ATTACHMENT 1
PARA TRANSPO
SERVICES
Guidelines for the
In-House Bid Process
DRAFT
June 14, 2006
2. PARA
TRANSPO IN-HOUSE BID SOUMISSIONS INTERNES POUR LES
SERVICES DE PARA TRANSPO |
That Council approve:
1. The process for managed competition described in this report that will allow for an in-house bid to be submitted for the up-coming Para Transpo contracts;
2. That Public Works and Services department establish an ‘In-House Bid Team’, which would include representatives of the Amalgamated Transit Union to prepare and submit ‘City bids’ for both van and non-accessible sedan Para Transpo service;
3. That the Director, Transit Services be authorized to submit a bid to provide Para Transpo Services on behalf of the ‘In-House Bid Team’; and
4. That budget of $100,000 be identified to cover the costs of the managed competition process: in particular to cover the cost of a Fairness Commissioner, financial analysis and assistance for the in-house team in bid preparation.
recommandation du
COMITÉ
Que le Conseil approuve:
1.
Le
processus de concurrence dirigée décrit dans le présent rapport afin de
permettre des soumissions internes pour les prochains contrats visant les
services de Para Transpo;
2.
La
création, par Services et Travaux publics, d’une « équipe des soumissions
internes » qui comprendrait des représentants du Syndicat uni du transport
et serait chargée de préparer et présenter les soumissions de la Ville pour les
services de Para Transpo utilisant des fourgonnettes adaptées et des berlines
non accessibles;
3.
Que le
directeur des Services de transport en commun soit autorisé ŕ présenter une
soumission pour la prestation de services Para Transpo au nom de l’équipe de
soumission interne;
4.
L’affectation
d’un budget de 100 000 $ pour couvrir les coűts du processus de
concurrence dirigée, plus particuličrement les coűts liés aux fonctions du
commissaire de l’équité, ŕ l’analyse financičre et au soutien ŕ l’équipe
interne pour la préparation des soumissions.
Documentation
1.
Acting Deputy City
Manager, Public Works and Services report dated 19 June
2006 (ACS2006-PWS-TRN-0007).
Report to/Rapport au:
Transportation Committee
Comité des transports
and
Council/et au Conseil
196 June 2006/le 619
juin 2006
Submitted by/Soumis par: R.G. Hewitt
Acting Deputy City Manager/Directeur municipal adjoint
par intérim,
Public Works and Services/Services et Travaux publics
Contact/Personne-ressource: H.
Gault, Manager/Gestionnaire,
Transit Service Planning and Development/Planification et développement Service
du transport en commun
613-842-3636 ext. 2435,
helen.gault@ottawa.ca
|
City Wide |
Ref N°:
ACS2006-PWS-TRN-0007 |
SUBJECT: PARA TRANSPO IN-HOUSE BID
OBJET: SOUMISSIONS
INTERNES POUR LES SERVICES DE PARA TRANSPO
REPORT RECOMMENDATIONS
That the
Transportation Committee recommend Council approve:
1. The process for managed competition described in this report that will allow for an in-house bid to be submitted for the up-coming Para Transpo contracts;
2. That Public Works and Services department establish an ‘In-House Bid Team’, which would include representatives of the Amalgamated Transit Union to prepare and submit ‘City bids’ for both van and non-accessible sedan Para Transpo service;
3. That the Director, Transit Services be authorized to submit a bid to provide Para Transpo Services on behalf of the ‘In-House Bid Team’; and
4. That budget of $100,000 be identified to cover the costs of the managed competition process: in particular to cover the cost of a Fairness Commissioner, financial analysis and assistance for the in-house team in bid preparation.
RECOMMANDATIONS DU RAPPORT
Que le Comité des transports recommande au Conseil
d’approuver:
1.
Le
processus de concurrence dirigée décrit dans le présent rapport afin de
permettre des soumissions internes pour les prochains contrats visant les
services de Para Transpo;
2.
La
création, par Services et Travaux publics, d’une « équipe des soumissions
internes » qui comprendrait des représentants du Syndicat uni du transport
et serait chargée de préparer et présenter les soumissions de la Ville pour les
services de Para Transpo utilisant des fourgonnettes adaptées et des berlines
non accessibles;
3.
Que le
directeur des Services de transport en commun soit autorisé ŕ présenter une
soumission pour la prestation de services Para Transpo au nom de l’équipe de
soumission interne;
4.
L’affectation
d’un budget de 100 000 $ pour couvrir les coűts du processus de
concurrence dirigée, plus particuličrement les coűts liés aux fonctions du
commissaire de l’équité, ŕ l’analyse financičre et au soutien ŕ l’équipe
interne pour la préparation des soumissions.
BACKGROUND
The current FirstBus
contracts for the provision of Para Transpo van and sedan service expire on
June 30, 2007. The lead-time to obtain
wheelchair-accessible vehicles is estimated to be six to nine months. This means that, to have new vehicles
available for July 1, 2007, they must be ordered as soon as possible and
therefore the procurement process should be initiated now.
On May 17, 2006 during discussion of the report
presented to Transportation Committee regarding “Para Transpo Service Contracts
and Taxi Script Pilot Project”, City staff was directed to report back to
Transportation Committee on the process to be used to accommodate and evaluate
an “in-house” bid to provide Para Transpo service. This report provides information on the recommended procurement,
in-house bid and evaluation process.
To ensure a smooth transition
between service providers and to allow sufficient time for an in-house bid, the
City is attempting to is negotiating a
three-month extension to the existing FirstBus contracts as well as the option
for a further three one-month periods.
, in the event that a delay of the award is caused
by some unforeseen circumstances. The
terms and conditions for the extensions,
if successful, will mirror those submitted in the original
FirstBus RFP submissions, including an annual price escalation capped at three
percent.
DISCUSSION
The following
procurement process was developed by Supply Management in order to ensure an
open, fair and transparent procurement process.
The focus of the
procurement will be customer service and cost.
The bid solicitation document will be written so that the service
delivered will meet the customers’ needs at the lowest tendered cost.
1. One bid solicitation document will be issued to include a two-stage procurement process. The pre-qualification process will include both mandatory and rated criteria with a pass grade, and only those bidders who are qualified will be considered for contract award in the tender stage, as the lowest responsive bidder:
·
Potential
bidders will have the option of bidding on wheelchair-accessible van service
and/or non-accessible sedan service;
·
A
number of service levels for each service type will be included in the
procurement process and bidders will be required to bid on all the service
level options listed within each service type that they bid on;
·
A
two sealed envelope approach will be used for each service type, so that the
tender pricing is not known to the evaluation team during the evaluation of the
stage one pre-qualification, and only those envelopes from the pre-qualified
bidders will be opened, with the lowest responsive bidder recommended for
award;
·
Before
awarding a van and sedan contract, a comparison will be made to the cost of
delivering service through the existing taxi contracts;
·
One wheelchair-accessible van
service contract will be awarded and the service level awarded will be based on
the mix of accessible vehicles (accessible van, accessible taxis) that would be
available for the beginning of the new contract period that will deliver the
overall most cost-effective service, in the sole opinion of City staff; and,
·
If
a sedan contract is awarded, the service level awarded will be based on the mix
of non-accessible vehicles (sedan and taxis) that would be available for the
beginning of the new contract period that will deliver the overall most
cost-effective service, in the sole opinion of City staff.
2. Clauses will be included in the bid solicitation document to allow for adjustments in service levels over the contract period based on budget approvals as well as additional service delivery options that may become available such as Taxi Script.
3. The wheelchair-accessible van service and the non-accessible sedan service will contain the following elements:
·
A
five-year contract (with an option for one additional year if both parties are
in agreement and stated conditions are met) to ensure
that the vehicles used to deliver the service provide an acceptable level of
service throughout the entire contract period; and
·
The
successful bidder will be required to purchase and maintain the vehicles used
to deliver the contracted service. To
ensure vehicle suitability and comfort for customers, the bidders will have to
obtain approval from the city for the vehicles that they want to supply to
fulfill the contract(s), which must also meet the minimum vehicle
specifications, which will be included in the RFT document.
4. The bid solicitation document will contain
performance measures and service standard clauses, which will ensure a high
quality of service in areas such as service reliability, customer service,
vehicle cleanliness, safety and maintenance standards.
5. The bid solicitation document will include
provisions that minimize the City’s exposure to service disruptions.
6. The
bid solicitation document will require the successful bidder(s) to ensure that
appropriate disability awareness and sensitivity training is provided to all
drivers.
7. The
bid solicitation document will include the requirement for the successful
bidder to recognize the ATU 279 as the bargaining agent for the Para Transpo
drivers, to resolve all collective agreements via final and binding interest
arbitration and to hire all the FirstBus Para Transpo drivers required to meet
the contract obligations, in the event that the in-house bid is not
successful.
8. In
order to ensure an open, fair and transparent procurement process, the bid
evaluations will be conducted by an evaluation team comprised of senior staff
from Transit Services, Fleet
Services, Labour Relations and Supply Management, and
will be based solely on the basis of award as stipulated in the bid
solicitation document.
9. The
competitive process will be designed to ensure a fair evaluation of all the
bids, determining which will result in the best value for the City, as
evidenced by the lowest responsive bidder having passed through the
pre-qualification stage.
10. The bids
will be based on:
·
A
common Statement of Work that all bidders must respond to;
·
The
provision of adequate information so that all bidders are knowledgeable enough
to bid on an informed basis; and
·
A
fair and objective evaluation of all bids received by an evaluation team of
city staff.
Consistent with the City of Ottawa’s philosophy to
introduce an element of competition in the delivery of its services, it is
recommended that an in-house bid process be undertaken for both
wheelchair-accessible van and for non-accessible sedan service. The in-house bid approach presents an
opportunity to carefully compare the costs and benefits of contracting with
private businesses against the costs and benefits of providing the service
directly.
In order to provide a fair opportunity for the
private and public sector to participate, and to maintain a high degree of
integrity in the procurement processselection
approach, the normal bid solicitation process for the City
of Ottawa will be used. This means that
the evaluation and selection of competing in-house and external bids will be
conducted at the same time, by the same evaluators, using
the same evaluation criteria, on the basis of fairness, transparency,
prudence and probity that is normally found in public procurement
procedures.
In order to ensure a fair and transparent process, the
project will be guided by the ‘Guidelines
for the In-house Bid Process’ (Attachment 1). The
Deputy City Manager, Public Works and Services, will be the Executive Sponsor. tThe
City will establish a Bid Project
Development
and Evaluation Team for the procurement process, which will be
chaired by the Manager, Transit Service Planning and Development, Deputy City Manager, Public Works and Services, and
will include senior staff from
Transit Service Planning and Development, Para Transpo, Supply
ManagementLegal Services, Labour
Relations, Finance and Fleet Services
as well as subject matter experts, as required..
This Team, assisted by an
external Fairness Commissioner, will develop the bid document, carry out the
detailed evaluation of the responses and recommend the contract award(s).
The Bid Project
Development
and Evaluation Team
will follow stringent
guidelines for the assessment of all proposals, including those
from the in-house team, to ensure they are evaluated fairly. All proposals will be subject to the same
stringent Statement of Requirements and the
same stringent same evaluation
criteria.
A joint management/ATU team
will also be formed to develop the in-house bid for both the van and sedan
service. Key staff resources assigned
to this team will include: the Director, Transit Services, as Project
Authority; the Program Manager, Para Transpo; senior staff from Fleet Services
and Finance, as well as representatives from the Amalgamated Transit Union. The in-house team will also have the
services of a consulting team to assist in the preparation of the bid.
In keeping with the principles
of the City’s Purchasing By-Law, and the extra burden of fairness associated
with the managed competition process, a special management structure will be
put in place to ensure that a “Conflict
wallfirewall” feature exists between
members of the in-house bid team and those involved in the bid development,
evaluation and recommendation for award.
Any communications on bid-related
matters and other linkages between the two separate team members will be
severely restricted to preserve objectivity and to ensure that the integrity of
the selection process is maintained.
There will be no communications between members of these groups on bid
related matters throughout the bidding process except at bidder meetings or
other forums established under the terms of the procurement process.
In this regard, the Bid ProjectDevelopment
and Evaluation Team will be assisted by the consulting
firm, P3 Advisors, and in particular, Louise Panneton, who has considerable
experience in managed competition involving public agencies, including
oversight of the recent City of Ottawa Solid Waste Collection contracts.
The first deliverable from the
consultant is the attached will
be a formal “Guideline for the In-House Bid Process”acceptable
to the Deputy City Manager, Public Works and Services,
which will be distributed to and accepted by all staff involved in the process
in advance of the receipt of bid submissions.
This document is will
be based on the guideline used in the Solid Waste Collection
process endorsed by Council on July 13, 2005, Corporate Services and Economic
Development Committee report #32, item #18, Annex A, which was itself based on
the “KPMG Guidelines for Managed Competition” developed on behalf of the City.
The competitive process
detailed in this report will result in the most cost-effective Para Transpo
service that meets customers’ needs.
The procurement process will allow a full assessment of the options
under current market conditions in accordance with the basis of award
stipulated in the bid document, followed by the award of contract by delegated
authority to City staff in accordance with the recommendations of this report and the City Purchasing By-Law.
approved by City Council on June 14, 2006.
This procurement process
involves two stages.
Stage One – Pre-qualification of the Bidders
The
first stage is a pre-qualification of the competence and experience of the
bidder. Only those bidders responding
to the stated rating criteria in sufficient detail, and achieving a pass grade
as outlined below and defined within the bid
solicitation document will be evaluated as responsive, and considered for contract
award as the lowest responsive bidder.
It is recommended that the
in-house bid also be required to pre-qualify through this process.
Failure to achieve the minimum pass grade on the evaluation criteria, which follow in detail, will result in the elimination of the bid from further consideration, and the sealed financial bid will be returned unopened to the bidder. Note that some individual criteria (not all) include individual pass grades, which must be met, and that the cumulative score must also meet the predetermined pass grade shown.
Suggested
Criteria for RFQ stage
|
Criterion |
Available Points |
Minimum Pass % # |
|
|
QUALITY OF
SERVICE |
560 |
60 |
336 |
|
|
160 |
n/a |
n/a |
|
HR Management |
200 |
n/a |
n/a |
|
Health and Safety |
40 |
n/a |
n/a |
|
Vehicle Maintenance |
120 |
n/a |
n/a |
|
Value Added Services |
40 |
n/a |
n/a |
|
|
|
|
|
|
CAPABILITY
AND EXPERIENCE |
80 |
60 |
48 |
|
General Corporate Capability |
40 |
n/a |
n/a |
|
References |
40 |
n/a |
n/a |
|
|
|
|
|
|
KEY
PERSONNEL |
160 |
60 |
96 |
|
Senior Executive |
25 |
n/a |
n/a |
|
Transition Manager |
45 |
n/a |
n/a |
|
Operations Manager |
45 |
n/a |
n/a |
|
Maintenance Manager |
45 |
n/a |
n/a |
|
|
|
|
|
|
VEHICLE
ACCEPTABILITY |
200 |
80 |
160 |
|
Extent to which vehicle meets and exceeds the
minimum specification included in the RFT |
|
|
|
|
|
|
|
|
|
TOTAL SCORE |
1000 |
70 |
700 |
Stage Two – Evaluation of Financial Proposals
Sealed tenders from the
pre-qualified bidders through the RFQqualification
stage of the tender will be opened and reviewed by
staff for completeness, accuracy and adherence to the bid requirements. An independent analysis by an external
expert will be undertaken in order to ensure that the In-House Bid Team has
included the full cost of providing the required service. This issue will be
as detailed in the attached guideline document.
addressed
above and include such costs as personnel, equipment, vehicles, gas, utilities,
rent, building maintenance, insurance, as well as incremental direct costs.
The objective of such an analysis is to eliminate
the possibility of cross subsidization and may result in the addition of
certain evaluated costs to the in-house bid, which will
mayhave
the effect of inflating their cost proposal which would be a factor in the bid
analysis.
CONSULTATION/PUBLIC NOTIFICATION
The in-house bid process was developed following direction from Transportation Committee and Council.
FINANCIAL IMPLICATIONS
The financial implications of
the recommended Para Transpo service approach will be provided in detail when
an information report on the contract award is brought to Committee and Council
in the fourth quarter of this year and will be in compliance with Council
approved budget directions.
The
costs associated with the development of the in-house bid, the assistance of
the Fairness Commissioner and the
financial analysis of the bids by a third party are estimated to be in the
order of $100,000 and will be funded by 2006 savings of $90,000 in the
cost of O-Train insurance with the remaining $10,000 provided by reductions in
2006 discretionary expense accounts.
SUPPORTING DOCUMENTATION
Attachment 1 – Para Transpo
- Guidelines for the In-House Bid
Process
DISPOSITION
Following Council approval, the
In-House Bid Team and the Bid Project Development
and Evaluation Team will be formed and the procurement process
will be started.
ATTACHMENT 1
PARA TRANSPO
SERVICES
Guidelines for the
In-House Bid Process
DRAFT
June 14, 2006
Table of Contents
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1.0 |
General |
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2.0 |
Introduction |
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3.0 |
What is an in-house bid? |
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4.0 |
What is competitive
neutrality? |
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5.0 |
Process |
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6.0 |
Roles &
Responsibilities |
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6.1 |
Executive Team |
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6.2 |
Fairness Commissioner |
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6.3 |
Project Team |
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6.4 |
In-House Team |
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6.5 |
Private Sector Bidders |
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7.0 |
Rules of the bidding
process |
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7.1 |
Inside Information |
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7.2 |
Communications and
conflict of interest |
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7.3 |
Confidentiality |
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7.4 |
Accountability |
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7.5 |
Submission Form and
Format |
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7.6 |
Support and Financial
Evaluation |
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7.7 |
Bidding on External
Contracts |
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7.8 |
Bid Team Broad Guidelines |
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These guidelines have been developed by P3 Advisors
Inc., using the "KPMG Guidelines for
Managed Competition" which were developed for the City for the
management of the Land Ambulance program and subsequently updated and used for
the Solid Waste procurement process
last summer and fall. They have been adjusted to address the Para Transpo
services procurement and should not
be used for any other purposes.
The City of Ottawa is currently undertaking
procurement processes related to Para Transpo services. In preparation for this, the City has
decided to select a service provider(s) through a competitive process that may
include an in-house bid. There is an
existing in-house organization that could respond to the requirement. The competitive process for the provision
of the services will have to be done in a manner that is fair and
transparent. Specific processes will be
necessary in order to deal with issues such as the communications between the
In-House Team and the contracting authority, the composition of the In-House
team and their communications with other departments.
In addition, the In-House Team may enter
into the competitive process with several advantages; it does not pay business
taxes, no profit has to be earned and the cost of capital may be cheaper. Also the team itself will not have to assume
the financial repercussions of the risk of cost overrun, liabilities or
contractual compliance that a private sector organization would normally
bear. Both service delivery options may
offer advantages:
|
Advantages of the
In-House Team |
Advantages of a Private
Sector Team |
|
Employees own knowledge |
Marketplace awareness |
|
Know customer
needs well |
Outsourcing
experience |
|
Do not need to
make a profit |
Easier access
to joint venture opportunities |
|
Can rework
processes to reduce costs |
Tighter
financial management |
|
Should meet
technical compliance requirements |
Faster
response time |
|
Service Level
Agreement |
Freedom from
government regulation, policy |
|
No strike
mandate |
No strike
mandate |
|
Savings are
retained within the City |
Flexibility
with respect to Employment rules |
|
Do not incur
overhead costs such as financial security, business tax |
Flexibility
with respect to adjusting the services |
|
|
|
It is acknowledged that the
specific advantages will depend on the initiative. The objective of the competitive procurement process is to choose
the best value supplier arrangement regardless of whether the supplier is an
in-house or an external service provider.
The Para Transpo service procurement process will lead to the selection of the lowest cost, qualified and
responsive bidder. In order to be open,
fair and transparent, the selection should be based on a fair evaluation of
both in-house and private sector bids using the same Statement of Work (SOW)
and evaluation criteria.
An in-house bid is generally prepared by the
individuals who are currently carrying out the services or have the
capability/capacity to carry out the services.
Management of the in-house operation must be within the department to be
considered a bid that is truly an in-house bid. If the in-house bid is to be successful, it will need to
demonstrate that the team can transition the organization and services in a
manner that provides value for money, including performance and cost
effectiveness. This could entail
redesigning key processes, reviewing the scope of activities contracted, and/or
adopting new technologies, equipment and approaches.
While approaches to service delivery can be
put forward in preparing an in-house bid, a successful bid will result in a
team that remains within the City and therefore subject to the organizational
constraints. Existing employment
policies and collective agreements will still apply, as will procedures and
regulations related to procurement and administrative services.
Competitive neutrality means designing a set of
policies and legal arrangements which ensures that all individuals and
organizations - public, for-profit, and non-profit - are treated in an equal
manner in the bidding process. To the extent possible, all protections and
special privileges that public units usually enjoy over private firms simply by
virtue of public-sector ownership should be removed, as should barriers that
hamper the public-sector unit's ability to increase productivity and therefore
compete effectively with the private sector.
To create a level playing field in a managed
competition, the City must do many things that would not be necessary if the
service was to be contracted out only to private entities, including: determine
the Full Costs[2] of in-house service; build
a conflict wall between the government as purchaser and the government as
service provider; and make transparent any differences between the public and
private sector bids.
Public entities often do a poor job of ensuring
competitive neutrality. Anti-competitive practices include: failing to fully
cost out in-house services; requiring excessive performance bonds from private
firms; rejecting lower cost bids from private firms; and permitting In-House
Teams to adjust their bids after seeing the private sector bids. The processes adopted by the Project Team
should ensure that they approach the selection of the service provider in an
open, fair and transparent manner.
In order to remain open,
fair and transparent, the in-house bid will be treated in the same manner as
external bids, unless the differences or exceptions are specifically identified
in the Procurement Documents[3] that are made
available to all bidders. The evaluation
and selection of the responses for the Request for Tender (RFT) will be
evaluated in two phases, the technical evaluation and financial evaluation will
be conducted consecutively, by the same evaluators, on the same basis of
fairness, transparency, prudence and probity.
The first phase will involve the evaluation of the mandatory and related
technical criteria. Proponents who do
not satisfy the mandatory requirements and achieve the mandatory thresholds on
the rated criteria will not be evaluated further and their financial submission
will be returned to them unopened. For
the remaining qualifying Proponents, the financial submissions will be
evaluated solely based on lowest overall cost.
The In-House Team should
understand these stages in detail before it begins to mobilize. Competition does not require the
elimination of any initial advantages held by the In-House Team, and clearly if
one approach has superior characteristics, it is the approach that should be
used. However, the competitive process
has been designed to ensure a fair
evaluation of all the bids, determining which will truly result in the
best value for the City. The response
must be based on:
·
a common Statement of Work that all bidders must respond to;
·
the provision of adequate information so that all bidders are
knowledgeable enough to bid on an informed basis;
·
a fair evaluation of the cost to the City of both in-house and
external bids; and
·
an objective evaluation of all bids by an independent
evaluation team.
For each situation where an
In-House Team will assemble a bid, a special management structure will be put
in place to ensure that a “conflict wall” feature exists between members that
are part of the In-House Team and those that are involved in the development of
the tender documents and the selection of the winning bid. The conflict wall must be sufficiently
well-defined, to ensure probity is maintained and to ensure probity is seen to
be maintained. It must ensure that the
In-House Team does not have access to information during the procurement
process that would provide them with an unfair advantage. Furthermore, the Project Team must be
sufficiently isolated that they can make a fair and unbiased evaluation of the
submissions and approaches that are put forward by all participants. “Fair play” begins
with the management structure that has been adopted to oversee the process and
tendering for service providers. The
structure, roles, and responsibilities are depicted below.
The Executive
Sponsor is ultimately accountable for ensuring the integrity of the contracting
process. In doing so, the Executive
Sponsor would resolve specific policy issues that may arise, ensure that the
“conflict wall” is maintained, and endorse the overall contracting plan. The Executive Sponsor also has the authority
to approve the recommended service provider or choose an appropriate course of
action based on the recommendation made as a result of the bidding and
evaluation processes. They are
responsible for addressing the Fairness Commissioner's concerns, should any
arise during the procurement process.
The Executive Sponsor is generally removed from direct input into the
selection process and the bid prepared by the In-House Team. This step is designed to avoid the
perception of conflict of interest and claims by bidders or third party
advocates by removing Executive Sponsor from direct on-site decisions/actions
that relate to the in-house bid.
The Executive
Sponsor will also conduct an internal audit of the breakdown of the costs
associated with the in-house bid in order to ensure that the financial
submission includes the Full Costs. The
Executive Sponsor will draw upon the expertise of resources appointed by the
City's internal audit team. Once the
contract is awarded, should the in-house bid be successful, the Executive
Sponsor will be responsible for hiring and managing an external auditor who
will undertake an annual audit of the costs incurred by the team compared to
their submitted price in order to certify compliance.
The Fairness
Commissioner is an independent external resource who ensures that the process
is managed fairly and that the in-house bid is evaluated according to the same
criteria as the external bids. During
the evaluation process, the Fairness Commissioner will validate that the
in-house bid has incorporated all Overhead Costs in their bid. The Fairness Commissioner will:
·
Prepare a Code of Conduct for the In-House and Project Teams;
·
Conduct an initial meeting to include both teams
and to clarify roles and responsibilities;
·
Review procurement documents and provide any
comments on process and evaluation criteria;
·
Ensure compliance with evaluation process and
proper use of assessment tools in conjunction with Supply Management staff
whose function will be to facilitate the evaluation and consensus building,
where applicable;
·
Monitor communications with bidders to ensure
consistency and transparency;
·
Ensure that there is adequate documentation of the
process;
·
Certify that the evaluation process was fair, open
and transparent; and
·
Oversee the negotiations in order to ensure the
integrity of the process.
The Project Team
develops the Statement of Work and evaluation criteria. They develop the Procurement Documents,
oversee the process of inviting submissions, undertake the evaluation process
and recommend selection of a preferred service provider.
The Project Team
will be chaired by the Manager, Transit Planning and Development, it will
include:
a)
Transit Service Planning and Development Representative(s)
b)
Para Transport Representative(s)
c)
Supply Management Representative(s)
d)
Labour Relations Representative(s)
e)
Fleet Services Representative(s)
f)
Subject Matter Experts, as required.
The Project Team members may assume a number of
different roles (e.g. evaluation, document development, etc.) and do not
necessarily have to be participants of all of the different processes that are
undertaken throughout the process.
The Project Lead[4] shall provide
the Fairness Commissioner with a list of the Project Team members, who will be
required to confirm that they have read, understood and will abide by the Code
of Conduct.
The In-House
Team assembles the appropriate resources, develops a response strategy and
prepares a credible and competitive bid.
The In-House Team is responsible for developing and submitting the bid
and for ensuring that all the terms and requirements of the Statement of Work
included in the Procurement Documents are addressed.
a) In-House
Bid Team
The
In-House Bid Team provides the authority, leadership and resources required to
ensure an effective bid is developed.
Sponsorship may take the form of a visible endorsement to rally the team
and staff of the entity and advice on proposed changes to structure and
process. The In-House Bid Team would be
involved in developing overall strategy during the development of the bid. They should ensure adequate financial and
personnel resources are made available to support the preparation of bids. The In-House Bid Team also reviews and
provides final approval of the bid to ensure that it reflects Full Costs and
complies with relevant rules, acts and regulations.
The In-House
Team may be approached by private sector suppliers who wish to participate in
the in-house bid development as "Bid Support Resources" - or the
In-House Team may decide to strengthen its bid by seeking such a partner. If the In-House Team and private sector
supplier decide to pursue a collaborative arrangement, an agreement is
typically signed to confirm the terms of the relationship. In all cases, the In-House Team maintains
the lead for submitting the in-house bid and must declare any such arrangement
within its bid.
The In-House
Team must not establish partnerships, sub-contract agreements or other forms of
relationships with the Bid Support Resources in order to avoid usual municipal
practices. They can, however, enter
into contractual relationships with the private sector to complement their
approach in submitting their bid.
However, these contractual relationships with the private sector must
include automatic termination in the event that the In House bid is not
successful.
c) Employees
If there are
in-house employees currently performing the services, the In-House Team will
need to maintain ongoing communications with the employees at each step of the
process. Employees may also be called
upon to generate ideas on service improvement opportunities and to propose new
and innovative methods of service delivery.
The In-House
Team is not precluded from any involvement with the current service delivery
personnel. Valuable information can be
obtained about the current delivery of the services and what will be necessary
to move it to a higher performance delivery mode, including management
expertise, current operating procedures, particulars of facilities that may
constrain certain practices etc. While
the employees will not be involved in bid strategy, they will be a good source
of information and support. This will
aid in the change management process that will take place if the In-House City
Team is the successful proponent.
The In-House
Team should invite the early participation and support of the union(s). Union representatives may be called upon to
participate in the overall development of the In-House Team strategy, and to
help the In-House Team generate the overall support and interest of employees
in the bid preparation process.
The In-House Team or Project Manager[5] shall provide
the Fairness Commissioner with a list of the In-House Team members, who will be
required to sign a Code of Conduct and return it to the Fairness Commissioner.
All private
sector bidders are responsible for responding to the terms and conditions
stated in the Procurement Documents at the same time as the In-House Team (as
applicable).
The following
deals with issues that must be considered as part of the development of an
in-house bid.
Staff, the
current service provider, or any representative on the In-House Team, is likely
to have inside information based upon history and long-term relationships. It is to be noted that information about the
current operation does not, in itself, constitute a conflict of interest. It is only inside knowledge about the
specific content of the Statement of Work, the Procurement Documents or the evaluation
criteria or any influence on the content of these documents that could put an
In-House Team member in a conflict of interest situation and disqualify the
bid. Measures must be put in place to
ensure that this does not happen.
Communications on
bid related matters and other linkages between the Project Team members and the
In-House Team members are severely
restricted to preserve objectivity.
The In-House Team and the Project Team must not communicate on bid related matters at any time during the
bidding phase except at bidder meetings or other forums established under the
terms of the Procurement Documents. The
'Conflict Wall' is not to be crossed during the bidding process.
Members of the Project and
In-House Teams will be required to confirm that they have read, understood and
will abide by a Code of Conduct confirming that they will act diligently and
fairly throughout the process.
Where a staff
member’s objectivity may be in doubt, it is the Project Manager's
responsibility “to ensure that if an individual has a conflict then it is
declared and/or identified and appropriately managed and monitored.” Conflict
of Interest will be reported to the Fairness Commissioner who will provide
guidance on how to address the situation in a fair and equitable manner.
Any or all employees of the
City, including the In-House Team members, shall not issue any publicity or
news releases pertaining to this procurement process or any agreement awarded
under this process, without the prior written approval from the Executive
Team. Any media inquiries made to any
team member must be forwarded to Executive Team members for response. No team member will discuss any aspect of the
bid or process, nor provide information to the news media.
All material, data, information, or any item in any
form supplied by the City or derived from any data (“Confidential Material”)
which the In-House Team may have acquired in connection with this procurement
and negotiation process or any portion of this process, both before and after
the issuance of the Procurement Documents:
(a) is the property of the City and must be
treated as confidential;
(b) is not to be used for any other purpose
other than replying to this City and the fulfilment of any subsequent agreement;
and
(c) must not be disclosed without prior
written authorization from the City.
Confidential
information does not include information that:
(a) is known to the public at the time such
information was made available to any team members other than through a breach
of an Agreement;
(b) is known to the public after the time
such information was made available to any team member other than through a
breach of this Agreement; or
(c) is
required to be disclosed by applicable law, but prior to such disclosure, and
to the extent feasible, the Executive Team shall be consulted as to the
proposed form and nature of the disclosure.
If the in-house
bid is successful, a Statement of Work and/or Service Level Agreement —
equivalent to a contract — will be signed between the Executive Team and the
In-House Team as the basis of the accountability framework. The Service Level Agreement will describe
the responsibilities, terms, duration, conditions, performance or standard
levels, resourcing, etc., to be met by both parties, as outlined in the SOW and
proposed by the winning in-house bid.
The specifications and conditions that are spelled out in the
Procurement Documents should deal with how performance will be monitored, what
the outcomes will be in the event of “default” (failure to deliver certain
products or to meet cost criteria), how disputes will be resolved (including,
if applicable, escalation process), how changes to the requirements will be
dealt with and the provisions for early termination. It is understood that, should the in-house bid be successful, the
City will undertake an annual external audit in order to obtain certification
that the Full Costs incurred by the In-House Team are within the price that
they submitted in their bid.
The procurement process established by the City
must clearly lay out any exceptions that are granted to the In-House Team. The In-House Team will be required to submit
a bid in response to the RFT and comply with the bid requirements, with the
exception of items that are specifically stated in the procurement
documents. For example, the
requirements listed below would be addressed as follows:
1)
Corporate Resolution and
Incorporation Document: The In-House Team will be required to provide some form of approval
demonstrating that it has the authority to bid at the RFT phase.
2)
Proponent's financial
structure Audited (or certified by a Certified Accountant): not required
for the In-House Team bid.
3)
Certificates of Insurance: not
required for the In-House team bid.
4)
Evidence of financial
stability: not required for the In-House Team bid.
5)
Commitment for a Letter of
Credit: not required for the In-House Team bid.
6)
Workers' Safety and
Insurance Board of Ontario Clearance Certificate: not
required for the In-House Team bid.
In a true
competitive process the in-house bid is treated in the same manner as the
external bids. During the procurement
process, the In-House Team will be required to demonstrate that they have been
authorized to bid.
All submissions will be delivered to the Project
Team,
in accordance with the specifications in the Procurement Documents and in
advance of the stated deadline for receipt of bids, who will open and evaluate
the bids using the same criteria for all bids.
This is the area where the
private sector bidders tend to focus their scrutiny of the in-house bid. Bids should be compared on the total costs
to the municipality, which would include monitoring costs (e.g. the cost of
preparing the external audit or providing the internal audit opinion on the bid
back-up documents). The in-house bid
should include all relevant costs for personnel, equipment, vehicles, vehicle
maintenance, gas, utilities, rent, building maintenance, insurance, etc. Any reasons for including or excluding any
relevant cost information should be fully disclosed. This process is undertaken in order to ensure that:
·
There is no cross subsidization
·
Relevant Overhead Costs are included in
the Full Cost
·
The cost of capital[6], capital
requirements and replacement reserves[7] are included in
the Full Cost
·
The cost related to outside expertise is included in
the Full Cost.
The In-House
Team must include in its bid cost all incremental direct costs to the
Department of support received in preparing its bid, including the hiring of
consulting firms for professional advice and support as well as administrative
supplies and support. Bid preparation
can be a time consuming process and requires a considerable level of
effort. This effort must be highly
focused over a short period of time.
The In-House Team may also require subject matter expertise to help
support its analysis in the more technical areas of its bid and to help
challenge assumptions.
Bids are to be
evaluated based on "total costs", as stated in the Procurement
Documents.
The Full Cost will take
into consideration risk factors, and their related cost, for the in-house bid
and the private sector bids.
Unless specifically authorized in the resolution issued by Council, the In-House Team will not bid on external contracts.
Appendix A includes some
broad "dos and don'ts" for
In-House Team members, the Project Team and City staff in order to maintain the
probity of the process, and avoid any real or perceived conflict of
interest.
Appendix
A
|
Dos &
Don'ts for the In-house Team Members |
|
|
Do |
Don't |
|
Continue to: ·
provide the services ·
act in the best interest of the City ·
apply diligence and professionalism throughout the process |
Communicate or discuss
information concerning an in-house bid with any other person who does not
have a "need to know" (including suppliers) |
|
Declare any conflicts of
interest or perceived conflicts of interest |
·
Accept or solicit gifts, favours, gratuities, free lunches,
etc., from potential suppliers or contractors in the competitive bidding
process ·
Grant special assistance or favours to former employees, who
are working for suppliers or contractors for the activity |
|
Take into consideration
knowledge and known information about the services |
Use privileged or confidential
information that was not provided as part of the procurement process in
submitting the bid |
|
·
Be specific and complete in responding to the Procurement
Documents, the Project Team will not be allowed to use any information
during the evaluation, other than the information directly included in the
bid ·
Comply with all Procurement Document requirements, where
they are unclear formally ask a question |
Reference information or
documents that are in the City's possession |
|
|
Accept development
support (funding/assistance) from any agency, organization or individual
unless you have officially established an agreement (which must be declared
in the bid) and includes all funding support in your bid development costs |
|
Dos &
Don'ts for City employees (not on either Team) and Project Team |
|
|
Do |
Don't |
|
Continue to ·
act fairly ·
observe high standards of conduct so that the integrity and
impartiality of the procurement process is preserved ·
be independent and impartial ·
not be influenced by self-interest, outside pressure, political
considerations or fear of criticism ·
treat all interested parties with respect ·
act with honesty and integrity |
Allow past or existing
financial, business, professional, family or social relationships or
responsibilities to influence conduct or judgment |
|
Contact the Executive Team
if you have any inquiries about the competitive process |
Answer any question from a
supplier for the delivery of services.
The inquirer is to be referred to the Project Team, in accordance with
the process set-up in the Procurement Documents. |
|
Notify your Executive Team
if you are approached by a supplier, |
Divulge commercially
sensitive information |
|
Advise the Executive Team
if you are aware that you are involved in a situation of conflict of interest
or perceived conflict of interest |
|
|
Consider only information
contained with the bid submissions when evaluating both the in-house and
other bids |
|
[1]
http://www.privatization.org/database/practicesandstrategies/managed_competition_quick_guide.htm
- Condensed from: Eggers, William D.
Competitive Neutrality: Ensuring a level playing field in managed competitions.
Reason Public Policy Institute. March 1998.
[2] Full Costs mean all relevant incremental direct
operating costs of providing the service, includes: labour costs, vehicle
costs, material and supply costs, fleet garage and maintenance costs,
insurances, other indemnification tools and any other relevant costs required
to provide the service. It also
includes any incremental direct or indirect overhead costs of providing the
service. For greater certainty,
incremental costs are costs that would otherwise not exist if the City was not
successful in winning the bid
[3] Procurement
Documents mean the technical, contractual and financial section of the RFT,
including any addendum
[4] Project Lead means the member of
the Project Team who is responsible for managing the process from beginning to
end. They also participate in the
evaluation process.
[5] Project Manager: the member of the In-House Team who is
responsible for leading the bid development from beginning to end.
[6] Interest expense on borrowed funds and debt should also be
included in total costs.
[7] Assets such as buildings, computers and heavy equipment
lose their value over time and are either dumped, sold, overhauled, or
replaced. The cost of this loss in
value is the asset’s depreciation cost.
Therefore, depreciation costs, or replacement reserves must be figured
into the total cost of a particular activity.