Agenda item

To receive and consider a report from the Director of Law and Governance outlining details of a call-in received on the PortfolioDecision taken on ESPO Framework 664-117 Contract Awards (Report No. 222)

The decision that has been called in was a Portfolio Decision taken on 26 March 2019 and included on the Publication of Decision List No: 58/18-19 (List Ref:1/58/18-19) issued on 26 March 2019.

It is proposed that consideration of the call-in be structured as follows:

· Brief outline of the reasons for the call-in by representative (s) of the members who   have called in the decision

· Response to the reasons provided for the Call-in by a Cabinet Member responsible for taking the decision

· Debate by Overview and Scrutiny Committee and agreement of action to be taken

Please also see the Part 2 agenda

The Committee received a report from the Director of Law and Governance outlining details of a call-in received on the Portfolio decision taken by the Leader on -ESPO Framework 664-117 Contract Awards (Report No:222).

NOTED that this report was considered in conjunction with the information in the part 2 agenda. All discussion was held under the part 1 section of the agenda.

Councillor Levy reminded everyone that discussion on the call-in should be about the specific reasons for call-in given in the papers and response to this.

The Chair invited Councillor Smith to outline the reasons for call-in.

Councillor Smith said he was not criticising the report but the outcome from the procurement process. 

He highlighted his concerns as follows:

1.    That only one bid had been received for the provision of multi-disciplinary planning and design services over the next four years at Meridian Water. Value for money for this was not demonstrated.

2.    The report describes the procurement process employed. The decision was made to use the ESPO Framework (Eastern Shires Purchasing Organisation), with a ‘Lot selection’ (Lot 8g) applied for the services we required. He explained that other frameworks could have been used. Of the ten companies who could have been approached to tender for this work from the framework he anticipated that four or five would be interested and he thought they should have been spoken to by one of our senior representatives to determine their interest. From this we should have been able to determine whether the ‘Lot’ we had applied was appropriate or whether another should have been used.

3.    Only four weeks was given for bidders to respond to this multi-disciplinary planning and design service and the field invited to tender was too large for the firms to have a realistic chance of success.

4.    The parent company in the US of the successful bidder had been in various contractual disputes with the US Government and others. It was questioned whether the Leader would have been aware of this fact, when she took this decision. It was thought this should have been a consideration when deciding to award the contract.

Councillor Smith said he thought the procurement system used appears to be flawed, the arrangements used should be reviewed as it appears that the only opportunity to scrutinise decisions of this kind is through the call-in process.

Responses given were provided by Sarah Cary, Peter Alekkou and Lisa Woo as follows:

1. When considering the aspect of ‘value for money’ it is not only the financial details but also efficiency that should be shown. In August we had looked at using a multi- disciplinary approach, to work across a range of projects.
2. In September 2018 the Council invited tenders from all Service Providers contained within Lot 8g ‘Regeneration and Regional Development’ to submit a tender, except for those who had requested to be excluded from the tender. Of the 10 appropriate suppliers, five had confirmed their interest.
3. The four weeks given for bidders is not unusual, sometimes a period of two weeks can be given. A set- time period would not have been given without having a dialogue with bidders first.  Of the bidders, five said they were interested and three that they were not. Sometimes bidders might ask for us to extend the deadline but in this case they did not.  Afterwards we contacted those that had not tendered.  The main reasons given for not tendering were that they were unable to take on further commitments and that they did not have the required resources for the project.
4. It was confirmed that a rigorous evaluation process had been undertaken.
5. In answer to a question from the Chair it was confirmed that all service providers including the winning bidder on the ESPO framework, are governed by UK and EU Public Contract Regulations.

Other points discussed included:

1. Councillor Rye said it was unfortunate that the person who had made this decision was not at the meeting. He was happy with the four weeks that had been given for bids to be received but as a figure of 4% above the market rate had been mentioned, he did not feel that we had demonstrated value for money had been given. Sarah Cary stated that we were happy to tolerate figures given.
2. The parent company is in the USA and the bidding company is an operational company based in the UK. The state of litigation of the parent company was not relevant for us in determining the winning bidder. Whilst Sarah Cary did not think the Leader would have been aware of litigation in respect of the parent company, she said that this was not relevant.
3. Cllr Hockney asked if the ‘break clauses’ quoted for the contract were unilateral and could be brought about without reasons given. It was confirmed that this was the case.  It was also confirmed that the scope of the contract was refined by us at an early stage.
4. It was asked if the value of the contact quoted was based on a fixed price element – an answer was given that it was based on day rates. Our teams had come together to look at the services we may require for the future, it would be ‘needs driven’.
5. It would be possible to use our ‘in house’ people more in future as we are building capacity. The contract would be useful in this respect.
6. It was asked if the UK company had been in any disputes such as those mentioned for the parent company, it was thought this was unlikely as they remain on the ESPO framework.
7. In answer to a question as to whether it was considered that we should have a re-bidding process as only one bid had been received, an answer was given that the framework agreement allows us to take just one bidder if we think it acceptable and value for money.
8. Confirmation was given that officers considered the framework used was appropriate for our needs. 
9. Councillor Hockney requested that a copy of the day rates quoted would be sent to him. 
10. It was confirmed that the decision to retender would not be taken lightly as it may deter all bidders.

Councillor Smith was asked to summarise, which was as follows –

He said whilst it is not a crime to have a single bidder, it is not ideal and

although an interesting discussion had been held, it is not clear why, if the council went to the trouble of contacting all bidders and five had stated that they were interested, that only one bidder had tendered.

In response, it was stated that the other potential bidders had cited lack of resources and capacity as the reason they did not put in bids.

Following the discussion, Overview and Scrutiny Committee considered the reasons provided for the call in and responses given. Having considered the information, the Committee agreed to confirm the original portfolio decision:

-       To award the contract to Consultant A

Cllrs Levy, Aramaz, Jewell and Boztas voted in favour of the original decision, Cllrs Rye and Hockney abstained. The original Portfolio Decision was therefore agreed.

Councillor Smith exchanged places with Councillor Rye at this point and Councillor Rye left the meeting.

Councillor Joanne Laban led the Call-in on the following item -