1. SOLID WASTE SERVICES-COLLECTION CONTRACTS: IN-HOUSE BID AUTHORITY-MANAGED COMPETITION

SERVICES DE GESTION DES DÉCHETS SOLIDES : CONTRATS DE COLLECTE-CONCOURS GÉRÉ À L’INTERNE

COMMITTEE RECOMMENDATION

That Council approve that the Environmental Services Department establish an “In-house bid team” to prepare and submit a “City bid” for the curb side residential waste collection services, through a managed competition process, in all contract areas.

RECOMMANDATION DU COMITÉ

Que le Conseil approuve que les Services environnementaux mettent sur pied une « équipe interne de soumissions » chargée de préparer et de soumettre, par l’intermédiaire d’un processus encadré de concours, « une soumission de la Ville » pour les services de collecte des déchets domestiques en bordure de rue.

Documentation

1. Deputy City Manager, Infrastructure Services and Community Sustainability report dated 9 May 2011 (ACS2011-ICS-ESD-0019)

2. Extract of Environment Committee Draft Minutes of 17 May 2011.

Report to/Rapport au :

Environment Committee /

Comité de l'environnement

and Council / et au conseil

9 May 2011 / le 9 mai 2011

Submitted by/Soumis par : Nancy Schepers, Deputy City Manager/Directrice municipale adjointe, Infrastructure Services and Community Sustainability/

Services d 'infrastructure et Viabilité des collectivités

Contact Person/Personne ressource : Dixon Weir, General Manager / Directeur général

Environmental Services / Services environnementaux

(613) 580-2424 x22002, dixon.weir@ottawa.ca

City Wide/à l'échelle de la Ville

Ref N°: ACS2011-ICS-ESD-0019

SUBJECT:	SOLID WASTE SERVICES-COLLECTION CONTRACTS: IN-HOUSE BID AUTHORITY-MANAGED COMPETITION

OBJET :	SERVICES DE GESTION DES DÉCHETS SOLIDES : CONTRATS DE COLLECTE-CONCOURS GÉRÉ À L’INTERNE

REPORT RECOMMENDATION

That the Environment Committee recommend Council approve that the Environmental Services Department establish an “In-house bid team” to prepare and submit a “City bid” for the curb side residential waste collection services, through a managed competition process, in all contract areas.

RECOMMANDATION DU RAPPORT

Le Comité de l’environnement recommande l’approbation par le Conseil de ce qui suit que les Services environnementaux mettent sur pied une « équipe interne de soumissions » chargée de préparer et de soumettre, par l’intermédiaire d’un processus encadré de concours, « une soumission de la Ville » pour les services de collecte des déchets domestiques en bordure de rue.

BACKGROUND

The current solid waste collection contract, Curb side Residential Solid Waste Collection Contract (02105-91027-T02) will expire on May 31, 2012, necessitating the need to tender this contract. The service contract is divided into multiple geographic service areas or zones. This facilitates the possibility of multiple contractor service deliveries and increases market competitiveness. Recognizing the extensive lead time required to receive necessary equipment, it is important that contract awards occur by the fall of 2011.

In 1998, then Regional Council adopted a “Managed Competition Protocols” for waste collection services. This protocol was established to provide both the accountability and transparency that could allow for the preparation and submission of an in-house bid for residential curb side waste collection services. In 1999, City staff competitively bid on the residential collection contract and was awarded one zone with service starting on June 1, 1999. The City competitively bid on the following round of collection contracts and was awarded a zone with service starting on June 1, 2006.

City staff is currently providing waste collection services to approximately 47,000 homes, or 20 per cent of residents receiving curb side collection service.

DISCUSSION

Residential Curb Side Collection

Since June 1, 1999 residents have benefited from the City’s involvement in the collection of solid waste. From a financial perspective, the City achieved the anticipated savings predicted by its original competitive bid estimates (in comparison to the next lowest bid). Table 1 below presents the current and total contractual, operational and overall savings to area residents achieved by the In-house collection group based on the contract that commenced in June 2006. The contract is structured to be paid at the bid unit rate for the actual tonnage collected.

Table 1: Financial Performance of the In-house Collection Group

	Current Contract	Current Contract	Current Contract	Current Contract	Total Savings
	Year 1	Year 2	Year 3	Year 4
	2006-2007	2007-2008	2008-2009	2009-2010
Savings from City Bid	$1,101,647	$ 977,689	$731,338	$781,024	$3,591,699
Additional Savings from In-house Collection Operations	$ 254,367	$ 498,847	$243,282	$213,996	$1,210,492

Total Savings	$1,356,014	$ 1,476,536	$974,620	$995,020	$4,802,190

The In-house collection for Zone C3 resulted in an operating surplus for Year 4 of $213,996 and a cumulative operating surplus to residents of $1,210,492 since the contract started in 2006.

Beyond the financial savings realized by the City with the in-house service delivery, the direct involvement in solid waste collection service delivery has provided Solid Waste Services’ staff with both a more complete understanding of waste collection challenges as well as an ability to pilot various alternative service delivery options with maximum flexibility and minimal financial penalty. The City’s In-house Waste Collection section has been willing to participate in implementing pilot projects. They have provided valuable feedback on collection costs, vehicle trials and organics container suitability from the operator’s point of view. This experience has assisted the City to make practical advancements in recycling and organics trials.

Managed Competition Process

A Fairness Commissioner, an independent consulting company, has been retained by the City of Ottawa Supply Branch to ensure that the City’s bid process is consistent with In-house bid “Managed Competition Protocols” of 1998. This procedure is intended to ensure a fair, open and competitive process for all participants.

With Council’s approval of the preparation and submission of an In-house bid, it is further recommended that the Fairness Commissioner oversee the Managed Competition Process. The Fairness Commissioner will be closely involved with the preparation of the guidelines and is intended to remain with the bid process through the evaluation process.

RURAL IMPLICATIONS

There are no rural implications

CONSULTATION

No public consultation has been undertaken for this report.

COMMENTS BY THE WARD COUNCILLOR(S)

This is a City-wide report and comments by the Ward Councillors were not required.

LEGAL/RISK MANAGEMENT IMPLICATIONS

There are no legal/risk management impediments to implementing the recommendation in this report.

CITY STRATEGIC PLAN

This report is in accordance with the service delivery priority to “Deliver agreed to level of service at the lowest possible cost.”

TECHNICAL IMPLICATIONS

There are no technical implications.

FINANCIAL IMPLICATIONS

There are no direct financial implications from approval of the process outlined in this report. Allowing the City to bid on the contracts will generate more competitiveness and could result in cost savings to the City. Any direct budget impacts from the pending competition will be reported to City Council prior to award of the contract, and/or with submission of the Draft 2012 Operating Budget.

DISPOSITION

With Council’s approval, an “In-house Bid Team” will be established for the purpose of submitting a bid. The Evaluation Team will report back to Committee and Council with its recommendation for awarding the contract.