Archived decisions

HAMPSHIRE COUNTY COUNCIL

Decision Report

1. Executive Summary

1.1. The purpose of this paper is to seek approval for single tender extensions of the existing block Older People and Physical Disabilities contracts to allow for service types to be clustered together with simultaneous end dates. This will allow the like services to be strategically commissioned and tendered as either one contract or in groups.

1.2. The Personalisation agenda requires faster and more flexible approaches to commissioning and contracting. These proposals will assist Adult Services to enable the changes required with our providers, in a more timely and systematic way.

2. Contextual information

2.1. As of 1 April 2009, there are 93 contracts for Older Person and Physical Disabilities services in place. The overall value of these contracts is £6,795,519 per annum.

2.2. EU procurement regulations dictate that, most contracts will now have to be competitively tendered. In order to manage this increased workload and to achieve improved procurement practice and back-office functions, it is proposed that a tendering strategy is implemented. This will enable contracts to be grouped together according to service type and tendered as a group.

2.3. This approach will enable services to be reviewed on a county-wide basis at least six months prior to the tender starting, to determine appropriateness of service and level of need. It will provide an opportunity to reconfigure services, to modernise services, to meet current need and to provide equitable services across the county.

2.4. The groups of contracts will be tendered over a two year period from 2010 to 2012. Extensions are requested for 93 of the current contracts in order to implement the proposed tender and review programme for 2010-2012. There are 18 clusters identified. The clusters will be made up of the following services: Advocacy, Carer Support, Benefits Advice, Information Services, Meals Services, Nursing and Residential (including Time To Think), OT Services, Cleaning, Day Services, Direct Payments, Domiciliary Care, Respite Services, Take a Break, Home Help, Home Check, Community Support and 3 uncategorised contracts forming one cluster. Where joint funding is in place, written confirmation from partner commissioning agencies to extend the contracts will be sought. This will allow sufficient time for reviews and tendering. The first round of reviews would commence in early 2010.

2.5. The contract values remain the same.

How the Clusters will fit within the Hampshire Model

2.6. The tender programme will be made available to all potential service providers through a public web page on "Hantsweb". This will provide transparency to the tendering process and enable providers to plan ahead for the preparation of their tender submissions.

2.7. Training and support on tendering processes will be provided to the Voluntary Sector, particularly the smaller specialist organisations to enable them to compete with regional or national organisations throughout the tender process.

3. Finance

3.1. In order to align contract expiry dates for the proposed contracts tender schedule, contract extensions will be required for 93 contracts with an annual value of £6,795,519. This report seeks authority to extend contracts that expire between December 2009 and September 2012. This exercise will be cost neutral as there will be no increase to the current contract value.

3.2. Details of the proposed review schedule are confidential and as such are set out in the Confidential Appendix 1. This shows the extensions required and values of individual contracts.

3.3. Savings:

Cashable: Advertising costs should be reduced by placing a single advertisement for a group of contracts. The average cost for advertising a tender is approximately £1,500. With the proposal to group the services together we would see the number of tenders reduce from potentially 93 to18. This could potentially save £112,500 over the period of the review. If approval is given for this proposal, further work will be undertaken to establish the timings of the saving and to incorporate them into budget preparations for the period 2010/11 to 2012/13. It is anticipated at this stage that the majority of the savings will occur after 2010/11.

Non Cashable: Operational, Commissioning and Contracts time would be more efficiently used, which will enable a strategic review of services to be carried out.

4. Performance

4.1. By implementing this proposal the contracts team will deliver improved procurement, improved back office functions, improved transactional services and increased productive time. Contract Support Officers' time can be better managed due to each Contracts Support Officer being assigned a tender to manage.

4.2. Commissioners and Operational staff will be able to take a strategic approach to reviewing service types which will allow greater planning of workloads within the department and respective teams.

4.3. Under the current approach Adult Services would be tendering 93 contracts between 2010 and 2012. By synchronising like services the number of tenders would be reduced to 18 (although each tender may result in more than one contract).

4.4. By implementing this proposal it will be possible to achieve economies of scale when purchasing services, and we will not be putting further pressure on providers due to the reduced number of tenders that Adult Services will need to run.

4.5. An increase in productive time will be achieved through standardising and simplifying the review and tendering processes. Currently, there are no standard procedures in place and processes vary considerably between localities and services. It is planned to develop pro-formas and procedures to support the review and tender processes. This should lead to a reduction in staff time currently being used to devise and implement individual service tenders and reviews.

4.6. Further reduction in workload in the use of staffing resources in the legal team and the contracts team should be achieved where several small contracts are awarded to a single provider and can be grouped together into a single contract.

4.7. Advertising costs should be reduced by placing a single advertisement for a group of contracts. The average cost for advertising a tender is approximately £1,500. With the proposal to group the services together we would see the number of tenders reduce from potentially 93 to 18. This would potentially save £112,500.

5. Single Tender

5.1 The proposal meets the Single Tender Criteria as it is an interim measure whilst a strategic review is undertaken.

6. Other key issues

6.1. The Personalisation agenda requires faster and more flexible approaches to commissioning and contracting; these proposals will assist Adult Services to enable the changes required with our providers, in a more timely and systematic way.

6.2. The development of the market to underpin personal choice is key to the strategic shifts in service delivery, as outlined in the Hampshire Model. These procurement changes will provide procurement staff the opportunity to align strategic intent with operational delivery.

6.3. Providers will have a clear timetable of change in line with the role out of Self Directed Support and will therefore be able to prepare themselves for new ways of working.

7. Risk/Issues

7.1. Risk: Although the department has operated with the existing approach to individually tendering existing services as they expire, it is at risk of allowing inequity between areas to continue.

Resolution: By strategically reviewing the block contracts on a county wide basis it will ensure that any gaps in service provision will be addressed.

7.2. Risk: Without a strategic approach to reviewing and tendering, the Department may not be able to fully resource reviews which could result in services not being fit for purpose, or single tenders being requested to roll on a contract for a further 12 months at a time. This practice is no longer accepted by Legal as a legitimate reason to single tender.

Resolution: Commissioners and Operational staff will be able to take a strategic approach to reviewing service types which will allow greater planning of workloads within the Department and respective teams.

8. Future direction

8.1. By implementing this proposed tendering strategy Adult Services will be able to manage the process of reviewing and tendering efficiently. With reviews being undertaken in advance of a tender, the Department will be able to establish if the service being reviewed is still strategically relevant, or able to incorporate Personalisation/SDS within the current service specification.

9. Recommendations

9.1. That the Executive Member gives approval to implement the proposed tendering strategy for Older Persons and Physical Disabilities services.

9.2. That the Executive Member gives approval to extend through Single Tender Criteria the 93 contracts for Older Person and Physical Disabilities services in accordance with the proposed tender schedule for December 2009 to September 2012 set out in Appendix 1 (confidential appendix). The extensions will allow for like services to be aligned within their cluster as well as sufficient time to review and tender.

CORPORATE OR LEGAL INFORMATION:

Links to the Corporate Strategy

IMPACT ASSESSMENTS:

1. Equalities Impact Assessment:

1.1. In preparing this report, account has been taken of the requirements of the Corporate Equalities Plan and Race Scheme. The contracts will ensure that the provider will perform their duties with due regard, to eliminate unlawful discrimination and to promote equality of opportunity for all people and to promote good relationships between different racial groups.

2. Impact on Crime and Disorder:

2.1. The County Council has a legal obligation under Section 17 of the Crime and Disorder Act 1998 to consider the impact of all decisions it makes on the prevention of crime:

No Impact.

3. Climate Change:

a) How does what is being proposed impact on our carbon footprint / energy consumption?

As part of the strategic review, services will have to, as a requirement of the service specification, evidence how they reduce their transport requirements and lessen the impact on our carbon footprint

b) How does what is being proposed consider the need to adapt to climate change, and be resilient to its longer term impacts?

Consideration will be given in the longer term to reduce transportation and energy costs.