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6. SUSTAINABILITY

6.1 AWARDING OF CONTRACT CT000269 FOR KERBSIDE ORGA NICS COLLECTION SERVICE

Document Information

Author Natasza Purser, Manager Waste Services Responsible Darren Fuzzard, Director Presentation a nd Assets Director

Summary/Purpose

The purpose of this report is to consider tenders submitted for the collection of household organic waste from properties in urban Bendigo and Marong under Contract CT000269.

Policy Context

Council Plan Reference: City of Greater Bendigo Council Plan 2013-2017 (2015-2016 Update): Theme: 5 Sustainability

Strategy 5.5 The level of waste to landfill is reduced and residual waste is managed responsibly, to deliver the adopted waste management targets.

2015-2016 Action 5.5.1 Implement the Waste and Resource Management Strategy including creating a solution to manage kerbside organics.

Strategy Reference: The Waste and Resource Management Strategy 2014 - 2019, Section 8.3 of the implementation plan states that a key objective is to focus on diverting organic waste from landfill to minimise current and future financial and environmental liabilities.

Background Information

On 2 March 2016 Council resolved to introduce in 2016/17 compulsory fortnightly kerbside organic collection service to all households in urban areas of Bendigo and Marong. This contract is required to implement that resolution and compliments other contracts already in place for the transport and processing of the organic material and the supply of bins, kitchen caddies and bin liners.

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Report

A public tender for CT000269 was advertised on 16 April 2016 and closed on 10 May 2016. The tender was advertised in the Bendigo Advertiser and on Tenderlink. The Tender Evaluation Panel (TEP) comprising Darren Fuzzard, Natasza Purser and Gary Leech (Operations Engineer), evaluated the tenders in line with the evaluation criteria contained within the tender. In addition, a probity auditor (Graeme Stewart) attended the TEP meeting, which was facilitated by Paul Sherwood (Contracts Co-ordinator) and attended by Richard Morrison (Contract Project Co-ordination Manager). Bridgette McDougall (Organics Project Officer) attended as an observer. Priority/Importance: The provision of a collection service to households in urban Bendigo and Marong is a key aspect of the solution to divert organic waste from landfill. This contract represents the last remaining element needed to enable the service to commence in September 2016 as agreed by Council. The environmental benefits of diverting organic waste from landfill have been discussed in previous reports to Council during the course of this project and are therefore not detailed again here. To date, the project has already achieved the following key milestones: • Adoption of the Waste and Resource Management Strategy acknowledging the

importance of preventing organic waste from going to landfill - 2014.

• Trial of an organics collection service from 2,671 households and composting of the collected material – September 2015.

• Collation of results, including surveys and feedback from participants – December 2015.

• Reporting of results and resolution by Council to implement the kerbside organics collection service in 2016/17 – March 2016.

• Implementation of extensive communication plan – March 2016 onwards.

• Tendering for supply of kitchen caddies and liners; ordering of caddies and liners – April 2016.

• Ordering of 39,000 mobile organics bins for delivery to residents – April 2016.

• Negotiation and lock-in of delivery of bins, caddies and liners to residents – April 2016.

• Commencement of delivery of 39,000 mobile organics bins – May 2016.

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Consideration of Tenders: Submissions were received from the following tenderers: • Ellwaste

• Four Seasons Waste

• Greenaway Organics Pty Ltd

• JJ Richards and Sons Pty Ltd

• Wheelie Waste As requested by Council, tenderers were asked to provide prices for contracts of 2 and 7 years (with 2x2 year extension options) in length. The price offered for a 7 year contract (plus 2x2 year extension options) by the preferred tenderer within a conforming tender submission is $0.780/bin lift. Over 12 months, collection from 40,000 properties will cost $811,200. The price offered by the preferred tenderer for a 2 year contract (no extension) is $0.97/bin lift, or $1,008,800 per year for 40,000 properties. The tendered prices to provide a service for 2 years in lieu of the industry standard of 7 years would be significantly higher. I.E. The tendered prices per lift for a 2 year contract were an average of $1.261per lift, or $1,311,440 per year for 40,000 properties. The average price of a 7 year contract was $0.87 per lift or $908,752 for 40,000 properties. Hence, the average cost of a 2 year contract would be $402,688 more per year than the average cost of a 7 year contract. It is understood that Council’s request to explore the price for a two year contract was due to a desire to review the frequency of service provided once residents become more comfortable with the three bin arrangement; notionally within two years of introducing the organics bin. Given the considerable cost penalty involved in pursuing a shorter duration contract, this approach to achieve Council’s objective is not recommended. Alternatively, should Council consider that the community is ready for such a change prior to the end of the standard (and proposed) seven year contract period, the frequency of pick up between the waste bin (currently weekly) and the organics bin (fortnightly on introduction) could readily be reversed with minimal, if any cost penalty. An alternative tender submitted by JJ Richards also offered a different collection day schedule to that which currently exists. The price tendered is marginally more expensive than the conforming tender received from the recommended tenderer. To achieve this arrangement would require either the organics bin to be collected ‘out of sync’ with other bins or that the existing collection services be changed to accommodate this. Given that this alternative proposal has a higher cost than the recommended tender and requires changes to existing services to household, further consideration of this alternative is not considered warranted.

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The following assessment relates to the five conforming tenders received for the seven year contract. The criteria used to assess the tenders included capability, capacity, price/value, local content/partnership, and social procurement. A brief overview of the submissions is given below. Four Seasons Waste • In business for 30 years.

• Based in Altona North with depot in Golden Square.

• Offered lowest conforming price ($0.780/bin lift).

• Intend on purchasing 4 new Iveco trucks with Superior Pak bodies to service the contract.

• Ability to begin collections in September 2016 with new trucks.

• Provides garbage, recycling and green waste kerbside collection services along with hard waste collections and transfer station management services.

• Previously held CoGB kerbside recycling contract for 10 years.

• Proposes local servicing, maintenance and suppliers.

• EZY2C tracking system (the same as the system used by CoGB for its own waste vehicles).

• Has contracts with 11 Councils.

• Provided copies of Quality Management System, OHS Management System and Environmental Management System.

JJ Richards • Based in Queensland with 26 offices in Queensland the Northern Territory, NSW and

Victoria. Depot in Bendigo.

• Employs over 2,000 people.

• Intend on purchasing 4 new Iveco cab chassis with bodies manufactured in-house by JJ Richards.

• Ability to begin collections in September 2016 with new trucks.

• Provides garbage, recycling and green waste kerbside collection services along with hard waste collections to Local Government.

• Services 46 Council’s in Australia including 13 in Victoria.

• Undertakes 2,200,000 domestic collections per week.

• J-Track tracking system, Black moth video truck monitoring system.

• Provided copies of OHS Management System. Elliott Holdings (Ellwaste) • In business for 31 years.

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• Based in Cohuna and has depots in Echuca, Swan Hill and Mildura.

• Has kerbside recycling contract in CoGB, operating out of Endeavour recycling in East Bendigo.

• Intend on purchasing 4 new Iveco trucks with MDJ Gen 5 bodies to service the contract.

• Ability to begin collections in September 2016 with new trucks.

• Pre-Qualified contractor with CoGB.

• 4 Iveco trucks with MacDonald Johnson bodies.

• 88,000 kerbside services per week.

• Contracts with 7 Councils.

• Provides garbage, recycling and green waste kerbside collection services along with Transfer Station management, commercial waste services.

• Own and operate the Patho landfill and the Echuca recycling facility.

• Provide greenwaste processing services (mulch).

• Proposes to use local staff.

• Provided copy of Company Information Booklet. Wheelie Waste • Based in Warrnambool with depot in Bendigo.

• In business 35 years.

• Provides waste services to Local Government, commercial and private operators.

• Provides garbage, recycling and green waste kerbside collection services.

• Trucks not specified, therefore ability to begin collections in September 2016 not confirmed.

• Has CoGB bulk haul contract; pre-Qualified contractor with CoGB.

• Contracts with 13 Councils.

• Proposes to use local staff.

• Provided copy of Corporate Systems Manual. Greenaway Organics • New business comprising Greenaway Bins & D. S. Kendall Waste Services.

• No current contracts in this business name.

• Greenaway Bins – private green waste only collection service.

• Kendall – contract with Shire of Moira (13,000 garbage per week, 13,000 recycling per week and 8,000 organics per fortnight) has collected garbage and recycling for 18 years and organics for 18 months.

• Intend on purchasing 5 new Iveco trucks.

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• Ability to begin collections in September 2016 with new trucks.

• Propose to use local drivers and staff.

• Submission contained very little other details. Additional tender information is included as a Section 89 report in the Council agenda.

Consultation/Communication

The tender was advertised publicly and tenderers submitted requests for clarification throughout the tender process. Officers responding to requests for clarification were not aware of which tenderer had asked for a clarification, and all clarifications were provide to all tenderers to ensure that all tenderers had the same information.

Resource Implications

The cost of services provided under this contract are included in the pro-rata amount of $63/household added to the 2016/17 rates notices in accordance with Council’s 2 March 2016 resolution to introduce the service. Projected costs for future financial years: Standard rise and fall clauses are included in the contract and may cause an increase or decrease in the cost depending on CPI and the other externalities included in the calculation.

Conclusion

The conforming tender submission from Four Seasons Waste achieved the highest tender assessment score. Four Seasons Waste has demonstrated capability and capacity to deliver the specified service while offering the lowest cost to the community.

RECOMMENDATION

That Greater Bendigo City Council, having considered the tenders received for contract CT000269 Organics Collection Service: 1. Award the contract to Four Seasons Waste Pty Ltd for a period of 7 years at the

schedule of rates price nominated (and adjusted annually in accordance with rise and fall provisions).

2. Delegate to the Chief Executive Officer the authority to execute the additional 2 by 2

year extensions subject to satisfactory performance of the contractor.