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Guidance Principles: Best Practice for Recycling and Waste Management Contracts

Acknowledgements

Preface

Executive Summary

1 Introduction

2 Planning

3 Scope of Services

4 Additional Considerations

5 Evaluation

6 Contract Form

7 Contract Management

Other Useful Links

Further Reading

Appendix 1: Case Studies

Appendix 2: Flow Charts Outlining Common Decision Processes for Procurement of Services

Appendix 3: Tender Evaluation Plan Example

Appendix 4: Pre-non-priced Evaluation

5 Evaluation

5.1     Pre-tender meeting

Pre-tender meetings are useful to help define the scope of services, to provide clarification and to disseminate information.  It is vital to communicate the overarching objectives and scope of services to prospective tenderers (see section 2.1).  Often pre-tender meetings are perceived to have limited benefit, because prospective tenderers are reluctant to share proprietary information that may be used at a later date by the principal in a request for tender.

However, if the purpose is to distribute information, they do have the benefit of ensuring all tenderers are fully informed of the desired outcomes being sought by the principal, and only one meeting is necessary to convey the information.

5.1.1     Evaluation plan

An evaluation plan is essential to ensure the appropriate factors are considered when comparing potential service providers.  It also provides documented evidence of the evaluation procedure followed in the event of any legal challenge to the outcome.  It is important to run a fair and transparent evaluation process.  All decisions and discussions with tenderers should be documented throughout the process, especially for high-value or long term contracts.

The plan should contain details of the:

• tender evaluation team
• tender timetable
• tender opening procedure
• evaluation procedure, including evaluation criteria and weighting given to price and non-price attributes (note that it is important that the evaluation criteria fit with the council’s waste management plan and desired outcome)
• process for evaluating conforming, non-conforming and alternative tenders
• negotiation process with preferred tenderers
• tender recommendation, and reporting to council
• award of the contract.

An example of an evaluation plan is given in Appendix 2.

Land Transport New Zealand’s Competitive Pricing Procedures is widely used as an evaluation tool.  Care should be taken with their strict application for waste management contracts and to ensure the principal retains the flexibility to allocate weighting to each attribute, to ensure they reflect the overall intention being sought (see ‘Key attributes’ below).  For example, the principal may want to direct recovered materials to a local supplier and would therefore weight this attribute accordingly.

Meetings with short-listed tenderers are a good idea to clarify aspects of the tender and to meet key personnel.  Organisations should maintain flexibility to negotiate with short-listed tenderers where contracts are long term, have high public exposure, and ongoing contract management is a critical component.

5.1.2     Key attributes

The following are the key non-price attributes each tenderer should submit information on.

a) Relevant experience - details of relevant experience, showing the tenderer’s suitability for the work described in the specification.  Where sub-contractors are to be engaged, their relevant experience should also be supplied.

b) Track record - evidence of the tenderer’s ability to complete projects to target performance levels.  Evidence should demonstrate the ability to complete projects on schedule and within budget, and past conformity with safety requirements.  The names, position and telephone numbers of past clients who may be contacted as referees should be included.  Similar information is to be provided for any proposed sub-contractor.

c) Technical skills - details of key personnel who will be engaged on the contract works, including their relevant skills, experience and availability.

d) Resources - details of plant, equipment, machinery and other facilities intended to be used on the contract works, and whether such plant, equipment, machinery or other facilities are owned or will be hired.

e) Management skills - details of management methods, skills and systems applied to carry out the contract works.  These skills are to include management training given to staff, and methods of communication between staff and the engineer.  Systems for maintaining records relating to the contract works, systems for reporting internally and as required for this contract, and systems used in the preparation and submission of payment claims should also be described.  The company’s safety record (ACC claim record and OSH record) and the procedures used to ensure safety at the contract works must be submitted in terms of the Health and Safety in Employment Act 1992 by fully completing the contractor’s Health and Safety Pre-Qualification Questionnaire.

f) Methodology - a detailed description of the methodology proposed to achieve the specified end result within the required time, including but not limited to:

• public safety
• public relations
• methods to minimise environmental damage
• reinstatement methods
• communication
• programming
• quality assurance procedures
• implementation and supervision.

It is increasingly common to include an attribute for innovation (eg, any measures to reduce the economic impact on the council in providing the services, ways of minimising service provision risk or including provisions for new services) and/or waste minimisation practice.  Another method of showing innovation during the tender process is through the submission of a non-conforming or alternative tender.  To identify any benefits from an innovative tender, a comparison should be made with a conforming tender.

It is acceptable to make health and safety a separate attribute, and make it pass or fail.

5.1.3     Weighting attributes

A key aspect of evaluating tenders is the weighting of attributes.  When weighting attributes, however, those involved in the process will often have different views.  One method of weighting attributes is to compare attributes against one another.  This process is called cross-impact analysis, and allows the attributes to be compared to one another and an appropriate weighting assigned.  When considering the weightings it is important to keep in mind the council and community objectives.

The process for cross-impact analysis is as follows.

1. Define the attributes.
2. Develop a matrix (see Table 3 below).
3. Agree on a scoring method (eg, a scale of 1-3).
4. Individually each team member assesses each attribute against the other attributes.
5. The group meets to assess scores.

Table 3: Example of an attribute weighting matrix

The benefit in allocating the weighting to each attribute in this way is that it is transparent, auditable and allows for each party involved in the assessment to have input to the final weightings.

Attributes should align with the overarching objectives of the services being sought.  This provides clear direction to tenderers regarding the most important outcome to the principal (eg, attributes relating to highest quality or least cost).  Emphasising price at the expense of attributes that provide quality should be avoided, as this can reduce contract management input over the contract period.

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