8.10 TENDER RESIDENTIAL KERBSIDE WASTE COLLECTION JOHN HICKS, CITY AND INFRASTRUCTURE SERVICES DARREN MARTIN, MANAGER OPERATIONS

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1 8.10 TENDER RESIDENTIAL KERBSIDE WASTE COLLECTION LOCATION/ADDRESS: GENERAL MANAGER: PREPARED BY: TRIM FILE NO: 14/06/1747 ATTACHMENTS: PROPOSAL WHOLE OF MUNICIPALITY JOHN HICKS, CITY AND INFRASTRUCTURE SERVICES DARREN MARTIN, MANAGER OPERATIONS Tender Evaluation Report Tender 1747 Residential Kerbside Waste Collection Nil 1. EXECUTIVE SUMMARY 1.1 The City of Port Phillip provides weekly residential kerbside waste collection services to 50,072 tenements within the municipality. This service utilizes a variety of mobile container configurations and services containers per week. 1.2 The current service is being provided via an external service delivery contract which commenced on 1 January 2005 and is scheduled to finish on 31 December A public tender process has been conducted for this service with the tender advertised on Saturday 3 December 2011 and closing on Friday 3 February Three tenders were received for this service. 1.5 The Tender Evaluation Panel (TEP) has recommended awarding the contract to Four Seasons Waste Pty Ltd (as trustee for the Four Seasons Waste Unit Trust) (Four Seasons) in accordance with the tender terms and conditions. 1.6 The TEP considers that Four Seasons is well placed to deliver residential kerbside waste collection services to the City of Port Phillip in accordance with the specification whilst providing value for money. 2. RECOMMENDATION That Council: 2.1 awards Four Seasons Waste Pty Ltd (as trustee for the Four Seasons Waste Unit Trust). Contract 1747 Residential Kerbside Waste Collection for a seven (7) year period commencing on 1 January 2013 to 31 December 2020, with an option for a further term of one (1) year 2.2 notes the rates submitted in Schedule 2 (inc GST) Pricing table being the Alternative Disposal Facility Rate - $0.55/t/km (inc GST) the Contract Rate for Collection of a Designated Container - $1.294 (inc GST) 235

2 2.2.3 the Contract Rate for Collection of Non Standard Containers of 1100 litre capacity - $7.20 (inc GST) the Contract Rate for Collection of Non Standard Containers of 1500 litre capacity - $7.20 (inc GST) 2.3 affixes the Common Seal of the Port Phillip City Council to Contract 1747 between Council and Four Seasons Waste Pty Ltd (as trustee for the Four Seasons Waste Unit Trust). 3. BACKGROUND AND CONTEXT 3.1 Background The current contract for the Residential Kerbside Waste Collection service expires on 31 December The tender was advertised in the Age on Saturday 3 December 2011 and closed on Friday 3 February The proposed contract term is seven (7) years with a possible extension of a further one (1) year The composition of the TEP is set out in Table 1 below. TABLE 1 COMPOSITION OF TEP Name Title Darren Martin Mauro Vella Nick Dunstan Tim Brown Chairperson Member Member Member All TEP members signed the standard form indicating they had no conflict of interest to declare and that they would keep the tender information confidential. The evaluation criteria and weightings are detailed in Table 2 below. TABLE 2 TENDER EVALUATION CRITERIA Criteria Occupational Health and Safety System Percentage Weighting Pass / Fail Quality Assurance System Pass / Fail Price 50% Capacity to meet the requirements of the specification 30% 236

3 Experience and Track Record 10% Environmental Management 5% Risk Plan 2.5% Transition Plan 2.5% 3.2 Tenders received and evaluation Details of the tenders received are shown in Table 3 below. The conditions of tender allowed for additional pricing to be included in the form of discounts if a single tenderer was awarded multiple contracts. As Four Seasons is the recommended tenderer for multiple contracts, the following pricing and scoring tables include both submitted and adjusted values. The recommended tenderer has been determined using the original submitted pricing schedule. TABLE 3 TENDERS RECEIVED No. Tenderer s Name Price (Inc GST) Annual Cumulative First 12 Months 1. Tenderer A $2,689, Tenderer B $2,504, Four Seasons $2,636,647 (submitted) $2,557,164 (adjusted) Note: Price is the cumulative total of rates submitted for standard containers, non standard 1100 litre containers and non standard 1500 litre containers multiplied by the number of containers in service multiplied by the specified weeks / frequency of collection for the first 12 months inclusive of GST All tenders were prepared in conformance with the specifications and contract conditions and have been referred to the TEP for their review and evaluation. In this instance, the TEP decided to interview three (3) tenderers. 237

4 The following total scores were agreed against the evaluation criteria detailed in Table 4 below. TABLE 4 - No. Tenderer s Name Score (Out of 100) Tenderer A Tenderer B Four Seasons (submitted) (adjusted) The final weighted score which takes into account all of the evaluation criteria (including price) has been used to determine the recommended contractor Council should engage for the delivery of its Residential Kerbside Waste Collection service. The following factors have been taken into account in scoring the tenders against the agreed criteria. Occupational Health and Safety System Four Seasons has a fully embedded occupation health and safety system, externally accredited to AS/NZS 4801:2001. The submission received detailed systems of work to address OH&S risks relevant to the contract specification and Occupational Health and Safety Act 2004 with the company showing a history of strong OH&S performance within this field Quality Assurance System Four Seasons has a fully embedded quality management system, externally accredited to ISO 9001:2008. The submission received detailed systems of work to ensure repeatable, consistent delivery of residential waste collection services in accordance with the specification Price Four Seasons has submitted a price in accordance with the Councils tendering and contract conditions specified in tender Price evaluations where performed using the cumulative total of rates submitted for standard containers, non standard 1100 litre containers and non standard 1500 litre containers multiplied by the number of containers in service multiplied by the specified weeks / frequency of collection for the first 12 months All tenders were assigned a score for price which has been derived from the ratio of the lowest bid compared to each other Capacity to meet the requirements of the specification Four Seasons is well resourced to provide residential kerbside waste collection services to the Council and has provided a submission which demonstrates a detailed understanding of the specification requirements and constraints associated with the delivery of such a service. The submission provides for adequate resources, both plant and human with a suitable mix of plant types and sizes along with the addition of jockeys on each collection vehicle to ensure safe, expedient bin clearances. 238

5 As the incumbent contractor they have a detailed understanding of the service requirements and constraints and have the flexibility to meet a changing collection environment. The location of their depot in Altona North is considered ideal for the delivery of the Port Phillip service as it is situated close to both the collection area and disposal point. Experience and Track Record Four Seasons has been in the residential kerbside waste collection industry for sixteen years servicing local government contracts across Victoria. They are the current contractor for this service within Port Phillip and have a proven track record in delivering such services. They have embedded management systems to ensure the safety and efficient clearance of bin containers and highly experienced staff at all levels. Environmental Management Four Seasons has an embedded environmental management policy and has demonstrated a detailed understanding and commitment to minimizing the environmental impacts of delivering such a service. The use of smart routing technology has been introduced to not only ensure that the most efficient collection routes are implemented, but also to minimize fuel use across the collection zone. This is complemented by the use of Euro 5 emission compliant plant. Detailed monthly reporting will also be made available to Council to track vehicle emissions and fuel use over the life of the contract. Risk Plan Four Seasons has submitted a risk management plan which covers the inherent risks associated with the delivery of this contract. This includes applicable insurances, externally accredited occupational health and safety / quality management systems, fit for purpose plant including maintenance programs, suitably qualified and resourced personnel, back up personnel / plant to ensure service continuation and sufficient financial capacity to meet the needs of the contract. As the incumbent contractor, they are also fully aware of the service scope and constraints associated with residential waste collection services at the City of Port Phillip. Transition Plan Four Seasons has submitted a suitable transition plan which identifies how they will commence services in accordance with the specification on 1 January This includes a vehicle procurement / manufacturing plan and resource plan. As they are the current contractor, transition handover meetings with other service providers are not required. Referee Checks Referee checks were completed on three local governments in which Four Seasons is currently performing kerbside collection services. All three referees recommended Four Seasons as a suitable contractor to perform such services Financial Checks Financial checks were completed using Dun & Bradstreet dynamic risk score reporting. The results indicated a relative risk of average. 239

6 4. CONSULTATION AND STAKEHOLDERS 4.1 Council has undertaken an initial consultation with the key stakeholders including community satisfaction surveys. The consultation process has assisted with the development of the specification and ensures the project will meet the community expectations. 4.2 The contract manager and project sponsor shall ensure the key stakeholders will be updated at the key project milestones. 5. DISCUSSION 5.1 OPTIONS Council to award the Residential Kerbside Waste Collection contract to Four Seasons Waste Pty Ltd (as trustee for the Four Seasons for a seven (7) year period commencing on 1 January 2013 to 31 December 2020, with an option for a further term of one (1) year. This recommendation is supported by the TEP Council can award a contract for the provision of Residential Kerbside Waste Collection to another tenderer 5.2 ALIGNMENT TO COUNCIL PLAN The Residential Kerbside Waste Collection service supports and enables Council to deliver the following strategies in the Council Plan : ensure robust financial management and accountability through the annual budget process and public reporting maintain Council and community assets to a standard that matches industry best practice further advance the move from waste management to resource recovery POLICY IMPLICATIONS The tendering for tender 1747 Residential Kerbside Waste Collection was conducted in accordance with Council s Tendering and Procurement Policy 5.4 FINANCE / RESOURCE IMPLICATIONS The expected gross cost of using the preferred contractor over the first 12 months of the contract is $2,557,164 (adjusted) including GST and will be subject to rise and fall provisions (CPI Melbourne All Groups) contained within the contract for the remaining contract term commencing 1 July 2014 (ie the price will be held for the first 18 months of the contract). The proposed contract sum is in accordance with budgetary projections for the service The tendered price of $2,557,164 (adjusted) including GST for the first 12 months of the contract represents an increase of $348,030 from the draft 2012/13 budget The tender from Contractor Four Seasons provides the best value for Council. 240

7 5.5 LEGAL & RISK IMPLICATIONS An effective and accurate Residential Kerbside Waste Collection service is required to enable Council to meet its statutory obligations. Four Seasons is well resourced with experienced personnel and this should ensure that Council avoids risk that may lead to financial loss or have a negative impact on the Council s reputation. As the incumbent contractor, Four Seasons is fully aware of all of the constraints associated with delivering this service The recommended tenderer operates under a fully endorsed OHS / QA system. In accordance with the contract terms and conditions the contractor must submit a transition plan for provision of Residential Kerbside Waste Collection services The recommended tenderer complied with the insurance requirements of $20,000,000 public liability The tender has been assessed in accordance with the Best Value principles; 6. IMPLEMENTATION STRATEGY a) the need to review services against the best on offer in both the public and private sectors b) an assessment of value for money in service delivery c) community expectations and values d) the balance of affordability and accessibility of services to the community e) opportunities for local employment growth or retention f) the value of potential partnerships with other Councils and State and the Commonwealth governments g) potential environmental advantages for the Council's municipal district. 6.1 TIMELINE The recommendation to award the contract to Four Seasons shall ensure a smooth transition with minimal risk to Council for the commencement of the contract on 1 January As Four Seasons is the incumbent contractor, no transition strategy with other contractors will be required. 6.2 COMMUNICATION Contract documentation shall be prepared and forwarded to the contractor for execution The Contracts and Procurement Unit shall notify all unsuccessful tenderers and offer debriefs to unsuccessful tenderers 7. OFFICER DIRECT OR INDIRECT INTEREST 7.1 No officers involved in the preparation of this report have any direct or indirect interest in the matter. 241