Council
/ conseil
25 August 2011 / le 25 aout 2011
Submitted
by/Soumis par : Nancy Schepers, Deputy City
Manager/Directrice municipale adjointe, Infrastructure Services and Community
Sustainability/
Services d 'infrastructure et Viabilité
des collectivités
Contact Person/Personne ressource : Dixon Weir, General
Manager / Directeur général
Environmental Services / Services environnementaux
(613) 580-2424
x22002, dixon.weir@ottawa.ca
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Ref N°:
ACS2011-ICS-ESD-0045 |
SUBJECT:
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SOLID
WASTE SERVICES-COLLECTION CONTRACTS: IN-HOUSE BID AUTHORITY-MANAGED
COMPETITION
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OBJET :
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SERVICES DE GESTION
DES DÉCHETS SOLIDES : CONTRATS DE COLLECTE-CONCOURS GÉRÉ À L’INTERNE |
That
Council approve:
1. That
a minimum of one collection zone shall continue to be delivered by the private
sector.
2. That the in-house waste collection group
shall be awarded the current collection Zone 3 of the collection contract for
the term of the next contract.
3. That four of the five remaining collection
zones will be tendered.
4. That the Environmental Services Department
establish an “In-house Bid Team” to prepare and submit a “city bid” for the
curbside residential waste collection services, through a managed competition
process as described in the report, in all remaining contract zones.
Que le Conseil approuve ce qui suit :
1. Qu’au moins une zone de collecte
demeure confiée au secteur privé.
2. Que le groupe interne de collecte
des déchets se voie attribuer la zone 3 de collecte des déchets pour la durée
du prochain contrat.
3. Que quatre des cinq zones de
collecte restantes fassent l’objet d’un appel d’offres.
4. Que les Services environnementaux
forment une équipe de soumission interne chargée de produire et de présenter
une « soumission de la Ville » pour les services de collecte des
déchets résidentiels en bordure de la route, dans le cadre d’un concours géré
décrit dans le rapport, pour toutes les zones restantes visées par le contrat.
A report
(ACS2011-ICS-ESD-0019) related to this matter was presented for consideration
at the Environment Committee on May 17, 2011 and Council on May 25 and June
8. Subsequent to this, Council directed
staff to defer consideration of the report to the August Council meeting to
allow for continuation of the dialogue with CUPE Local 503.
The current solid
waste collection contract, Curbside Residential Solid Waste Collection Contract
(02105-91027-T02) will expire on October 27, 2012 (as directed by Council on
May 25, 2011), necessitating the need to tender this contract for the
subsequent contract term. The service
contract is divided into five geographic service areas or zones. This facilitates the possibility of multiple
contractor service delivery and increases market competition. Recognizing the extensive lead time required
to receive necessary equipment, it is important that contract awards occur by
the fall of 2011.
In 1998, as per
its authority, the then Regional Council adopted a “Managed Competition
Protocols” for waste collection services.
This protocol was established to provide both the accountability and
transparency that could allow for the preparation and submission of an in-house
bid for residential curb side waste collection services. This protocol was carried forward through
amalgamation.
In 1999, City
staff competitively bid on the residential collection contract and was awarded
one zone and successfully provided service beginning June 7, 1999 through to
the end of the contract in May 31, 2006.
In the second
round of competitively bid contracts, the City was awarded Zone 3 with service
commencing on June 1, 2006. Zone 3 is
the central zone and involves providing curbside recycling, organic and
residual waste collection services to approximately 47,000 homes, or about 20
per cent of city residents. This
contract expires with all other contracts on October 27, 2012.
Managed Competition Process
Should City Council
approve the preparation and submission of an in-house bid, it is recommended
that the City of Ottawa’s Supply Branch retain a Fairness Commissioner to oversee
the Managed Competition Process as has been past practice. The Fairness Commissioner will ensure a fair,
open and competitive process for all participants through conformance to the
City’s “Managed Competition Protocol.” The
Fairness Commissioner will be closely involved with the preparation of the tender
documents and will oversee the bid process throughout the evaluation process.
With Council’s approval of the proposed approach, the Environmental Services Department will establish an “In-house bid team” to prepare and submit a “City bid” for the curbside residential waste collection services through the managed competition process.
In-house Collection Zone
Since June 2006, City collection staff have
operated in Zone 3 in the downtown core.
This zone is high profile, encompassing the downtown business core and
tourist area. Operationally, it is also
the most difficult zone in the City as a result of higher housing density, back
alley collection, traffic congestion, high pedestrian traffic, parked vehicles,
snow removal operations and route closures due to diplomatic visits. City staff
have been very successful in providing a high level of service despite these
difficult operating conditions.
From a financial perspective, the City
achieved the anticipated savings predicted by its original competitive bid
estimates (in comparison to the next lowest bid). Table 1 below presents the
current and total contractual, operational and overall savings to area
residents achieved by the in-house collection group based on the contract that
commenced in June 2006. The contract is
structured to be paid at the bid unit rate for the actual tonnage collected.
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Table
1: Financial Performance of the In-house Collection Group
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The in-house collection for Zone 3 resulted
in an operating surplus for Year 4 of $213,996 and a cumulative operating
surplus to residents of $1,210,492 since the commencement of the contract in
2006. When these operational savings are
combined with the above-noted bid savings, the provision of these services by
City staff represents an accumulated saving of $4.8 million over the last four
years of the contract.
Beyond the high
level of service and the financial savings realized by the City’s in-house
group, the direct involvement in solid waste collection service delivery has
provided Solid Waste Services’ staff with a more complete understanding of
waste collection challenges as well as an ability to pilot various alternative
service delivery options with maximum flexibility and minimal financial penalty. They have also provided valuable and direct feedback
to the City on collection costs, vehicle trials and organics container
suitability from the operator’s point of view.
This experience has assisted the City to make practical advancements in
recycling and organics services.
Based upon the
sustained high level of service, the demonstrated financial savings, the
operational benefits of direct participation in service delivery, it is recommended
that the City in-house group be awarded Zone 3 for the term of the next
contract to ensure that this flexibility and knowledge remains within the City.
Further, it is also recommended that the
City be allowed to submit “in-house” bids for other collection zones, all in
conformance with the City’s existing “Managed Competition Protocol.”
In order to ensure that the managed competition process continues, it is recommended that at least one zone continue to be provided by the private sector.
There are no rural implications.
No public
consultation has been undertaken for this report.
This is a city-wide
report and comments by Councillors are not required.
The Purchasing By-law, under
clause 22(1)(c), authorizes non-competitive purchases where only one source of
supply would be acceptable and cost-effective. There are no legal impediments
to implementing the recommendations in this report.
RISK MANAGEMENT IMPLICATIONS
This report is in accordance with the service delivery priority to
“Deliver agreed to level of service at the lowest possible cost.”
There are no technical implications.
There are no
direct financial implications from approval of the process outlined in this
report.
The current 2011
base operating budget for the in-house operations for the collection of Zone 3
is $4.98 M. Any new operating and capital requirements for the in-house
operations will be identified and included in the report to Council for the
award of the contract following the upcoming tender.
With Council’s
approval, the City’s “in-house” waste collection group will be awarded Zone 3
of the collection contract for the term of the next contract and an “In-house
Bid Team” will be established for the purpose of submitting bids on other
curbside collection contract zones. The
Evaluation Team will report back to Committee and Council with its recommendation
for awarding the contract for the other four (4) service contract zones.