Hampshire County Council

Buildings, Land and Contracts Panel Item

26 March 2003

Executive Member for Policy and Resources

10 April 2003

County Supplies - Contracting Activity

Report by the Director of Property, Business and Regulatory Services

(Summary of CONFIDENTIAL decision)

1

Summary

1.1

The following decisions are sought:

That subject to the views of the Buildings, Land and Contracts Panel approval be given to:

(i) The list of forthcoming contracts for the period up to 1 May 2004 as

detailed in Appendix 1.

(ii) The award of non-education cleaning contracts to the four contractors as

detailed in paragraph 3.7, with effect from 5 May 2003 for 3 years.

2

Reason(s)

2.1

To enable the contracting activities of County Supplies for the next 12 months to proceed and contracts for the cleaning of non education sites to be formed.

3

Other options considered and rejected

3.1

None.

4

Conflicts of interest declared by the decision-maker or a member or officer consulted

4.1

Not applicable

5

Dispensation granted by the Standards Committee

5.1

Not applicable

6

Reason(s) for the matter being dealt with if urgent

6.1

Not applicable

Approved by:

..........................

Date of decision:

.........................

Councillor T K Thornber

Hampshire County Council

Buildings, Land and Contracts Panel Item

26 March 2003

County Supplies - Contracting Activity

Report by the Director of Property, Business and Regulatory Services

(Confidential)

Not for publication by virtue of Paragraph 9 of Part I of Schedule 12A

of the Local Government Act 1972

1

Introduction

1.1

This report seeks the Panel's endorsement to the contracting activity of County Supplies in the next 12 months and the award of nine non education cleaning contracts for a three year period commencing 5 May 2003.

2.

List of Forthcoming Contracts

2.1

The programme of work expected to be undertaken in the period up to May 2004 is listed in Appendix 1. In practical terms, few of these contracts are linked to one-off purchases or projects. Most are framework arrangements that are required to service the ongoing requirements of large numbers of budget holders for routine goods and services. Around one-quarter of the total relate to site specific arrangements for cleaning and catering, and contracts made on behalf of external customers.

2.2

Where the best overall offers are to be accepted, the contracts will be arranged by the Chief Executive or the Director of Property, Business or Regulatory Services as appropriate. Where the recommendation is to award a contract to other than the best offer, the delegated powers set out in the Constitution will be applied and decision taken at the appropriate level. For contracts other than the lowest this would involve the Leader.

2.3

A number of the arrangements described in this report refer to the Central Buying Consortium (CBC), of which the County Council is a member. The aim of CBC's joint purchasing activity is to secure the economies of scale through the aggregation of requirements and to reduce the burden of public sector tendering and contract administration on suppliers. County Supplies conducts some 25% of its purchasing activity through CBC (some £17 million annually) and in such cases the award of contracts is jointly agreed by the purchasing staff of all participating authorities and the `master agreement' is let in accordance with the constitution/standing orders of the lead authority. The principles under which the County Council participates in the CBC were reported to and approved by the former Buildings, Grounds and Contracts Panel.

2.4

Several high value contracts will be tendered over the next year, including:

· the supply of gas £3.5m

· heating oils and fuels £4m

· large site electricity contracts £2.6m

· IT equipment £4.2m

· recruitment advertising £0.9m

· office furniture and seating £1.1m

2.5

As previously reported, County Supplies is also seeking to establish corporate contracts for the supply of agency staff and proposals for this are currently being developed. It is anticipated that the new arrangements will be in place by October 2003.

2.6

The list of planned work also includes new contracts for the supply of school uniforms and the catering facilities for the Gosport Discovery Centre.

3.

Non Education Cleaning Contracts

3.1

The existing contracts for the cleaning of non-educational buildings are due to expire on 4^th May 2003. Tenders have been invited for new three year contracts to take effect from 5^th May 2003, for the cleaning of the interiors of 132 buildings including offices, libraries, day centres and fire stations throughout Hampshire.

3.2

The configuration of each parcel of work is geographically based and

Bro broadly follows that used in previous tender exercises. One significant

change however, is the removal of all County Council HQ buildings from

this tender exercise as these sites have reverted to an in-house arrangement.

The cleaning service in these buildings will continue to be provided by staff employed directly by PBRS.

3.3

Tender invitations were sent to thirteen companies of which twelve submitted bids for all or some of the areas.

3.4

Over the past five years the cost of building cleaning has been increasing at

a dramatic rate. This follows increases in rates of pay in order to attract

and retain cleaning staff. At the same time standards have become erratic

and in some cases very low-cost contracts have resulted in operational

difficulties, requiring a high resource input from the Council to resolve

poor performance.

3.5

In order to minimise the risk of these problems occurring, the policy adopted when assessing tenders has been to use a range of criteria with particular emphasis on proven track record, and spreading risk whilst encouraging new companies to participate in Council contracts

3.6

This tender assessment process has been complex and has required tenderers to re-assess their bids in the light of potential financial burdens from transferring staff at unknown costs. The recommended contract awards detailed below offer operationally sound proposals for the Council whilst minimising risks to the contractors. There is a spread of work, albeit not on the most ideal basis, but nevertheless supported by a confidence in Diamond and N.Viro both of whom have a long-standing and good track record with the Council.

3.7

The summary below identifies the relationship between current costs, lowest tendered costs and the cost of the recommended contract awards

Area

Current Cost

£pa

Lowest tendered Cost

£pa

Recommend Contracts Award Cost £pa

Basingstoke

90,494

110,452 - Diamond

110,452 - Diamond

Aldershot

68,537

85,648 - N.Viro

85,648 - N.Viro

Fareham & Gosport

96,716

93,789 - N.Viro

116,650 - Diamond

Havant & SE Hants

107,272

107,719 - N.Viro

109,211 - Diamond

East Hampshire

52,038

52,470 - N.Viro

57,337 - Diamond

Romsey & Eastleigh

110,389

105,424 - Diamond

107,025 - N.Viro

SW Hampshire

107,862 *

132,344 - N.Viro

132,344 - N.Viro

Andover

37,554

42,320 - Diamond

42,760 - Shaw Porter

Winchester

40,397 *

40,775 - N.Viro

46,343 - KGB

Total

711,259

770,941

807,770

Difference from current

+ 59,682

+ 8.4%

+ 96,511

+ 13.6%

3.8

The lowest tendered options would involve the award of contracts to just two companies. This is not a desirable or feasible outcome. A summary of the recommended award by tenderer is shown below:

Lowest Tendered Option

Recommended Option

N.Viro

£512,745 67%

Diamond

£393,650 49%

Diamond

£358,196 33%

N.Viro

£325,017 40%

KGB

£46,343 6%

Shaw Porter

£42,760 5%

£770,941

£807,770

Recommendations

That:

The Panel advise the Executive Member for Policy and Resources that approval be given to:

1

The list of forthcoming contracts for the period up to 1 May 2004 as detailed in Appendix 1.

2.

The award of the non education cleaning contracts to the four contractors as detailed in paragraph 3.7 with effect from 5 May 2003 for three years.

Below are listed those contracts that are expected to be awarded over the next 12 months.

Title

Approximate

annual value

£'000

Date

(a) Contracts having a whole life value of less than £75,000

Desk Top Plastics (CBC)

20

1.06.03 #

Comb Binding Accessories (CBC)

6

1.07.03 #

Office Dictation Machines (CBC)

8

1.09.03

Hire of Mobile Gas Heaters

5

1.09.03

Coroners Removals (Central Division)

8

1.09.03

Wood Packs & Balsa (CBC)

1

1.09.03 #

Maintenance of Microwave Ovens

2

1.10.03

Maintenance of Sewing Machines

20

1.10.03

Suspended Filing (CBC)

10

1.12.03 #

Education Year Diaries (CBC)

3

1.01.04 #

Catalogue Distribution

13

4.03.04

Calendar Year Diaries

14

1.04.04

Window Cleaning - Non-Educational Sites

14

1.04.04

(b) Contracts having a whole life value exceeding £75,000

Cleaning - Fairfield Primary School

20

1.05.03 *

Office Fastenings (CBC)

26

1.05.03 #

Classroom Chairs (CBC)

185

1.05.03 #

Title

Approximate

Annual Value

£'000

Date

Educational Plastic Storage Trays (CBC)

22

1.05.03 #

Black Waste Sacks (CBC)

51

1.06.03 #

Testing and Maintenance of Hoists

20

1.06.03

Staplers, Staples and Punches (CBC)

29

1.06.03

Cleaning - Bohunt School

67

1.06.03 *

Tea, Coffee & Hot Beverages (CBC)

75

1.06.03 # +

Testing & Maintenance of Laundry Equipment

60

1.06.03

Glue Sticks (CBC)

90

1.06.03 #

Book Covering Film (CBC)

64

1.06.03 #

Recruitment/Public Notice Advertising -

Eastleigh Borough Council

100

1.07.03 **

Library Shelving

100

1.07.03

Recruitment Advertising

900

1.07.03

Cleaning - Crestwood School

45

1.07.03 *

Staging (CBC)

40

1.07.03

Data Preparation Services

45

1.07.03

Catalogue Publishing (CBC)

100

1.07.03

Art Brushes (CBC)

40

1.07.03 #

Cleaning - Alton College

72

22.07.03 **

Cleaning - Fareham College

160

1.08.03 **

Cleaning - South Downs College

133

1.08.03 **

Maintenance of Audio Visual Equipment

80

1.09.03

Cont . . .

Title

Approximate

Annual Value

£'000

Date

Payslip Advertising

100

1.09.03

Theatre Lighting

50

1.09.03

Transport - Barton Peveril College

275

1.09.03 **

Cleaning - Alderman Quilley

45

1.09.03

Cleaning - Brockenhurst College

100

1.09.03 **

Catering - Basingstoke Sports Centre

145

1.09.03 **

Catering - The Clere School

75

1.09.03

Catering - Wyvern School

179

1.09.03 *

Catering - Portchester School

85

1.09.03 *

Catering - Hamble School

115

1.09.03 *

Catering - Mountbatten School

120

1.09.03 *

Catering - Yateley School

142

1.09.03 *

Catering - Warblington School

90

1.09.03*

Catering - Mill Chase School

97

1.09.03 *

Binding and Laminating Machines CBC)

160

1.09.03 #

Yoghurt (CBC)

44

1.09.03 # +

Office Desking & Seating (CBC)

1,100

30.09.03 #

Fresh Meat

50

1.10.03

Bakery Items

50

1.10.03

Cartridge Paper (CBC)

30

1.10.03 #

Thin Client Devices

200

1.10.03

Title

Approximate

Annual Value

£'000

Date

Floor coverings (CBC)

60

1.10.03 #

Tyres & Tubes (CBC)

50

1.10.03 #

Rulers & Drawing Equipment (CBC)

22

1.10.03 #

Electricity - Large Sites

2,600

1.11.03

Agency Staff

5,000

1.10.03

Heating Oils and Fuels

4,000

1.11.03

Gas (CBC)

3,500

1.11.03 #

Pencils (CBC)

104

1.11.03

Classroom Storage (CBC)

100

1.11.03 #

Residential Furniture (CBC)

200

1.11.03 #

Catering Equipment

350

1.12.03

Mobile phones - residual (CBC)

125

1.12.03 #

Hand Tools and Sundries (CBC)

50

1.12.03

Plastic Houseware (CBC)

15

1.01.04

Grounds Maintenance -Thornden school

18

1.01.04 *

Personal Computers (CBC)

4,200

1.01.04

Meals on Wheels - Services

100

1.01.04

Grounds Maintenance - Kings' School

22

1.01.04 *

Cabinet Roller Towels

27

1.01.04

Grounds Maintenance - 17 Geographical Areas

900

1.01.04

Title

Approximate

Annual Value

£'000

Date

Computer Printers (CBC)

650

1.02.04 #

Sandbags

30

1.02.04

Grounds Maintenance - Fort Nelson

17

1.03.04

Cleaning - Queen Mary's College

75

1.03.04 **

Library Books (CBC)

1,000

1.04.04 #

Flour Based Mixes (CBC)

140

1.04.04 # +

Streetlighting Electricity (CBC)

2,000

1.04.04 #

Work Uniforms

50

1.04.04

School Uniforms

300

1.04.04

PVC Accessories (CBC)

34

1.04.04 #

Personal Protective Equipment

100

1.04.04

Dry Wipe Markers (CBC)

70

1.04.04 #

Testing & Maintenance of Fire Fighting

Equipment

150

1.04.04

Catering - Haven Visitors Centre

40

1.04.04

Drug Drop-In Centre

75

1.04.04

Milk and Morning Goods

350

1.04.04

Catering/Shop - Gosport Discovery

Centre

120

10.04.04

Maintenance of PE Equipment

55

1.05.04

Confectionery

50

1.05.04

Dividers (CBC)

22

1.05.04 #

Prepared Sandwiches

100

1.05.04

Vending Machines - HQ Buildings

50

28.05.04