Case study 6 - Doncaster - Wrap

Bulky Waste Guidance: Case study 6 - Doncaster
Subcontracted bulky household waste
collections: Doncaster

Bulky Waste Guidance: Case study 6 - Doncaster
Introduction
The Mayor‟s Zero Waste Strategy was developed in 2004; a number of Zero Waste goals were
included:
• 75% of Doncaster households actively participating in recycling activities by end of 2008; and
• at least 500 jobs will have been created/protected by the implementation of the strategy by the
end of 2010.
One of Doncaster Metropolitan Borough Council‟s (DMBC) key policies is to seek opportunities to work
in partnership with others in the pursuit of their waste strategy. The council has been supportive of
third sector partners who have played a key role in developing its waste management services.
The first integrated waste (refuse and recycling) collection contract between DMBC and SITA GB Ltd
started in 2003. SITA was contracted to collect all household waste including dry recyclables,
compostable garden, bulky household and residual waste. Doncaster Refurnish was operating in the
Borough before SITA was awarded the collection contract.
Established in 2003, Doncaster Refurnish collects unwanted furniture and electrical appliances from
households and businesses in Doncaster and surrounding areas. These resources are available to
help people set up home in an economically sustainable way, reducing poverty and reliance on debt
finance. In the process of collecting, re-using and recycling household items, Doncaster Refurnish
provides a volunteering, work placement and training programme to those facing long-term
unemployment, mental health issues and those disengaged from mainstream society.
In 2009/10 it employed 37 people and provided flexible self-employment opportunities to nine others.
It provides 133 volunteering placements, giving work-based and accredited training to socially
disadvantaged people, thereby increasing their employability, self-esteem and skills.
A new collection contract between DMBC and SITA started in October 2009. At the same time, SITA
subcontracted Doncaster Refurnish to collect all bulky waste, including WEEE items, for six years.
Key facts
• The contract started in October 2009 and runs for 6 yrs.
• A sub-contracted with the main contractor being SITA GB Ltd.
• EU Procurement rules applied and a restricted procurement process was used.
• Bulky waste collection is charged for.
• Reuse rate: 65% (April 08 – Mar 09).
• Tonnage diverted: 488 tonnes of bulky waste (April 08 – Mar 09).
• Number of collections: 11,977 (April 08-Mar 09)
• Disposal cost savings: £25,000 approx.
• Low income households assisted: 4,264 with low cost furniture & household goods.
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Bulky Waste Guidance: Case study 6 - Doncaster
About Doncaster
• Doncaster is in South Yorkshire and covers 250 square miles.
• It forms part of the largest metropolitan area outside London, and has a population of around
291,100.
• Predominately urban, 11 out of 21 wards are in the bottom 10% in the indices of multiple
deprivation (IMD) in England.
• Doncaster is a relatively deprived area, with more unemployed people than in other areas in
Yorkshire and the Humber.
• Earnings and skills levels are lower than the average in Yorkshire and the Humber and nationally.
Background
In October 2003 a reuse-only bulky waste service from households commenced. The original
arrangement was the result of a series of meetings (over a period of two months) between major
stakeholders:
• DMBC Waste Management Head of Service;
• DMBC Neighbourhood Renewal Fund (NRF) Manager;
• SITA GB Ltd Contracts Manager; and
• Doncaster Refurnish Strategic Development Manager.
The objective was to explore and improve DMBC‟s social and environmental activities, and for
Doncaster Refurnish to access greater quantities of reusable furniture and household goods.
Doncaster Refurnish outlined how their work would assist other council departments (social services,
the homeless section and the asylum team) to source affordable furniture for their clients, as well as
providing an environmental service with the reuse and recycling of unwanted household furniture.
The 2003 contract written by DMBC contained a clause giving the winning contractor the power to
subcontract or reassign a proportion of the services required. SITA, as winning bidder, did not view
the bulky collection as profitable, and it did not have a mechanism for reusing bulky waste. However,
they were open to working with the community sector to achieve value for money for the Council.
DMBC and SITA used this clause to assign responsibility for collecting reusable furniture to Doncaster
Refurnish. Refurnish was the only furniture reuse organisation in the borough with the capacity to
reuse significant amounts of bulky waste.
Doncaster Refurnish did not receive a formal contract at this point in 2003. The only legal security
awarded to Doncaster Refurnish was the signature of DMBC‟s Head of Waste Services, at the foot of a
letter that outlined the operational detail of the reuse service. Officially, Doncaster Refurnish was
subcontracted by SITA, but there was no legal documentation which clearly stated the terms and
conditions of this partnership between the two parties, such as the service, fees, key performance
indicators (KPI) or get-out clauses.
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Bulky Waste Guidance: Case study 6 - Doncaster
However, DMBC made it contractually clear with the main contractor that any changes to the
subcontracting assignment should first be approved by them, thereby offering some protection to
Doncaster Refurnish regarding the continuation of their involvement in the reuse service. Doncaster
Refurnish invoiced SITA for the number of furniture reuse collections it made per month; SITA then
invoiced DMBC.
The service began as a six-month pilot with the approval of Doncaster MBC. In the six-month trial
period, the performance targets, based upon Doncaster Refurnish capacity at that time, were met.
These were:
• the creation of 7 full time jobs;
• increasing reuse in the borough by 20%; and
• increasing the provision of affordable goods to local communities by 20%.
The success of the trial was reliant on the receipt of Neighbourhood Renewal Funding (NRF). This
money enabled recruitment of a contract manager, three drivers, three loaders, two additional 3.5
tonne vehicles, insurance, transport costs, vehicle sign writing and marketing. The service was
designed to receive calls through DMBC‟s call centre. Reusable collection requests were diverted to
Doncaster Refurnish and waste collections through SITA.
In order to support the trial, DMBC introduced a policy whereby reusable collections were free of
charge to the resident but non-reuse collections were charged. SITA then paid Doncaster Refurnish a
fee per collection on a monthly basis.
The number of bulky reuse collection requests received by Doncaster Refurnish in the six-year period
between 2003-2009 increased by 75%.
Doncaster Refurnish monitored and evaluated its activities, including: the number of jobs,
volunteering and training opportunities created; the number of collections completed; tonnage
diverted from landfill; and the number of households accessing affordable goods. This enabled DMBC
to easily identify the positive impact and outcomes the arrangement was having in the area.
The strength of the partnership arrangement was tested during the 2007 floods in Doncaster. Many
residents accessed the service in a short period of time, not only to obtain goods to replace those
ruined in the floods, but also to donate to those who were needy. Although the workload increased
dramatically, the service was still delivered to a high standard.
2003/4 2004/5 2005/6 2006/ 2007/8 2008/9 Total
Collections 2,021 6,206 11,977 14,993 14,329 11,977 61,503
Tonnage Collected 176 518 878 930 801 706 3,833
No. of Items 5,879 17,169 26,467 30,843 27,742 25,697 127,918
Recycled/Reused
(Tonnes) 79 238 457 605 551 488 2,339
Recycling/Reuse
Rate 40% 46% 52% 65% 69% 69%
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Bulky Waste Guidance: Case study 6 - Doncaster
Households
receiving goods 1,341 1,900 2,248 3,787 4,068 4,262 17,606
The approach
In September 2008, twelve months before the existing waste management contract was due to
expire, DMBC began to explore the possible social, environmental and economic improvements that
could be made to its future bulky waste collection service, using Doncaster Refurnish performance as
a benchmark. To ensure that these elements were considered, the council placed a requirement
within the contract that successful bidders were to work with a third sector organisation on resource
recovery, particularly in the area of reuse and recycling.
A new, six-year integrated waste collection contract with a value of £5.7 million was tendered, with
the option to extend for a further three years. Maximising reuse from the bulky household waste
stream was a key priority. DMBC adopted a restricted procurement process.
For information on procurement processes see `The Legal Framework for Local Authorities‟ which can
be accessed through the main Bulky Waste Guidance webpage.
SITA‟s contract was extended for another year to cover the scoping exercise and to ensure an
uninterrupted collection service. DMBC‟s timetable for procurement was as follows:
July 2008:
Tender advertised on the Supplier and Contract Management System (SCMS)
system and OJEU site
August 2008: Deadline for Pre-Qualification Questionnaires (PQQ‟s)
December 2008: Invitation to Tender (ITT) released.
March 2009:
Deadline for Tenders
April 2009:
Contract Awarded
DMBC largely operates service-based procurement; departmental staff define the required services,
and manage the procurement process with support from the procurement and legal team. All
contracts are advertised on the Supply Contracts Management System (SCMS), a web-based supply
and purchasing portal for Local Authorities.
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Bulky Waste Guidance: Case study 6 - Doncaster
Extract from the bulky household waste service specification
• In order that the Council can assess Tenderers on the strength of their willingness to cooperate
with this Clause it is required that each valid Tender contains a detailed plan of the
proposal to achieve the Council‟s aims for regeneration and reuse of materials.
• The award of the Agreement will be positively influenced by the inclusion in the Tender of a
clear commitment to the provision of activities aimed at reusing materials where possible.
Specifically Tenderers should outline their proposals for a furniture recycling programme
that will ensure that unwanted furniture uplifted from properties will not be placed in landfill
sites but will be repaired and re-introduced as a desirable consumer item at a competitive
price. This ensures the reuse of goods meets with the Council‟s social inclusion objectives.
Once the OJEU notice was published, Doncaster Refurnish commenced a three month exercise of
presenting their credentials to nine waste management companies whom they assumed would be
bidding for the contract.
As Doncaster Refurnish could no longer rely upon grant funding in their bid, they priced their service
on a full cost recovery basis over the six-year contract period, using a standard 3% inflationary price
increase per annum. DMBC accepted the new full cost recovery model, and the suggested efficiency
saving, which was the result of a change in the size of collection vehicles from 3.5 tonnes to 7.5
tonnes.
Doncaster Refurnish could demonstrate a six-year track record of collection, reuse and recycling of
unwanted furniture and household goods; it was an Approved Authorised Treatment Facility (AATF)
able to handle and process WEEE; and was an ISO 9001, 14001 and 18001 accredited organisation
(certification obtained early 2009) and could therefore fulfil the requirement of DMBC for
subcontractors to have QMS.
In April 2009, SITA GB Ltd was awarded a new six-year household waste collection contract, with an
optional extension of three years. The subcontract between SITA and Doncaster Refurnish, providing
the full bulky household waste collection component, commenced in October 2009.
Collections and fees
The agreed payment fee is based on the cost of Doncaster Refurnish providing an estimated 22,000
collection requests per annum. This figure was established by combining Doncaster Refurnish annual
number of collections and those achieved by SITA.
A set annual fee may result in financial losses for the collections operator if capacity exceeds service
demand, steps were taken to reduce risks and liabilities.
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Bulky Waste Guidance: Case study 6 - Doncaster
• Doncaster Refurnish adopted a flexible operating structure, e.g. a percentage of the collection
crew are temporary workers and premises lease break clauses have been negotiated to be a
maximum of one month.
• Marketing and partnership working are also key to maintaining participation and collection rates,
and therefore DMBC ensures that it promotes a strong, on-going message about both reuse and
the collection service that Doncaster Refurnish provides.
TUPE - Transfer of Undertakings (Protection of Employment Regulations)
TUPE rules applied because Doncaster Refurnish took on the whole bulky household waste (BHHW)
collecting contract. As Doncaster Refurnish took on the extra 10,000 collections from SITA, two
drivers and two loaders were employed by SITA to perform bulky collections. Doncaster Refurnish was
legally obligated to employ these workers under TUPE regulations. In any event, they needed the
additional two drivers and two loaders to meet the capacity needs of 10,000 extra collections.
Key Performance Indicators (KPIs)
The performance of Doncaster Refurnish subcontract is monitored by monthly key performance
indicators (KPI‟s), such as: tonnage collected and recycling/reuse percentage;
complaints/compliments; site inspections and maintenance reports; H&S records; site incident reports;
missed collections; and participation rates.
If the number of missed collections and complaints increases from previous years, Doncaster
Refurnish would need to justify this. If Doncaster Refurnish defaults, there are mechanisms to deal
with this in the contract. If performance issues cannot be resolved satisfactorily, then Doncaster
Refurnish would be in breach of the agreement and the contract terminated. The contract would
continue without reuse.
Conclusions
• A combination of the main contractor having the freedom to subcontract and social clauses in
the contract set the framework for the recycling and reuse of bulky waste within an integrated
collection contract. This meant that SITA, the main contractor, did not specifically need
agreement from the council to subcontract, because the tender invitation was clear that
subcontracting would be allowed.
• After many years of a low cost recycling and reuse service, Doncaster MBC (DMBC) realised that
to continue there would be an increased cost to the council. However, the social and
environmental return on investment, and the value for money obtained, were considered as
important as the immediate financial cost to the council.
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Bulky Waste Guidance: Case study 6 - Doncaster
• The bulky household waste collections contract has brought stability to Doncaster Refurnish and
provides an additional platform for sustainable growth. This has brought wealth into the local
economy.
• It is inadvisable to operate without a formal contract, but building relationships with third sector
organisations was vital to DMBC. The relationship during the period 2003-2009 was based upon
trust, service performance, determination, and political will by council members, and support by
officers and SITA staff.
Key learning points
1. Consider how the service is to be funded
In 2003, DMBC had not accounted for the support costs that were necessary for starting a bulky
waste reuse service. As the availability of funding diminished over the years, full cost recovery
pricing was required.
For more information see „What is the difference between a contract and a grant?‟ in
Commissioning and Procurement which can be accessed through the main Bulky Waste Guidance
webpage.
2. Specify Quality Management Certification
To establish assurances about the reliability and procedures of prospective TSO contractors specify
that the successful organisation has ISO 9001, or equivalent, accredited certification is an option.
3. Contract specification and Short Term Flexibility
DMBC specified 22,000 BHHW collections per annum, and it was more efficient to design the
service utilising 7.5 tonne vehicles rather than the 3.5 tonne vehicles used by Doncaster Refurnish.
This difference proved time consuming and costly:
• Someone within the TSO had to obtain a Certificate of Professional Competence (CPC) before
the full licence is awarded. Doncaster Refurnish applied for the licence in June 2009 with a view
to securing an operator‟s licence before the contract start date of 5th October 2009.
• Unexpectedly, it took 10 months and a formal hearing before an interim licence was granted
(March 2010). The application was held with the Traffic Commissioner for months because of
their failure to understand that a TSO could be both a charity and a social enterprise.
• This stretched the organisation‟s operating capacity because the contract was delivered using
3.5 tonne vehicles for the first six months of the contract.
Building in some short-term flexibility on service provision and delivery methods would have aide
the situation.
4. Centralised vs. Decentralised Procurement
For DMBC, using service-based procurement meant that there was an appropriate waste
management and community-facing champion within the Council, who believed in furniture reuse,
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Bulky Waste Guidance: Case study 6 - Doncaster
and recognised the social and environmental benefits that engagement with a TSO partner would
bring to the local community.
Quotes
“It is about being clear about the aims of the procurement process from the beginning. The
authority wanted a reuse service because of the social, environmental and economic value that
it brings. The wording of the Invitation to Tender reflected this...unless it is stated explicitly in
the tender documentation it will not happen. Also regulations are not a barrier to engaging
different stakeholders in the delivery of authority objectives, as we have clearly shown in
Doncaster, it‟s about seeing the bigger picture and making it happen”.
Jane Butler, DMBC Resource Recovery Manager
“All of the waste collected by Doncaster Refurnish would ordinarily go to landfill, but due to
this partnership, waste is being recovered to provide much needed assistance to those that
need it most. This is a truly effective alternative that is providing significant social,
environmental and economic benefits”.
Victor Ross, Contract Manager, SITA GB Ltd
Contact
Contact
Jane Butler
Resource Recovery Manager
Doncaster Metropolitan Borough Council
E-mail: jane.butler@doncaster.gov.uk
Tel: 01302 734444
Web: www.doncaster.gov.uk
Jo Ward
Former CEO
Doncaster Refurnish
E-mail: ward.joanne@ymail.com
Tel: 07760 194739
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Bulky Waste Guidance: Case study 6 - Doncaster
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