Scope
Description
Watford Borough Council ('the Council) intends to extend the contract with Veolia (ES) UK Limited for the provision of waste, recycling, streets and parks and open spaces services in Watford and with relevant support and supporting services such as call-centre, vehicle fleet management and maintenance and depot. The maximum potential total of £59.4 million (6 years) and would commence on 1 July 2028 when the current contracts ends (on 30 June 2028) with a break clause at year 4 on 12 months' notice. The existing contract falls under the 2015 Public Contract Regulations. Therefore any decision on extension needs to take account of those set out in Regulation 72 of the PCR's.
The proposed extension would fall within the provisions of Regulation 72(c)where all of the following conditions are fulfilled:-
(i)the need for modification has been brought about by circumstances which a diligent contracting authority could not have foreseen;
(ii)the modification does not alter the overall nature of the contract;
(iii)any increase in price does not exceed 50% of the value of the original contract or framework agreement. Local Government Reorganisation means that it would not be appropriate to go out to tender to reprocure this service, for a number of reasons:
•Waste Collection Authority and Waste Disposal Authority functions will become a combined function under new unitary responsibilities requiring a full system redesign for future service delivery by a successor authority
•Harmonisation of service standards across former district and borough footprints to new Unitary Authority Footprints and the method of collection will need to be determined by a successor authority
•Consideration of the wider waste infrastructure such as fleet, depots and transfer stations required under new administrative boundaries
•There are a mixture of in house and outsourced services and different contract end dates and a need to align decisions on service delivery models and contract expiry dates.
•It will require significant officer resource to re procure and broadly has a 3 year procurement timeline requiring external resource and would be compromised by the LGR transitional period and would not be cost effective to procure at this time.
Further to this new Waste and Recycling Legislation and Policy is being implemented which is disrupting the wider waste and recycling sector and includes Simpler Recycling, the Extended Producer Responsibility (EPR), Deposit Return Scheme (DRS), Emissions Trading Scheme and target from the Government to recycle 65% of Municipal waste by 2035 through the provisions set out in the Environment Act 2021. This is creating an uncertain commercial market impacting procurement.
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Contract 1
Supplier
Contract value
- £59,400,000 excluding VAT
- £71,280,000 including VAT
Above the relevant threshold
Earliest date the contract will be signed
31 March 2026
Contract dates (estimated)
- 1 July 2028 to 30 June 2034
- 6 years
Main procurement category
Services
CPV classifications
- 90500000 - Refuse and waste related services
Contract locations
- UK - United Kingdom
Other information
Conflicts assessment prepared/revised
Yes
Procedure
Procedure type
Direct award
Direct award justification
Additional or repeat goods, services or works - extension or partial replacement
The existing contract falls under the 2015 Public Contract Regulations. Therefore any decision on extension needs to take account of those set out in Regulation 72 of the PCR's.
The proposed extension would fall within the provisions of Regulation 72(c)where all of the following conditions are fulfilled:-
(i)the need for modification has been brought about by circumstances which a diligent contracting authority could not have foreseen;
(ii)the modification does not alter the overall nature of the contract;
(iii)any increase in price does not exceed 50% of the value of the original contract or framework agreement.
Local Government Reorganisation creates a task to contracting local authorities to determine on the basis of the best value and any existing risk, the best solutions in respect of the existing complex high value contracts that may merge or consolidate in future arrangements. This is to allow a smooth transition in re-organisation and post-reorganisation period whereby a longer period is required to achieve stability and sustainability of service delivery.
Local Government Reorganisation means that it would not be appropriate to go out to tender to reprocure this service, for a number of reasons:
•Waste Collection Authority and Waste Disposal Authority functions will become a combined function under new unitary responsibilities requiring a full system redesign for future service delivery by a successor authority
•Harmonisation of service standards across former district and borough footprints to new Unitary Authority Footprints and the method of collection will need to be determined by a successor authority
•Consideration of the wider waste infrastructure such as fleet, depots and transfer stations required under new administrative boundaries
•There are a mixture of in house and outsourced services and different contract end dates and a need to align decisions on service delivery models and contract expiry dates.
•It will require significant officer resource to re procure and broadly has a 3 year procurement timeline requiring external resource and would be compromised by the LGR transitional period and would not be cost effective to procure at this time. Further to this new Waste and Recycling Legislation and Policy is being implemented which is disrupting the wider waste and recycling sector and includes Simpler Recycling, the Extended Producer Responsibility (EPR), Deposit Return Scheme (DRS), Emissions Trading Scheme and target from the Government to recycle 65% of Municipal waste by 2035 through the provisions set out in the Environment Act 2021. This is creating an uncertain commercial market impacting procurement.
Supplier
VEOLIA ENVIRONMENTAL SERVICES GROUP (UK) LIMITED
- Public Procurement Organisation Number: PHPM-6732-PLLY
210 Pentonville Road
London
N1 9JY
United Kingdom
Contact name: Andrew Reidy
Email: andrew.reidy@veolia.com
Region: UKI43 - Haringey and Islington
Small or medium-sized enterprise (SME): No
Voluntary, community or social enterprise (VCSE): No
Contract 1
Contracting authority
Watford Borough Council
- Public Procurement Organisation Number: PDGQ-4877-NMGQ
Town Hall
Watford
WD17 3EX
United Kingdom
Telephone: 01923278345
Email: anita.awuku@watford.gov.uk
Region: UKH23 - Hertfordshire
Organisation type: Public authority - sub-central government