Issue - decisions

Matter for Decision: Approval to carry out a procurement exercise for Building Cleaning Services.

 

Decision of the Executive Councillor for Customer Services and Resources

 

The Executive Councillor resolved to:

 

i.       Approve the carrying out and completion of a procurement exercise for Building Cleaning Services on the following basis:

 

·       A contract term of five years (with a provision to terminate at the end of year 3 if performance is inadequate) with an option to extend by up to two further years, if the contractor is performing satisfactorily and the service can be shown to continue to provide best value to the Council, giving a maximum possible contract length of 7 years

·       A three lot structure with bidders being given the opportunity to bid for one, two or three ‘Lots’, with a discount on the tender price if two or three ‘Lots’ are won by the same bidder to provide a balance between giving opportunities for SMEs to bid and achieving best value from the contract

·       A fixed price for the first two years of the term and thereafter index-linked to an appropriate index

·       A price/quality split of 40% price/60% quality

·       Incorporation in the contract of an incentive scheme to drive continuous improvement in the delivery of the service

 

       ii          Approve giving the Director of Business Transformation authority to take delegated decisions in consultation with Executive Councillor, Chair and Opposition Spokes as required during the procurement process, including the items detailed in e) to i) of paragraph 4.1 of the Officer’s report.

 

     iii          Make an in principle decision that the contract should include a condition requiring that at least the Living Wage is to be paid to staff delivering cleaning services to the Council. 

 

    iiii          Note an anticipated service start date of January 2015. Achieving this date depends on sufficient project resources being made available

 

   iiv          Request that Officers investigate the issue of bidders recognising Trade Unions and report back to the Chair and opposition Spokes on their findings.  

 

Reasons for the Decision: As set out in the Officer’s report

 

Any alternative options considered and rejected: As set out in the Officer’s report

 

Scrutiny Considerations:

 

The committee received a report from the Director of Resources. An updated Appendix A (Facilities Update) was circulated and is available via:

 

http://democracy.cambridge.gov.uk/documents/b7996/Building%20Cleaning%20Contract%20-%20Revised%20Appendix%20A%2020th-Jan-2014%2017.00%20Strategy%20and%20Resources%20Scrutin.pdf?T=9

 

In order to reinforce the Council’s commitment to its existing staff and to highlight the good work already done on the Living Wage, Councillor Cantrill proposed the following amendment to recommendation 2.3 of the Officer’s report (deletions struck though, additions in bold):

 

To make an in principle decision that decision about whether or not the contract should include a condition requiring that the Living Wage is to be paid to staff delivering cleaning services to the Council subject to the outcome of the further work referred to in para 4.2.12 of the Officers report.

 

In response to this proposal the Head of Legal Services said the following:

 

i.       The risk of a successful legal challenge by imposing a Living Wage requirement is very low, and would be minimised if the Council’s decision was based on best value and social value.

 

After further discussion, and with particular input from the Chair and Councillor Herbert, Councillor Cantrill’s proposed amendment was amended further to read (additions in bold):

 

To make an in principle decision that the contract should include a condition requiring that at least the Living Wage is to be paid to staff delivering cleaning services to the Council.

 

The committee agreed this amendment unanimously.

 

In response to member’s questions the Director of Resources said the following:

 

       i.          As part of the procurement process a detailed exercise would be done to identify, and remove, any internal overhead charges associated with the in-house provision.

     ii.          Agreed with members that the procurement process needed to be as open and transparent as possible.

   iii.          The option to terminate the contract at the end of year 3 if performance is inadequate is a standard contract ‘break’ clause. The Council would however build in ongoing monitoring to ensure that any under performance is picked up and addressed as it arises.

   iv.          It would be possible to build in a shorter formal ‘break’ clause but this would represent greater risk for any bidder and would be reflected in the price that they bid for the contract.

    v.          Whilst the Invitation to Tender (ITT) would look at this in more detail, and could impose financial penalties for poor performance, it is a careful balance. 

   vi.          The price/quality split suggested in 2012 was 60% price/40% quality – and it is now recommended to be 50% price/50% quality. It is however up to the committee to amend this if they see fit.

 vii.          A contractor’s current wage structure would not form part of the procurement process.

viii.          TUPE would apply to those Council staff eligible to transfer and their terms and conditions would be protected.

   ix.          The in-house Improvement Plan was put in place in January 2012 and was due to run up until the original procurement timetable of April 2013.The Improvement Plan looks at all aspects normally covered by a more traditional Service Review. 

 

In response to member’s questions the Head of Legal Services and the Strategic Procurement Advisor said the following:

 

ii.     Under certain economic, technical or organisational criteria any winning bidder would be able to amend their staffing structure.

 

Councillor Herbert highlighted the importance of any winning bidder recognising the Trade Unions. Officers agreed to investigate this further and report back to the Chair and opposition Spokes on their findings.  

 

Councillor Herbert proposed, and Councillor Cantrill seconded the following amendment to the price/quality split:

 

40% price/60% quality (instead of 50% price/50% quality)

 

In response to member’s questions the Director of Resources said the following:

 

       i.          This would not be an unusual price/quality split for this type of service contract.

     ii.          It would be hard to judge how this might affect the bids received.

   iii.          The procurement process would not be affected by this change, but the ‘weighting’ at the evaluation stage would be.

 

The committee agreed this amendment unanimously.

 

The committee resolved by 4 votes to 0 to endorse the amended recommendations.

 

The Leader approved the recommendation.

 

Conflicts of Interest Declared by the Executive Councillor (and any Dispensations Granted):

 

Not applicable.