Accelerated Procurement, Contract Extension & Renegotiation

Our essential waste management services have been put under strain in a number of ways during the pandemic, not only in terms of resourcing the operation, but also in terms of organisation (and re-organisation), management, governance and contract management.

Some of the latter issues may persist in the long term. Three procurement exercises we have been involved in have been delayed and / or otherwise affected. Changes in waste tonnages, from almost all municipal sources have changed in composition and quantity. Those arising through the kerbside household stream have increased in quantity and have an increase in cardboard and food in particular. Trade waste collections have dropped substantially (in revenue and tonnage), HWRCs are collecting a reduced range of segregated materials, losing revenue streams and also tonnage, depending on the arrangements for social distancing and opening hours. Litter bin arisings have experienced major reductions and unusual peaks around take away / food outlets that have reopened.

There is a re-evaluation of services as the potential longevity of this crisis stretches into the medium or longer term. This is in the context of new realities around limited public sector budgets.

These two issues are combining to require reassessment of the management of existing contracts and the procurement of new contracts. Councils that have deferred imminent procurement activity due to the crisis, may wish to deliver accelerated procurement initiatives, but need to be aware of engaging sufficient competition to realise good value for money. They may need to consider how to amend existing services contracts, accelerate procurement of new contracts, or negotiate new contracts without prior notification. This should be done in accordance with the requirements of Public Procurement Regulations and existing contract.

Avoiding the costs of procurement and seeking to extend existing contracts may be an option in some circumstances, although often those contracts, let five or seven years previously, may well (depending on the risk and indexing approach taken) be offered on a less attractive rate than at present – putting the Authority in a dilemma.

Contract extension or seeking to adjust on-going contracts to the ‘new normal’ will often necessitate contract re-negotiation. This should be entered in good faith with a degree of robust engagement, exploring options and aiming for a practical solution to service delivery requirements and the changing waste management demands, costs and revenue streams.

If seeking support in any of the above areas, contact me or one of the team for an informal chat through options. We are a waste / resource management consultancy that currently provides the CIWM Contract Essentials training course. We also recognise budget challenges and are happy to discuss options in a free consultation. FRM have a specialism in procurement (with c.100 years experience among the waste services procurement team), we can provide references from LAs across England and are flexible to meet requirements.

Call Paul on 07817 853572, paul@frithrm.com

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