Biffa challenges iESE over tender applications

Last week (May 3) it was revealed that only 11 of the 24 companies invited to tender for the Improvement and Efficiency South East (iESE) framework contract did so (see letsrecycle.com story). And, commenting on decision of companies not to tender, iESE stated that it had no information as to the reasons for their no reply.

Now waste and recycling firm Biffa has claimed that iESE did know its reasons for not replying. Biffa said today (May 9) that it raised concerns directly with iESE and through trade body the Environmental Services Association (ESA), but had received no response from iESE.

The framework is being developed on behalf of 141 signatory local authorities in central London, the greater South East and the West Midlands which will allow them to choose from a list of approved suppliers for services including waste and recycling collections and street cleansing. iESE said the framework contract will allow councils to procure services without undertaking a full procurement process and could save them up to 85 million in costs (see letsrecycle.com story).

Value

In response to the statement made by iESE, Pete Dickson, development director for Biffas municipal division, said: iESE knows exactly why we chose not to bid. Were on record as saying it didnt offer the required value opportunity for either the public or private sectors.

We voiced those concerns at formal face-to-face meetings with iESE and during the initial pre-tender process. We were concerned that the procurement process for a framework contract such as this does not allow for a competitive dialogue process nor for a contract longer than ten years. These are both key considerations for our local authority customers who, in nearly every case, would seek either one or both of these fundamental requirements.

Biffa has said that a growing number of councils are using the competitive dialogue process to procure services, particularly for waste and recycling services, due to complexity of the bids.

Biffa has previously stated that the framework did not offer the required value opportunity when letsrecycle.com revealed that it, along with Serco and Kier, declined to tender (see letsreycle.com story).

Serco had previously said that while the company had seriously considered tendering but decided not to pursue it after assessing the opportunity against its bidding criteria. Meanwhile Kier had said that it did not align with the companys current business strategy.

Concerns

Biffa has said that there are a number of issues with the iESE contract including the restrictions on the length of contract tendered and possible costs arising from the procurement process.

According to Biffa, potential issues with the iESE framework include:

• Less choice – local authorities using the framework will in effect have a restricted choice of just 11 contractors, rather than the whole industry
• More cost – the iESE framework is likely to be more expensive than existing procurement routes as contractors will have to pay 0.5% of revenue to iESE for every successful bid for the term of the framework agreement. This is in addition to the 10,000 payable annually to iESE
• Minimal streamlining – the framework only cuts out the PQQ (pre-qualification) element, which is the least time-consuming and cheapest part of procurement
• More evaluation – with the frameworks removal of the PQQ phase, local authorities are likely to incur more time and costs because they will have to evaluate far more bids i.e. up to 11. With PQQ, councils can efficiently get to a shortlist of providers, typically between four and six

• Time limits on contracts – contracts secured through the iESE framework will be time-limited to a maximum of ten years, including any extensions. Local authorities currently prefer longer time options as these enable contractors to deliver maximum value. This is particularly relevant where investment costs are high.

Mr Dickson said: But as we know, almost every local authority procuring waste and recycling services has its own particular service specification. What happens if iESEs range of contracts doesnt meet the authoritys need? To me, it appears to risk forcing a square peg into a round hole.