Recommendation to Extend the Provision of Temporary Labour Services Contract.
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1 AVON AND SOMERSET CONSTABULARY Form 419 Ref: TO983 Date: 20 th January 2014 SUBJECT: Recommendation to Extend the Provision of Temporary Labour Services Contract. 1 Introduction This document is submitted to outline the options available and subsequently recommend the preferred option to ensure the continued provision of Temporary Labour services. This is an ongoing procurement requirement with spend of between 350K and 550K per annum for ASC. The current contract is in place until 31 st March 2014, with an option to extend for a further 12 months to 31 st March Background Avon and Somerset Constabulary (ASC) currently have a framework contract in place with Reed Recruitment to provide all their professional and temporary labour requirements. Reed Recruitment provides a fully outsourced managed service through a Managed Vendor Provider (MVP) solution. This means that Reed source appropriate candidates both through their own recruitment staff and using range of 2 nd tier recruitment suppliers who have access to an appropriate pool of candidates. The contract with Reed Recruitment was awarded under a 36 month framework agreement via an OJEU tender process, awarded in There were two options within the framework to extend for a further two 12 month periods. The first of these two options has already been taken up and is due to expiry on 31 st March Spend and Savings Data Below are the spend figures for: FY and FY spend to November 2013 The next 12 month projected spend
2 Client April 2012 March 2013 April 2013 November 2013 Projected Spend April 2013 March 2014 ASC 542, , , Achieved savings figure on this contract to date is 84,000. The predicted savings per annum have so far been achieved and exceeded on this contract. This is measured against the rates that were paid to the previous supplier for this service prior to the current contract. 4 Procurement Options Based on market research there are a number of procurement options available. A brief options analysis is carried out below in order to ascertain the most advantageous way forward. Option 1 Extend the current contract to 31 st March 2015 The existing contract is recognised as having very competitive day rates and fees that have been delivering continued savings as detailed above. Despite this, the agency fees were reduced last year through negotiation. This year, as part of the options analysis and assessing the merits of an extension, Reed will hold the current framework fees for a further 12 months for all temporary labour with the exception of Client Supplied and Ex Police Officers, which following negotiations will each be reduced by a further 1 %. This will provide further savings of around 1,279 for the year depending on demand. Compared to the alternative options listed below, this contract offers us very competitive prices for the next 12 months without the need for any further competition. The value of this contract is demonstrated by the comparisons to the rates on the new, alternative frameworks outlined in the below options. In addition to the direct cost benefits there are a number of other advantages linked to extending the current contract: Avoids cost and time of re-tendering in the next 12 months when a competitive contract is already in place and available to legally extend within OJEU provisions. The long term relationship is well established and the contract mechanisms are all set up to deliver consistency and assurance of supply. Customers of the service at ASC, TDBC and SCC have confirmed they support an extension. Carole Wood has confirmed her support for an extension at ASC. Efficient processes are set up - including o Streamlined SAP process o transparent electronic catalogues and booking process
3 o transparent management information for all clients o Supports SME s through performance assessed 2 nd tier arrangements In terms of disadvantages, this contract was placed in 2010, therefore it is possible that some service and process innovation could be missed for another 12 months if we extend. However this can be investigated and quick win improvements made if practical in line with the already established systems. Overall the merits of extending this contract for another 12 months appear to outweigh any disadvantages. Option 2 Utilise MSTAR- ESPO Framework ESPO have a framework in place for Managed Services for Temporary Agency Resources. It provides 2 different models for management of temporary labour. Lot 2b is a like for like comparison to what Reed currently deliver. It is a Resource Pool Managed Service for the Provision for Corporate & Education Staff. This framework can either use direct award or mini competition to select a supplier. Reed s maximum direct award rates on the framework do not appear to provide savings for the resources ASC requires, though Reed calculates a very small saving of 6,170 per annum based on current usage for ASC. The MSTAR fees are based on a maximum agency fee in pence per hour compared to the current contract which has standard % fee for the different types of labour. Analysis shows that the MSTAR fees and hourly rates do not provide any savings when compared to the existing contract with Reed. Based on the above, direct award would not be recommended, but there may be merit in competing the MSTAR framework to find the best supplier and to establish if there are any cost benefits to be obtained. On this basis, this option is not being recommended at this time. However it will be an option to be assessed in more detail for the longer term strategy. Option 3 Utilise GPS Framework RM960 Contingent Labour One This GPS framework was put in place in June It has 3 lots, each with a single supplier. Customers can chose a managed service similar to what we currently have. However it is split into 2 lots (Lot 2 & 3) and therefore 2 suppliers. Brook Street provides admin and clerical staff, whilst Hays provide operational and support staff. The alternative lot is a dynamic marketplace option (Lot 1) where Capita competes mid to higher value requirements within a dynamic supply chain. Prices have been baselined against FY 2009/10 rates. This is the point at which our current Reed contract was awarded.
4 Comparison of rates and fees on this framework does not show savings without carrying out a further competition. High level analysis shows that the hourly rates appear to be higher and that the fees and charges have a wider variation. Also, this option may complicate the contract management and service provision as it would mean either 2 managed service suppliers or a supply chain model. It is therefore likely to need a significant implementation period. Given that there is also no obvious cost reduction based on our initial investigations, it is not considered an appropriate option in the in the short term, but the merits of this framework should be assessed as part of the longer term strategy. Option 4 Carry out OJEU Tender This option is not practical in the timeframe to 31 st March 2014, but should be considered in the longer term strategy for 2015 and beyond, given that the frameworks available may not maximise client benefits and appear more complicated than our current arrangement. Option 5 Collaboration There is a national contract for temporary staff that is led by Thames Valley Police and used by many forces including those covered by South West Police Procurement Department (SWPPD). The contract ends on 31 st March 2014 and it is understood that this contract will potentially be extended by a further 6 to 12 months. Therefore this is not a contract we could join now, but the option of wider collaboration must be considered for the longer term strategy as long as timescales can be lined up to facilitate procurement leverage opportunities.
5 5 Sustainability This contract encourages the use of SME s by the use of second tier recruitment suppliers. It also supports the local labour market through the placement of local individuals with the required skills where appropriate. Extending the existing contract for another 12 months will not have an adverse effect on travel or printing requirements as there will be no change management requirements. 6 Recommendation Based on the options analysis above, it is recommended that a one year contract extension be placed to 31 st March 2015 with the incumbent supplier, Reed Recruitment Limited for the approximate value of 512,000 (based on predicted spend) for Avon and Somerset Constabulary. Please note that although an extension is being requested, the options analysis and procurement planning for beyond March 2015 will need to commence in February 2014 and this extension will provide the time needed to fully explore the options available to ensure the best outcome. The recommendation to award a 12 month contract extension up to 31 st March 2015 to Reed Recruitment Limited for Temporary Labour Services is AGREED/NOT AGREED (Please delete as appropriate) Signed:... Date....
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