Can waste contract procurement be simple?

Posted by David Lerpiniere, Knowledge Leader for Waste Procurement on 21 June 2012

Gone are the days of the Private Finance Initiative and with it perhaps the preference for long-term waste management contracts procured through complex, lengthy and expensive procurement processes.

Experience has shown that councils have sometimes been lumbered with long term contracts which are not suited to the fast moving world of waste management, resource efficiency and wider environmental policy. Only this week Cheshire West and Cheshire Councils announced their intention to procure a short-term contract for managing their residual municipal waste and they are not alone in this experience. Other councils which have faced a similar need to revise their long-term waste contracting plans as a result of changing circumstance include Gloucestershire, Buckinghamshire and Derbyshire.

Similarly, the private sector has also lost confidence (and money) by bidding for contracts which may, in the end, not be let or which change markedly from that which was originally intended. These experiences are certain to make the private sector more cautious in its bidding activities and lead to it proposing more risk averse solutions. Clearly, the planning system has played a role in the delay or abandonment of a number of energy from waste projects, Cornwall and Derbyshire to name but two. A number of schemes have hit the buffers as a result of failure to obtain planning for the solution which the council bought. However, it can also be argued that there are other systemic reasons for the failure of contracts.

Big is not always beautiful

All these factors are beginning to drive a change in the way in which councils procure solutions. Big contracts and commensurately long procurement processes are not the only answer. Short-term contracts, if designed well, can give councils much needed flexibility and reduce procurement costs. It’s an approach which is particularly appropriate for smaller authorities. Councils also know that there are other factors and options available including partnering with neighbours and linking with community organisations to deliver services.

If a council needs a solution for managing its waste and recyclables then, in today’s market, it is possible to use a smart procurement process to go out and buy this solution. In the UK, we have benefitted over the past decade from the development of a state-of-the-art and competitive waste market. There are numerous large and small operators who can respond to an individual Council’s needs and provide the solution they need.

Keep it simple stupid

The procurement of municipal waste services has become a lengthy process of numerous stages and acronyms, requiring significant resources from the client and from bidders, not to mention the platoon of advisors which all parties need to martial in order to find a solution to their particular waste quandary.

On the surface, this would seem to be because developing and delivering waste infrastructure and services is an increasingly complex process. The sector has changed beyond all recognition over the last three decades. Gone are the days when local, cheap landfill was the disposal option of choice for a most councils. The market is filled with a plethora of operators offering tried and tested or weird and wonderful solutions for managing municipal waste and recovered materials. Waste and recycling in the UK has evolved into one in which the most successful operators are the ones who can master the nuances of process engineering as well as the logistics of haulage operations.

But this complexity does not mean that the overall objectives of any particular service are complex and, as a result, it is possible to use a procurement process which is similarly based on simple principles, processes and stages. This doesn’t mean increasing the risk of legal challenge. Challenges to the procurement process launched by unsuccessful bidders and other interested parties are commonly based on a lack of consistency in the procurement process and a council’s wider policies. Ultimately, simplicity has many virtues and can serve to reduce risk rather than increase it.

Procurement Lite?

If a council’s requirements and priorities can be defined and expressed clearly and married to a logical and fair procurement process, then the market will respond by offering competitive, effective and perhaps even elegant solutions. And if this approach can be founded on the bedrock of robust support from elected members and put into action by capable, well-resourced council officers, then local authorities can obtain excellent solutions to their waste management needs and, at the same time, save money and resources.

So maybe it’s time for ‘procurement-lite’?



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