Joint Waste Committee Agenda Item: 7.4

Date-9 November 2011

Report of the-Lead Director, Anthony Leonard

Subject-Inter Authority Agreement

Recommendation: It be RESOLVED that the Joint Waste Committee approves the Inter Authority Agreement (Appendix 1) and forwards to the four partner Councils for signing by their Cabinets by the end of this calendar year.

Report Author:Trevor Scott (Wealden District Council)

Introduction

  1. This Committee has received two previous reports on the Inter Authority Agreement (IAA) and it has also been considered by the four partner authorities’ scrutiny committees; therefore the issues surrounding this document will be familiar.
  1. The IAA (Appendix 1) attached is now proposed as the final version of the document. It has been considered by the legal teams of the four Councils and relevant amendments have been incorporated.
  1. As explained, the IAA will create a binding legal relationship between the four authorities as a basis for undertaking the procurement exercise with a view to jointly appointing a contractor for the delivery of this project.
  1. The terms of reference setting up this Committee reserved the power to sign the IAA back to the four individual Councils, through their Cabinets. As a result, this Committee is now being asked to approve the final draft of the IAA and recommend it for agreement and signing to the respective Cabinets.
  1. As has consistently been advised, knowledge of the market place shows that contractors are now actively seeking this type of legal agreement between Councils so that they have some certainty that the Councils are committed to proceeding with the project. This is important to the market as the cost of procurement for the companies involved is not inconsiderable.
  1. Under the timetable for this project, the ISOS stage (Invitation to Submit Outline Solutions) of the procurement process is expected to start on 28 November and run until 9 December. The closing date for receiving ISOS bids is then 20 January 2012. Given the importance of demonstrating the commitment of this partnership to the procurement exercise, the Committee is asked to highlight to the respective Councils the importance of having the IAA signed by the end of this calendar year. This will enable the market place to submit their ISOS bids with the knowledge and confidence that the authorities have formally signed up to this procurement process.
  1. It is noted that the scope and value of the contract opportunity as advertised in the OJEU notice would be reduced in the event that one or more partners withdraws. A significant reduction in scope and value may require that the contact be re-advertised; however minimal guidance is available to indicate what percentage might be considered “significant”. In the event that a decision istaken to re-advertise the contract the statutory notice periods required by the OJEU process will incur a delay circa three months to the project timetable meaning that the project is then unlikely to be delivered by 1 April 2013.
  1. However, if a partner withdraws through not signing the IAA then during the initial ISOS stage a reduction to the scope and value of the contract can be managed by advising and re-instructing contractors before they have submitted their outline solutions. This reduces the risk of having to re-advertise and incurs a delay of circa one month to the project timetable. Where possible a delay of this nature would need to be managed, at least in part, within the project timetable contingency period. However, if this is not possible, the project team will need to manage this by reducing the time allowed for evaluation of each procurement stage and the mobilisation period. By doing so, it must be noted that reducing the time available for these activities increases other risks associated with the project.
  2. The timetable for each of the Cabinets to resolve and sign the agreement is as follows. However if Eastbourne and Wealden Cabinets could be brought forward earlier in December it would assist in making clear the commitments to the bidders sooner rather than later.

Hastings / 28November
Rother / 5 December
Eastbourne / 14 December
Wealden / 14 December

The signed agreement will be made available to each of the bidders so they are informed of each of the partners’commitment by 15 December 2011 or earlier if Eastbourne Borough Council and Wealden District Council bring forward their Cabinet meetings.

Conclusion

10.The IAA has been through a number of drafting amendments and is now being presented to this Committee as a final draft, for approval and recommendation to the respective Councils. Given the timetable for this project it is considered that this document should be signed by the four Councils by the end of this calendar year in order that the competitive dialogue can proceed with the full commitment of all the partner authorities.

Anthony Leonard

Lead Director

Risk Assessment Statement

The Inter Authority Agreement seeks to create a legal basis to govern the relationship of the parties to this project. In doing so, it seeks to manage and reduce the risks to the parties by seeking commitment from the parties to this process and by imposing a financial clause should a party subsequently withdraw. As the PQQ has already been issued and the short-listing commenced based on the combined contract value for all four authorities, the most significant risk to the parties is a need to either repeat or revise a stage of the competitive dialogue, or create and then recommence the process, due to a party withdrawing from the partnership. By entering into the IAA, it is expected that this will reduce the risks associated with this project and ultimately make it more appealing to the market place.

jwc111109 – Inter Authority Agreement1