Agenda item

RESOLVED: Cabinet;

1.     Approved the re-procurement of the facilities management service and maintenance contracts as set out in the report.

REASONS:

·       To ensure that the Council complies with statutory and regulatory duties.

·       To ensure that Council properties are safe and fit for use.

·       Maximising cost-effectiveness.

·       To minimise depreciation of Council assets

·       Provide customers and staff of the Council with buildings which are fit for purpose and welcoming.

ALTERNATIVE OPTIONS:

1.     Insourcing of the service. Insourcing decisions are often made to obtain control of a critical production or competency; conversely outsourcing decisions are often made to reduce ‘noncore’ in-house operations and to reduce some costs, typically by taking advantage of specialist providers, the ability of supplies to aggregate demand and thus produce economies of scale, competitive market forces, and by reducing employment costs. Insourcing can make sense in some cases, notably where the Council has sufficient demand to sustain a level of staffing and expertise in the services in question, and when quality of outsourced provision hard to control. However, the existing contracts for these services have generally operated well, and insourcing would be likely also create significant new costs associated with pension liabilities.

2.     Disaggregation of the contracts into small lots. The current  rocurement strategy relies on aggregating all specific service contracts requirements into single contracts with single specialist suppliers for each field. This is in order to attract the greatest commercial interest from the market and obtain additional value and/or reduce cost through efficiency of scale, and minimise the administrative burden on the Council. This approach has previously attracted significant market interest and has provided exceptionally competitive rates. A disaggregation would increase the time and processes requirement for administration of the contracts and is Page 302 likely to increase the contract costs too, particularly for small remote sites. It is considered it strikes the right balance between the different levels of packaging services.

3.     Aggregation of the contracts into one or a small number of multi-service contracts. To deliver such an aggregated service is likely to require the principal provider to let a number of subcontracts for specialisms. As outlined above, it is considered that the proposed set of contracts enables specialist suppliers to bid, without the overheads which come from having a large entity seeking to co-ordinate the units actually providing services. The division into specialist areas also increases the potential for bids from small and medium businesses (‘SMEs’) and local suppliers.

4.     Use of a Council-owned or jointly-owned entity (e.g. West Northamptonshire Norse Limited). These are traditionally known as Teckal companies, after the exemption in public procurement law which allows direct awards to entities controlled by a body such as the Council. This falls somewhere between the insourcing and outsourcing options, having benefits such as on pension liabilities and potential for profit generations from third parties, but without the competitive pressure of a procurement. It would take time and staff resource the Council does not currently have to pursue this approach at this time. It is intended that it would be considered during the life of the contracts proposed to be procured.

CONFLICTS OF INTEREST DECLARED AND DISPENSATIONS GRANTED: None

At the Chairman’s invitation Councillor Malcolm Longley presented the report copies of which had been previously circulated. The committee was informed that there were many contracts coming together and that WNC were keen to get the best option.

A councillor made the following comments.

·         There had been no mention of the analysis of cost consequences.

·         Social value and climate impact had not been mentioned in the report.

Councillor Adam Brown noted that the National Insurance rise would impact the council financially.

RESOLVED: That Cabinet; approved the re-procurement of the facilities management service and maintenance contracts as set out in the report