Lateral thinking on tendering pays dividends
Barry Bolton, Chairman of ACM Waste Management PLC, offers an industry eye view on the tendering process and how a holistic approach to waste management can offer significant benefits for local authorities
Waste management in all its forms is here to stay. It will become increasingly important and the costs could escalate each year depending upon how it is controlled. Waste to landfill will become prohibitively expensive and waste streams will require an ever-finer degree of separation for recycling.
By approaching the whole process of outsourcing waste management in a holistic manner the new breed of waste management companies is combining recycling rebates, reprocessing and the management of waste streams, to deliver a one stop operation and substantial savings.
Industry is already reaping the benefits of this type of system, made easier because of the lack of requirement to tender on businesses for the services. On the other hand, local authorities are regulated in their approach by legislation such as the Local Government Act 2003, European Union Public Purchasing Directives and are, as public sector organisations, also expected to promote and deliver sustainability and environmentally beneficial practices.
The currently formal tendering usually takes one of two forms, either an “open” tender process or a one-off “select” list process. Organisations short-listed will be invited to tender against a specification, tenders are then evaluated against the pre-determined criteria. In the past the main consideration of some tendering authorities when awarding contracts was price, and the lowest priced quote or tender was awarded the contract. This approach works well when that which is being tendered for is an easily quantifiable commodity, making direct comparison between tenders an effective and straightforward approach. Today, however, with most organisations adopting the ideals of “best value” this is no longer the case. Although the price is still an important factor, other aspects are now taken into account when deciding on the best offer.
An onerous task that currently resides within the local authority is the production of the tender document – its scope, detail and measures. It is a sufficiently difficult procedure in a straightforward environment, but in waste management, with its rapidly changing legislation and developing technology for recycling, it is even more difficult to make sure that a tender covers all of options available.
It is at this point there could be significant benefits to local authorities in broadening the tender approach to include a pre-tender analysis of the existing situation. By undertaking this in an open book manner, waste management companies would be encouraged to seek ever more creative and effective methods of managing the waste streams.
As the situation becomes more complex, opportunities continue to arise where waste can be converted in to revenue streams. If taken in the context of a holistic approach the revenue can be used to offset the cost of disposal of non-recyclable waste. Although the creation of a holistic tender may seem loose and inexact it is, in fact, the route to ever more creative solutions to a problem which will only become more difficult to manage.
The key to a successful holistic approach lies in the application of a comprehensive audit of the waste being produced. This must take into account every item, and the material from which it is made, that constitutes a part of an organisation’s total waste output. From this audit the waste streams can be identified, segregated and passed for recycling, reprocessing and disposal in the most cost effective manner.
The waste of one organisation can often be the raw materials for another and it is in managing this complex juggling act of waste, route and final recipient that the holistically based waste management company can generate its revenue.
Waste into fuel
An example of the lateral thinking generated by such a holistic approach is the conversion of the waste material from interior car door panels into an alternative fuel source for an industrial process. Linking the materials, industries and processes was only possible because of the knowledge and experience of the waste management company involved and the waste producers “no limits” approach to finding a solution. An additional benefit is the reduction of brown coal used in the industrial process, preserving scarce natural resources.
The logical conclusion of the holistic approach is a “win-win” scenario. There has to be an economic, legal and environmentally sustainable solution for the waste producer and a method of generating revenue for the waste management company. If the structure of the solution disadvantages either party in any way then there is little hope of a long-term relationship being fostered. However, if the “win-win” succeeds, the relationship develops into one that is truly symbiotic.
It would seem that at the outset a tendering approach might not lend itself to a holistic service offering. However, if a tender – an approach proven to work – is expanded to include research of the needs and requirements, rather than merely provide a solution, the waste management company will have the scope to utilise its full capability in delivering a mutually beneficial solution. It will reinforce the place of tendering as good practice but encompass the benefits of lateral thinking and innovation.