserve tunnelling project on 13 April 2021 (Resolution number STR/2021/12).

 

Decision: Approval of the supplier recommendation report.

A report will be provided in November 2021.

 

 

 

 

 

 

 

 

 

 

 

 

Microsoft Licensing

Information Communication Technology

The Microsoft licensing reseller agreement expires in September 2022, and Auckland Council plans to approach the market again with Auckland Transport and Watercare.

Decision: Approval of procurement plan.

A report will be provided in February 2022.

 

Decision: Approval of supplier recommendation report.

A report will be provided in April 2022.

 

 

 

 

 

 

 

 

 

 

 

 

 


 

Completed

Lead Department

Area of work

Committee Role

(decision and/or direction)

Decision

Community Facilities

Full Facilities contract performance update

To update the Strategic Procurement Committee on suppliers’ performance under Community Facilities’ arboriculture services, ecological services, and full facilities maintenance contracts.

To receive the Community Facilities full facilities contracts performance update for Financial Year 19/20.

The update was received in December 2020.

(Resolution number STR/2020/26)

Community Facilities

Te Whau pathway shovel-ready funding project

Environmental outcomes and better transport connectivity through walkways and pathways. Faster project delivery and construction to support multiple community outcomes using the shovel-ready funding.

Approval of procurement plan to approach market for the main project works covered by the shovel-ready funding.

Procurement plan approved.

Authority delegated to council’s chief executive to execute the procurement plan.

Authority delegated to council’s chief executive to approve the supplier recommendation report, award of contract and approval of variations.

(Resolution number STR/202019)

Environmental Services

Biodiversity protection services delivered through the Natural Environment Targeted Rate – Category Strategy

This procurement category strategy will support effective implementation of the council’s key services related to the natural environment targeted rate work programmes.

Endorsement of procurement category strategy for biosecurity protection services delivered through the Natural Environment Targeted Rate.

The Category Strategy was endorsed.

(Resolution number STR/2020/4)

Environmental Services

Update on suppliers for the Retrofit Your Home panels

To provide an update on the suppliers who were appointed to the Retrofit Your Home panels.

Establishment of supplier panels.

The establishment of the panels was approved.

(Resolution number STR/2019/66)

Healthy Waters

Healthy Waters Maintenance contracts

To provide effective operations and maintenance of the regional stormwater network. This contributes to managing and improving the health of Auckland’s harbours and waterways and responding to flooding events. This is council’s responsibility under the Regional Stormwater Network Discharge Consent.

Award contracts to recommended suppliers for Healthy Waters operations and maintenance contracts, and the regional maintenance of catchpits and treatment devices.

Procurement plan for operations and maintenance services for: the southern area of the Auckland region; regional maintenance of catchpits; regional maintenance of treatment devices.

Overall strategy approved for procuring stormwater operations and maintenance services for the northern and central areas.

(Resolution number STR/2019/67)

 

Emergency Committee approved the awarding of the southern and regional maintenance contracts.

(Resolution number EME/2020/14)

 

Procurement plan approved for the operations and maintenance contract for the northern and central area of the Auckland region.

(Resolution number STR/2020/10)

 

Supplier recommendation report and award of contract approved for northern and central area of the Auckland region.

(Resolution number STR/2021/11)

Healthy Waters

Update on suppliers for physical works and technical services panels

To provide an update on the suppliers who were appointed to the Healthy Waters technical services and physical work panels.

Establishment of supplier panels.

The establishment of the panels was approved.

(Resolution number STR/2019/25)

Legal and Risk

External Legal Services

To procure external legal services. Current contracts expired in December 2020.

Award contracts to recommended suppliers for external legal services.

Extension of current legal contract for legal services approved.

(Resolution number STR/2020/24)

 

Procurement plan for new external legal contract/services approved.

(Resolution number STR/2021/5)

 

Supplier recommendations approved.

(Resolution number STR/2021/21)

Procurement

SAP Licensing Renegotiation

To re-negotiate current SAP agreement to better suit council’s current and future needs, and to better align with SAP’s commercial and technical roadmap.

Approval of contract variation for support and maintenance services for a 5-year period until December 2025.

A report was provided in December 2020.

(Resolution number STR/2020/25)

Procurement

Group Procurement Policy

To address recommendation 64 of the CCO Review which called for a revision of the council’s Group Procurement Policy to better mandate Group Procurement activity.

Noting revision of Group Procurement Policy.

Policy approved at the Finance and Performance Committee meeting.

(Resolution number FIN/2021/61)

Waste solutions

Award of Waiheke waste services

New waste services for Waiheke were procured in 2019 to deliver on the objectives on the Waste Management and Minimisation Plan 2018 and the Tīkapa Moana Hauraki Gulf Islands Waste Plan which is an appendix to the overall waste plan. Implementing these plans is a legislative requirement under the Waste Minimisation Act 2008.

Approval of procurement plan to approach the market for the new waste services for Waiheke Island.

Procurement plan approved for Waiheke waste services.

(Resolution number STR/2019/3)

 

Supplier recommendations for Waiheke waste services approved.

(Resolution number STR/2019/69)

 

A memo was sent in November 2019 to provide an update on the award of Waiheke waste services.

Waste Solutions

Inorganic services contract

To procure an inorganics service, which is an action in the Waste Management and Minimisation Plan 2018: Working together for Zero Waste. Implementing the waste plan is a legislative requirement under the Waste Minimisation Act 2008.

Approval of procurement plan and supplier recommendation report for new inorganic contract/services commencing February 2022.

Procurement plan for new inorganic contract/services commencing February 2022 approved.

(Resolution number STR/2020/19)

 

Supplier recommendation report approved.

(Resolution number STR/2021/19)

Waste Solutions

Extension to inorganic services contracts

To allow time for a review of the current inorganics service, which is an action in the Waste Management and Minimisation Plan 2018: Working together for Zero Waste. Implementing the waste plan is a legislative requirement under the Waste Minimisation Act 2008.

To approve a one-year extension/variation with incumbent suppliers for the inorganic collection and inorganic processing contracts.

Procurement plan approved for the inorganic collection service, and the six-month extension of the current inorganic collection contracts.

(Resolution number STR/2020/18)

 



Strategic Procurement Committee

07 September 2021

 

Healthy Waters programme delivery model procurement plan

File No.: CP2021/11417

 

  

 

Te take mō te pūrongo

Purpose of the report

1.      To approve the procurement plan for a new capital programme delivery model for Healthy Waters, noting that any financial commitment will follow appropriate delegated financial authority approval.

Whakarāpopototanga matua

Executive summary

2.      Healthy Waters is responsible for managing and improving the health of Auckland’s harbours and waterways. This includes operating, and maintaining the stormwater network, providing responses to flooding and delivering on Aucklanders’ expectations for water quality and safety. The water quality targeted rate provides for a significant investment to accelerate water quality outcomes.

3.      The Long-term Plan 2021-2031 increases the level of direct investment by Healthy Waters in the first three years, a 15 per cent increase from the Long-term Plan 2018-2028. To deliver this additional investment, Healthy Waters needs to accelerate work programmes from planning through to delivery.

4.      While Healthy Waters consistently delivers its capital projects, an analysis of the current delivery approach has been carried out to look for further opportunities for efficiency gains and to futureproof it for possible future changes. This analysis identified two key areas where improved efficiency might be achieved. These are improved project scoping and more efficient procurement processes. 

5.      Improvements in project scoping will be achieved through early collaboration with key parties to achieve better outcomes in terms of health and safety, constructability, consenting, Māori outcomes, carbon reduction and waste minimisation.

6.      To deliver on more efficient procurement processes the following delivery models were considered: an alliance delivery model, an enterprise delivery model, and collaborative panel delivery model. None of the models was able to address all the requirements so a tailored delivery model has been proposed – a programme delivery model.

7.      The proposed programme delivery model will increase efficiencies by selecting a panel of designers and constructors for a programme of similar work over a period of three-years, with the option of a further three-year extension. Over time there may be up to sixteen different programmes of work reduced from the current individual 250 projects.

8.      Engaging the same supply partners for a programme of work will reduce project delivery timeframes and costs through efficiencies in design, consenting and procurement, enabling better risk management and improved health and safety outcomes alongside the delivery of other desired outcomes such as social and sustainable procurement and Māori outcomes. The continuity of work will enable suppliers to develop dedicated teams which will also improve efficiency and result in cost savings.

9.      Staff recommend an open market two-staged procurement to select suppliers for inclusion in the new programme delivery panels. Stage one is an open request for expressions of interest, followed by stage two, a closed request for proposals/tenders from shortlisted suppliers.

10.    The procurement plan for the programme delivery model approach has been provided as Attachment A.

Ngā tūtohunga

Recommendations

That the Strategic Procurement Committee:

a)      approve the procurement plan for a programme delivery model for Healthy Waters capital works for an approximate value up to $500 million over a term of six years from financial year 2021/2022 to financial year 2027/2028

b)      delegate the approval of any changes to the procurement plan and the approval of selected suppliers to the Chief Executive of Auckland Council

c)      note that award of contracts will follow the appropriate delegated financial authority approval processes.

Horopaki

Context

Opportunities for improved efficiency

11.    While Healthy Waters has a record of consistent delivery of capital works, an analysis of the delivery approach has been carried out and has identified further efficiency gains and opportunities for improvement.

12.    This analysis aims to create a more efficient and streamlined delivery process for Healthy Waters capital works projects which will:

·        reduce the length of time taken for the design and consenting phase of projects

·        minimise procurement processes and enable social and sustainable procurement

·        include Mana Whenua partnership and Māori outcomes

·        incorporate climate change adaptation utilising waste minimisation and carbon accounting/reduction

·        enable early contractor involvement throughout the design process

·        provide efficiency through continuity and certainty of work to the market.

13.    These opportunities for improvement and improved efficiency can be grouped into two key areas: improved project scoping and more efficient procurement processes.

Improved project scoping

14.    Improvement opportunities were identified in the project scoping phase where early collaboration with key parties could achieve better outcomes in terms of health and safety, constructability, consenting, Māori outcomes and environmental outcomes. Improvements to the project scoping stage will be achieved internally using a virtual “Project First” team approach.

15.    A tailored “Project First” team will be set up for each programme and will include representation from multiple areas such as catchment planning, operations, costing, resource consenting, design, Mana Whenua, construction, and sustainable outcomes (emissions and waste), as required to suit the scale and nature of the programme. This team will be mainly resourced from internal staff and will occur independently of the procurement process.

Current procurement approach

16.    Opportunities for efficiency gains were also identified in the procurement approach. Currently Healthy Waters undertakes separate procurement processes for each project, with approximately 250 projects underway. Designers are procured to design each project separately which then goes out to tender for construction once the project has been fully designed and consented. This process is replicated for each project, with each supplier going through the full tender process, regardless of previous or current similar contracts.

17.    The current procurement process:

·        results in duplication of procurement processes for each project

·        cannot adapt quickly to changing demands and workload in a time of uncertainty

·        does not have a strong ability to leverage social and sustainable outcomes

·        does not enable suppliers to invest in technology and equipment and develop dedicated teams.

Tātaritanga me ngā tohutohu

Analysis and advice

18.    Staff analysed models that are currently used for infrastructure delivery to identify the best option for the Healthy Waters forward work programme delivery. The options considered are described below

Delivery model options analysis

19.    The following delivery models were considered: an alliance delivery model, an enterprise delivery model, and collaborative panel delivery model. An analysis of these options has been provided in Table 1.

Table 1. Options analysis for Healthy Waters delivery model

 

Status quo (individual procurement by project)

Alliance delivery model

Enterprise delivery model

Collaborative panel delivery model

Programme delivery model (recommended)

Value for money

ü

û

ü

ü

üü

Adaptability

û

ü

ü

ü

üü

Sustainability and social outcomes

üü

üü

üü

üü

üü

Market distribution across suppliers

üü

û

û

ü

üü

Minimal impact on staff

üü

û

ü

ü

üü

Key:  üü fully delivers      ü partially delivers      û does not deliver

Alliance model (not recommended)

20.    An alliance model has been successfully used for major capital project across New Zealand. This model has strong financial incentives operating somewhat independently from council structures. An alliance avoids the need for suppliers to bid for work project-by-project. This model suits projects with budgets far greater than most of Healthy Waters’ projects. It has been discounted because it is not suited to the scale and nature of Healthy Waters’ programme of work and because it could significantly impact both council staff and the wider market

 

 

Enterprise model (not recommended)

21.    An enterprise delivery model was adopted by Watercare in early 2019. Aligning with Watercare’s model may enable future efficiencies, subject to central government’s Three Waters Reform Programme. The Watercare model is currently limited to projects over $5 million in value and uses two principal constructors, who may contract out part of the work. Watercare is currently in the process of procuring the design and planning services from three suppliers for inclusion into the model. This model is likely to have a greater effect on the local market, blocking out small to medium suppliers and specialised suppliers with self-delivering capability and has therefore been discounted.

Collaborative panel (not recommended)

22.    A collaborative panel is used by Wellington Water. This approach relies on a panel of three design partners (some of which are made up from multiple suppliers) and three construction partners which are made up of three suppliers each. The designers are required to share the work amongst themselves as are the constructors. This process enables early constructor involvement and the ability to leverage longer term outcomes. However, the model is not as well suited to the Healthy Waters programme delivery. Healthy Waters want to focus on programmes of similar work to allow investment in resources and to enable lessons learnt to improve efficiencies.

Programme delivery model (recommended option)

23.    The programme delivery model will allow the council to engage the same supply partners for a programme of work, which will reduce project delivery timeframes and costs through efficiencies in design, consenting and procurement, enabling better risk management and improved health and safety outcomes alongside the delivery of other desired outcomes such as social procurement and Māori outcomes. The continuity of work will enable suppliers to develop dedicated teams which will also improve efficiency and result in cost savings.

24.    The outcomes of central government’s Three Waters Reform Programme and new regulations under Taumata Arowai (the water service regulator) are still largely unknown. They are likely to significantly impact the standards and scale of work required for water infrastructure. The proposed delivery model is agile and will enable the council to respond quickly to any changes in project delivery, scale or prioritisation.

How the proposed programme delivery model will work

25.    It is anticipated that up to sixteen different delivery programmes will be established based on type and complexity of work. These will range in size and complexity from a simple planting programme to larger, more complex programmes such as tunnelling or stormwater separation.

26.    The proposed delivery programmes are:

·        stormwater separation

·        small water supply

·        general pipe works

·        small wastewater treatment

·        tunnelling and pipe jacking

·        planting

·        stream works

·        reactive urgent works

·        dam safety

·        major projects

·        pond and wetland renewals

·        stream and coastal outfalls

·        pipe lining

·        fish passages.

·        gross pollutant traps

 

 


 

27.    Each delivery programme will contain between one and three designers and between one and three constructors, depending on the size and nature of the works. The process is futureproof and can be easily adapted to significant changes in funding by adding additional programmes, or programmes may be scaled up or down with suppliers added or reduced if necessary. 

28.    Specialist panels will be established to provide expert input into projects or programmes where this expertise cannot be delivered by the designers or constructors.

29.    The establishment of multiple delivery programmes of varying size and complexity allows for many of our existing suppliers, both large and small, to be involved in the ongoing delivery of Healthy Waters capital works programme.

30.    Figure 1 shows a draft proposed structure for the programme delivery model.

Figure 1. Proposed new delivery approach

Procurement approach

31.    An open market two-stage procurement approach has been selected because there are many suppliers in the market who may be keen to participate, as this is a long-term programme delivery opportunity with certainty of ongoing business and scalability. Open tender will provide equal opportunity to the market, and the council will be able to select the best available design and delivery partners through a fully transparent evaluation and selection process.

32.    Stage one will comprise an open Request Expression of Interest, followed by stage two, a closed Request for Proposal/Tender to four-five suppliers per work category, depending on the responses from the market.

33.    Framework agreements will be entered into with successful supply partners for particular programmes of work. Framework agreements will not guarantee work, but the partners will continue to get selected for the work as long as they continue to work collaboratively, meet their key performance indicators, provide high quality work and their prices remain reasonable.

Tauākī whakaaweawe āhuarangi

Climate impact statement

34.    Auckland Council has committed to halve its 2016 greenhouse gas emissions by 2030 and achieve net zero emissions by 2050. The construction industry accounts for about eight per cent of carbon generated in Auckland. Healthy Waters is aware of the role we must play in reducing carbon emissions generated by our infrastructure projects and contribute to Te Tāruke-ā-Tāwhiri: Auckland's Climate Plan, in particular Action area B2: ensure new infrastructure is planned and designed to minimise climate risks and lifecycle emissions.

35.    All Healthy Waters projects are designed to reduce the risk from climate change and sea level rise. In addition, every project will be required to prepare a carbon reduction plan which will be initiated by the “Project First” team and will consider both embodied carbon (carbon generated during the manufacture or construction of the asset) and operational carbon (carbon generated during the operation of the asset), throughout the full lifecycle of an asset.

36.    In addition to this, providing continued work will allow suppliers to invest in low carbon technology and equipment.

 

37.    Construction projects account for a significant waste stream in Auckland. Contributing to Action area B7 of Te Tāruke-ā-Tāwhiri (develop and support initiatives to minimise construction and demolition waste), Healthy Waters will require all projects to develop a waste management plan. One of the proposed key performance indicators for delivery partners will be to demonstrate sustainable waste management.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

38.    Healthy Waters works closely with several council-controlled organisations and other council departments to deliver capital projects. The recommended model has been discussed with Watercare, Eke Panuku Development Auckland, and Community Facilities.

39.    The proposed procurement approach will not impact on any of the council-controlled organisations or other council departments. This procurement approach could however be used by other departments within council where appropriate.

40.    Alignment with Watercare is a priority for Healthy Waters, particularly as we deliver water quality improvement projects and plan for the Three Waters Reforms. The Watercare enterprise delivery model was considered in the options analysis. Some aspects of their model have been included in the proposed approach, but due to the scale and specialised nature of Healthy Waters’ projects it was not considered suitable as a package.

41.    Due to the uncertainty of the Three Waters Reform Programme at this stage it is proposed that the suppliers are engaged for an initial three-year period with the option of a further three-year extension. There will be an annual review process in place facilitated by council staff.

42.    The proposed programme delivery model approach is compatible with Watercare’s model but will make wider use of the available suppliers in the market. Where possible, we have aligned terminology with Watercare’s current model to support contractors to understand the model.

43.    Some projects of the Healthy Waters programme are likely to be identified as best delivered through Watercare’s enterprise model due to the type and nature of the projects, which may have synergies with Watercare projects. In such cases Watercare enterprise model will be used as the delivery arm. Similarly, where we find synergies, our model could also be used to deliver some Watercare projects.

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

Local impacts and local board views

44.    This proposal will deliver on projects across the Auckland region, which will in time occur in a specific location. There are a large range of programmes both large and small which will provide opportunities for smaller and larger local suppliers to be involved.

45.    The views of local boards will be sought on major capital works projects delivered in their local areas. Quarterly updates are provided to local boards on delivery of regionally funded Healthy Waters capital projects in their area and specific engagement is undertaken depending on the type and location of a project within local board areas.

Tauākī whakaaweawe Māori

Māori impact statement

46.    Healthy Waters currently works with mana whenua through both the Infrastructure and Environmental Services mana whenua forum, and with individual mana whenua as required for specific projects. This process does not currently enable mana whenua involvement early enough in a project’s lifecycle.


 

 

 

47.    The proposed new delivery model has been set up to enable mana whenua to exercise kaitiakitanga of te taiao in Tāmaki Makaurau (Kia ora te Taiao in the council’s Māori Outcomes Framework). This will be achieved by including mana whenua much earlier in a project’s lifecycle with their inclusion in the project scoping phase as part of the “Project First” team. Mana whenua can provide advice on Mātauranga Māori to inform project design and provide feedback that leads to improved environmental outcomes. The level of involvement from mana whenua will be dependent on their priorities and availability of resources. It is anticipated that over time resourcing levels will increase and enable far greater involvement from mana whenua resulting improved outcomes for Māori.

48.    The programme delivery model has been set up with a wide variety of programmes. Some of these, such as planting, stream works and fish passage works, may be well-suited to be delivered by Māori businesses. This will contribute to delivering on Māori outcome Kia ora te Umanga.

49.    Two of the proposed delivery programmes, small water supply and small wastewater treatment will contribute to the upgrade of marae infrastructure. This will contribute to delivery of the Māori outcome Kia ora te Marae.

50.    The programme delivery model maximises opportunities for Māori to be involved in the scoping and design of projects. The proposed model also creates a long-term collaborative opportunity to work with suppliers in creating additional job opportunities and apprentice opportunities for Māori candidates. This will contribute to rangatahi Māori realising their potential (Kia ora te Rangatahi). There will be specific key performance indicators incorporated within the model to achieve this. The supplier selection process will also actively seek this.

Ngā ritenga ā-pūtea

Financial implications

51.    Healthy Waters has a capital budget of $818 million over the next six years of the Long-term Plan 2021-2031. $550 million of this is funded from general rates and $268 million is funded via the water quality targeted rate. It is anticipated that up to $500 million of this budget will be delivered through this programme delivery model.

52.    It is expected that the new delivery model will reduce project delivery timeframes and costs through efficiencies in design, consenting and procurement, enabling better risk management and improved health and safety outcomes.

53.    It is anticipated that supplier engagements will be for three years plus an option to extend for three years, conditional on continued performance, and that this continuity of work will enable suppliers to develop dedicated teams which will also improve efficiency and result in cost savings.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

54.    Retaining the status quo presents risks for managing health and safety, and ability to deliver the expected suppliers’ capital works.

55.    Key risks and mitigations for the programme delivery model are provided in Table 2.


 

Table 2. Key risks and proposed mitigations of the recommended option (programme delivery model)

Risks 

Likelihood and Consequence 

Mitigation

Residual risk

Delivery of capital works 

 

Managing health and safety risk

High

Safety by design and using early constructor involvement in the design process

Low

Disruption resulting from potential Three Waters Reforms

High

Programme supply partners engaged for six years to ensure continuity of delivery

 

Low

Increased budgets resulting from Three Waters Reforms

High

Additional suppliers can be added to programmes if workload is increased, or additional programmes may be added

Low

Transition to the new delivery model

Medium

Projects currently in design will continue under current arrangements and transition to the new delivery model for construction

Low

Procurement approach

 

Market response

Low

Early market engagement

Low

Availability of suppliers in a tight market

Medium

Engaging suppliers for a six-year period ensures ongoing workload and enables then to resource appropriately

Low

Supplier performance

Low

Supplier performance will be reviewed on an annual basis and if they are not performing, they risk being replaced

Low

 

56.    The key risks of recommended option are in the market response, and Healthy Waters’ ability to adapt to the new model while continuing to deliver on current work programmes.

57.    The market response risk has been mitigated through early market engagement and supplier briefing/feedback session during the options analysis, and by considering the experiences of existing models across New Zealand. Where necessary, adjustments can be made to the model to respond to issues as they emerge.

58.    Healthy Waters intends to establish this new model by early 2022. This would mean a shorter period of disruption to existing staff, and ability to respond to the Long-term Plan 2021-2031 under the new model from the outset.

Ngā koringa ā-muri

Next steps

59.    Early engagement and market sounding has been undertaken with the supplier market. Subject to approval from the committee, Requests for Expressions of Interest will be issued to the open market on 8 September 2021, with shortlisted suppliers notified in late October 2021.

60.    Timing of supplier recommendations will vary depending on the programmes of work that are being procured.

61.    Healthy Waters intends to have the new delivery model established by early 2022.

 

Ngā tāpirihanga

Attachments

No.

Title

Page

a

Healthy Waters delivery model procurement plan

29

     

Ngā kaihaina

Signatories

Authors

Chris Stumbles – Head of Design and Delivery

Carl Brown – Procurement Manager

Authorisers

Craig Mcilroy – General Manager Healthy Waters

Barry Potter - Director Infrastructure and Environmental Services

Jazz Singh - General Manager Procurement

 


Strategic Procurement Committee

07 September 2021

 

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