Negotiating the politics of procurement

The waste services sector is going through a tough time with the prospect of LATS fines looming, budgets getting tighter, and media reports of public disgruntlement with the industry. It is a daunting prospect for even the toughest and most experienced of waste contract and procurement experts.

Waste management services and specialist procurement support staff are in greater demand than ever before, but a rising number of experienced managers are reaching retirement age or leaving local government for opportunities in consultancy, the private sector, or government agencies. This means the next intake of waste managers will have to make their way through a procurement minefield in the hope of securing the services and infrastructure needed to meet the UK’s residual waste treatment capacity for the next 25 years.

No quick fix for success

As those that have successfully come through this process know, there is no simple, quick-fix solution to a successful and cost-effective procurement process. It takes commitment, careful planning, specialist advice, timely public and stakeholder engagement, risk management – and hard work. Integral, however, to a successful procurement process is political support. Many projects have been delayed by months, even years – with associated costs – as a result of wavering commitment to the residual waste procurement project.

The residual treatment project is likely to be one of the largest, most important, and possibly most costly, procurement processes undertaken by any council. So, it seems fitting that it receives full commitment and support from members at the earliest stages. It is also the process most likely to face significant planning challenges and public scrutiny.

At Hyder Consulting, we have undertaken soft-market testing work for our clients that has consistently indicated a council’s ability to demonstrate cross-party political support and long-term commitment to a project will make the contract more attractive to potential bidders.

There is a clear need for officers to demonstrate the immediate need for the new services and infrastructure. They have to highlight the importance of timely implementation, combined with a carefully constructed case for the level of resources, funding, and timescales required to deliver the procurement process. Gaining this early political commitment means that, from the beginning, officers can begin to bring on board the necessary project team to support the residual treatment contract procurement process.

Teamwork is crucial

This project team – which should consist of internal and external technical, legal, financial, procurement and planning specialists – can give input into the design and implementation of the project. In our experience, regular project team meetings have enabled this knowledge transfer and information flow to continue to benefit the project up to contract award, and beyond, which is crucial in ensuring the contract is delivered successfully. It also means that key performance indicators set for the contract are understood, monitored and challenged as required.

Factoring in stakeholder engagement opportunities in the early project planning stages provides a welcome forum for a wider audience to provide input and be brought along with the process. This can help ensure political support and public appreciation, or allow scrutiny from a wider peer group. The timing of this input is crucial – an assessment of where engagement is most needed is required to get the most from it.

The process can take up time and be costly, so it is important to know what is required from the engagement, who should be involved, how the information is disseminated, and how the feedback is best incorporated into the decision-making process. Successful stakeholder engagement can enhance public and political support.

This helps make the planning and implementation stages later on less painful. Early involvement of the public, campaign groups, and key stakeholders, will help to minimise any later objections that could derail the process. As government support for partnership working increases, budgets continue to be cut and the cost of implementation of new infrastructure continues to rise. It seems that partnering may become the only affordable route for many councils – not always within existing groupings but with other neighbouring authorities. Here joint services and facilities can bring real savings. However, partnering is far from easy.

The added complications associated with additional – and sometimes conflicting – political ideals, opinions, policies and strategies can prove too much for some. It requires political support and the setting up of an autonomous partnership body that has commissioning authority and decision-making powers of its own. This is in addition to its requirement to fully engage, consider and represent the best interests of all parties involved. Successful partnership procurement relies on any conflicting ideologies not impacting on infrastructure timescales or delivery.

Advisor versus officer

Another important partnership to consider is the one between the internal officers and their respective advisors. To gain the best value from your specialist support it is important to decide realistically, up front, which work is best undertaken by the advisors and that to be undertaken by the officers.

As the procurement process develops, this respective input should be constantly reviewed and adjusted to account for changes in resourcing, processes, requirements and outcomes to ensure advisor input is channelled most effectively. This approach should also extend to the decision-making process. It is not the advisors’ role to decide what is best for the council – their role is to provide the independent advice, data and reporting necessary for the council to sign off, through set procedures, decisions integral to the progress of the project.

In terms of decision-making, it is vital the council decides, up front, those factors most important to them and that these are fed into the decision-making process. They must also be made fundamental to the evaluation criteria applied. For example, if the council has a no incineration policy then build this into the evaluation criteria at the options appraisal stage and make it clear through the contract that it is not an option. This ensures that the process delivers a solution acceptable to the council and provides clarity to bidders, making them more inclined to tender.

Another critical issue is planning. The situation may range from a position where a site for future infrastructure is not even identified in local plans, to a position where a council can offer both a site and planning consent through the contract. The former position may offer some contractors with existing sites a competitive advantage, while the latter offers bidders an equal playing field from the start.

As such, these two scenarios require a different assessment of what might be the most appropriate route for procurement and how the tender documents should be constructed.

A final word of warning. When considering any treatment infrastructure, procure, if necessary, not just the black box, but also the other infrastructure required to support your technology such as transfer stations, bulking stations, transportation. Look at how this network will interact with upstream and downstream services.

Professor Adam Read is head of waste management and Hannah Lawrie is waste procurement team leader at Hyder Consulting