Decision details

(i)  To approve an extension to the existing Agreement with the Provider for two years from April 2023 to March 2025.

(ii)  To delegate authority to the Head of Supplier Management to take the necessary actions to give effect to this decision.

A two-year extension to the Agreement will offer best value, provide sufficient

time for the Council to furth develop the strategy relating to its commercial

waste service and help to alleviate the strategic procurement resource and

capacity pressures facing the organisation.

There is a requirement under the Environmental Protection Act 1990 for waste

collected by local authorities to be disposed of and therefore the Council must

have a contract in place with a supplier to provide a commercial waste disposal service. If the extension period to the Agreement is not agreed, the Council will need to procure a replacement contract which will require reprioritising resources from existing projects. This approach would result in additional procurement and mobilisation costs and there is no evidence that a

replacement contract would offer better value.

The Agreement is delivering against its objectives and performance standards. The Provider is positively contributing to delivery of social value through its operations which (subject to formal agreement with the Provider) would be enhanced as part of agreeing the recommended extension period.

The Agreement does not contractually commit the Council to use solely the

Provider for commercial waste disposal and there are no committed tonnage

requirements and, therefore, the Council could elect to use alternative

disposals sources and/or reduce (or increase) its disposal levels without

financial penalties if the Council’s circumstances or requirements change

during the extension period, subject to compliance with public procurement

law and the Council’s Constitution.

The waste disposal sites are within the city making this an efficient

arrangement in respect of operations and the environmental impact of these

operations.

Remaining with the Provider until March 2025 will allow a degree of certainty

in terms of the cost of commercial waste disposal because the Agreement

contains fixed tonnage rates charges (subject to indexation) to which the

Provider and the Council will be bound during the extension period.

To date, the Agreement features as a project within the Council’s Strategic

Procurement Programme (SPP). As part of planning resources and activity

relating to the overall SPP, the use of contractually permissible extension

options for relevant contracts have been considered and where it is

determined that the contract continues to provide best value,

recommendations to extend contracts are being made. This, in particular, is in

the light of the significant strategic procurement activity and pressure on the

organisation in the years up to 2026, the very limited resource available, the

cost of undertaking successful procurement projects, prevailing market

pressures and costs and the Council’s ability to withstand the rising contract

costs which are very likely to result from many of the re-procurements in the

SPP.

Extending the Agreement by one year only

Whilst this option would allow continuity of operation and cost stability for an

additional year, this is rejected as it would require further consideration and a

subsequent decision in respect of the of the final year extension, which - when

considering the contractual position set out in point 4 - is not deemed to be

appropriate use of the Council resource as there would be no discernible

additional benefits in doing so.

Undertaking a procurement for a new commercial waste disposal

contract to be in place by the end of the initial three-year period

It is unlikely that the Council could secure a more favourable commercial

position by going out to market as providers are seeking to pass significant

risks onto clients because of the prevailing market conditions. This approach

would result in additional procurement and mobilisation costs and there is no

evidence that a replacement contract would offer better value.

None