Agenda item

[Report of the Director for Housing and Growth. To be introduced by the Cabinet Member for Corporate Resources and Insourcing.]

Approval to enter into a contract for the provision of Water, Wastewater & Ancillary Services for 4 years from April 2018 to March 2022 following a collaborative procurement exercise conducted by the LEP (London Energy Project) in accordance with the Councils Contract Standing Orders.

The Cabinet Member for Corporate Resources and Insourcing introduced the report and reflected on the impact of the privatisation agenda on monopoly industries such as water provision and the situation this had led to with de-regulation and the previous water supplier exiting the retail market and handing over water provision and water waste disposal for the borough to another supplier, Castle Water.

There was proposal to enter into a new contract for the provision of Water, Wastewater & Ancillary Services following a collaborative procurement exercise conducted on behalf of members of the London Energy Project (LEP) and NHS London Procurement Partnership and to award the contract to Anglian Water Business (National) Ltd trading as “Wave” for a period of two years. This would be with an option to extend for a further 2 years.

The Cabinet Member for Civic Serviceshighlighted some of the issues that a school, of whom she was a governor, had encountered with the current supplier and which had not yet been fully resolved. The Cabinet Member for Corporate Resources and Insourcing agreed to investigate progress on these issues.

Cllr Culverwell spoke about a live situation with the current water supplier at a school in his ward, concerning disposal of waste water. The Cabinet Member for Children, Education and Families provided assurance that she had already spoken with the Assistant Director for Schools and Learning on this matter and there had been agreement to complete the necessary water works in the October half term. The Cabinet Member for Children and Families would provide a further written response to Cllr Culverwell, after the meeting.

RESOLVED

1. To award the contract for the Provision of Water, Wastewater and Ancillary Services to Anglian Water Business (National) Ltd trading as “Wave” (on the basis that it represents best overall value for money, following a thorough evaluation of quality and price) as permitted under CSO 7.01(b) in accordance with CSO 9.07.1(d) for a total sum of £3.1m. The contract is for two years with an option to extend for another two years if needed.

2. To delegate authority to the Director of Housing, Regeneration, and Planning to undertake all necessary actions to enable the contract to be awarded to Anglian Water Business (National) Ltd trading as “Wave” under Lot 3 of the Crown Commercial Service (CCS) Framework Agreement RM3790. These actions are detailed within Appendix 2.

Reasons for decision

Under the Water Act 2014, Haringey Council are required to appoint a contractor for a Water Retailer and to do so in accordance with the Public Contracts Regulations 2015 (PRC 2015). This contract is required to deliver Water Supply and management of Waste Water.

The successful tenderer (Anglian Water Business (National) Ltd trading as “Wave”) submitted a bid that offered the best value to the Council. Together the LEP with the Council, are confident that this retailer has the capability to deliver the services to the required standard.

The successful tenderer showed a good understanding of the services required by the Council. The contract value is £3.1m covering the supply of water and wastewater and an ancillary service to reduce water demand. It covers a maximum of four years. This will be delivered on an existing procurement framework managed by the Crown Commercial Services (CCS) (Lot 3 RMO3790)

Alternative options considered to secure best value

Do Nothing

Castle Water are the default water and waste water company (retailer) responsible for water billing and administration.

Even if the Council was minded to remain with Castle Water, the Public Contracts Regulations 2015 (PCR 2015) dictates that authorities are required to conduct a competitive process to select a retailer for water and waste water services.

For the Council to run its own full tender and appoint its own supplier

The option of an individual authority conducting its own tender or mini-competition was not recommended because the risks and costs of running this tender exercise, including the use of staff resources to write a service specification and conduct a tender exercise, are not commensurate with potential benefits of retailer service efficiencies and savings.

Pan LEP route (Preferred and actioned)

The recommended option was to join the LEP Team who would manage (at no additional cost) a pan-LEP mini competition for all LEP members to access a single retailer through a Central Purchasing Body (CPB) framework. This would be run on the basis that a CPB framework for water provides a reasonable route to market at an affordable price for service. All LEP authorities’ portfolios will be competed together via a CPB framework, with each authority having its own call-off contract.

The key reasons for this were:

·         the pan-LEP aggregated customer base is both attractive and prestigious for suppliers, meaning retailers responded with high quality, well priced bids;

·         the resource any CPB can afford to dedicate to a large aggregated tender is greater than Haringey Council could provide;

·         a single retailer for water would not restrict market competition and will deliver greater benefits than multiple retailers, for example a dedicated customer service management function, technology deployment trials, flood and drought protection support services;

·         retailers have vastly differing capabilities in core business functions, such as consolidated billing and online portfolio, account and query management platforms, therefore these aspects must be tested as part of the mini-competition process and the quality/price ratio must be appropriate for the competitive price differential vs potential for savings through efficiency gains; and,

·         LEP team managed the full tender process (the service specification, mini-competition, evaluation process, oversee pre-contract set-up and manage the strategic retailer relationship).