Agenda item

Report of the Head of Highways, Capital Development & Waste (HCW/16/67) on the procurement process for awarding a new Highways Term Maintenance Contract, for services currently provided by South West Highways,attached. 

(Councillors Brazil, Connett, Julian and Westlake attended in accordance with Standing Order 25(2) and spoke to this item).

The Cabinet considered the Report of the Head of Highways, Capital Development & Waste (HCW/16/67) on the background to, process for and evaluation of tenders for procuring and/or awarding a new Highways Term Maintenance Contract. The Council’s current Highways Term Maintenance Contract was being provided by South West Highways and was due to expire in March 2017.  

The Head of Services’ Report referred to the decisions previously made relating to continued delivery of the service and outlined the procurement process leading to this stage to secure the best overall tender and his recommendation that the next Highways Term Maintenance Contract should be awarded to the successful tenderer for the period 1 April 2017 to 31 March 2024, with extension options to 2027.   Independent assurance had been received to confirm that the procurement process had been robust and that current procurement regulations for selecting tenderers, compiling contract documents, negotiating with tenderers and tender evaluation had been strictly adhered to, to ensure best value.

The Head of Service reported that the new contract had been designed to reflect research on industry best practice and experience and learning over recent years so as to ensure that the new contract provided both value for money and a good service to Devon’s communities and users of the local highway network.  In producing the contract documents, use had also been made of documentation from the Highways Maintenance Efficiency Programme, a Department for Transport funded and sector led transformation programme.

The Cabinet had previously decided that, to benefit from collaborative working, the Term Maintenance Contract should be jointly procured with Plymouth City Council and Somerset County Council. Whilst joint authority working had therefore been an essential part of the new contract, it had also been agreed that to enable partner authorities to work together without any loss of autonomy, procurement should be for three separate lots resulting in three separate but aligned contracts - one for each Council’s administrative area - rather than a single combined  contract.  Tenderers were therefore permitted to submit bids for one or more than one lot, resulting in one or more possible multi-lot bids. Each Council would however, ultimately, have its own specific contract. Moreover, any multi-lot bid could ultimately only be awarded if all affected Councils were to independently agree to award such a contract and, in line with the principles agreed at the outset of the process, that any such ‘multi-lot’ bid could only be accepted where it would place a Council in a better position than it could have achieved on its own.

Members were advised that the three Councils had chosen to follow the procurement procedure known as ‘Competitive Procedure with Negotiation’ which would enable individual Councils to award the contract for its area after initial tenders had been received, if each so chose.  This process had been followed as it was well suited to meeting the needs of highway authorities in procuring complex, long term maintenance contracts, enabling  optimisation of tenders with ideas and initiatives being explored in negotiations involving the client and tenderers, before making changes to the final contract documents. This process  enabled Councils to talk directly to each tenderer, which had ultimately proven beneficial in refining the contract and achieving best value.

The Cabinet acknowledged that the Place Scrutiny Committee had also been closely involved with the overall process and had considered relevant issues on a number of occasions particularly  in relation  to timescales for the procurement, the Procurement procedure itself and the evaluation methodology.

The Head of Service’s Report also incorporated an Impact Assessment relating to the possible impacts of the proposal, which had been circulated previously for the attention of Members at this meeting in order that as part of its determination of the next steps in the process the Cabinet might have full regard to the responsibilities placed upon it to exercise its Public Sector Equality Duty, under s149 of the Equality Act 2010, where relevant.  That Assessment recognised that potential equality issues had been addressed through mitigation measures within the contract and that, consequently, there were no particular equality issues arising from the impact assessment.  The successful contractor would be bound by standard equality clauses in the contract to ensure it did not discriminate against staff or service users unlawfully.  The nature of the Cabinet’s decision – which was simply to select the tenderer to provide the service – would not have any impact on service levels or policies, for which a separate Impact Assessment would be required/produced.  Members endorsed the view that there were no foreseeable negative impacts arising from the proposed award.

The Chairman, on behalf of the Cabinet and Members of the Council, publicly stated his  appreciation of the efforts of all those staff involved in the undertaking of and completion of this  major procurement exercise.

It was then MOVED by Councillor Hart, SECONDED by Councillor Hughes, and

RESOLVED that the press and public be now excluded from the meeting during subsequent discussion on this matter under Section 100(A)(4) of the Local Government Act 1972 on the grounds that it involved the likely disclosure of exempt information as defined in Paragraph 3 of Schedule 12A of the Act namely, the financial or business affairs of current providers, tenderers for the provision or supply of council goods or services and of the County Council and partner organisations, and in accordance with Section 36 of the Freedom of Information Act 2000, by virtue of the fact that the public interest in maintaining the exemption outweighs the public interest in disclosing the information.

[NB: The following part of the Cabinet’s proceedings on this matter took place, as summarised below, in accordance with the Local Authorities (Executive Arrangements) (Meetings and Access to Information) (England) Regulations 2012 and, with the consent of the relevant Scrutiny Committee Chairman, under Section 100A(4) of the Local Government Act 1972 during which the press and public were excluded; no representations having been received to such consideration under Regulation 5(5) of the aforementioned Regulations].

The Cabinet then considered the Report of the Head of Highways, Capital Development & Waste (HCW/16/68) on the proposed award of contract, outlining all relevant financial issues, and recommending the acceptance of the highest scoring tender capable of acceptance for the new Highways Term Maintenance Contract, which was welcomed by all Members present.

Following discussion of Report HCW/16/68 and having had regard to the information therein,  the Cabinet was of the view that the press and public need no longer be excluded from the meeting during its final determination of the matter and:

It was then MOVED by Councillor Hart, SECONDED by Councillor Hughes, and

RESOLVED that the press and public be now readmitted to the meeting. 

Following further comment and discussion and in replying formally to the debate the Cabinet Member for Highway Management & Flood Prevention commended the recommendations now before the Cabinet.

The matter having been fully debated and the options and/or alternatives and other relevant factors (e.g. financial, risk management, equality and legal considerations) set out in the Head of Service’s Report and/or referred to above having been considered, and balancing all of those factors and comments made at the meeting: 

It was then MOVED by Councillor Hughes, SECONDED by Councillor Hart,  and

RESOLVED

(a) that approval be given to the contract award for the Council’s new Highways Term Maintenance Contract;

(b) that the County Council’s Highways Term Maintenance Contract be awarded to Skanska Construction UK Limited,  as a single lot bid for the County Council (for the period 1 April 2017 to 31 March 2024, with extension options to 2027);

(c) that the County Solicitor be authorised to execute all necessary legal agreements required to be entered into by the Council in respect of this contract;

(d) that collaborative work continue with Plymouth City Council and Somerset County Council and their contractor(s).

[NB: The Impact Assessment referred to above may be viewed alongside Minutes of this meeting and may also be available at:  http://new.devon.gov.uk/impact/].