What a waste? New Haringey contract

[Adrian Essex]

I have written to the Haringey Cabinet member responsible for waste (yes they have one dedicated to the task). This is my email.

 

 

Dear Councillor Canver

I refer to your somewhat confusing news article http://www.haringey.gov.uk/index/news_and_events/latest_news/new_wa....

It is headed "New waste contract set to be signed" yet also states that "Haringey Council and Veolia are now finalising the terms of the new contract" implying that the contract is far from set. Which is true?

It states that we now know know the outcome of the bidding, and yet Veolia is said to be the "preferred bidder" as though the bidding is not yet over. Which is true?

It states that "The contract will start in mid-April . . " Does this leave sufficient time to complete the necessary contract details, conduct due diligence and be assured that the council has a good deal with a reputable contractor?

I believe the Cabinet meeting at which the final short list was considered took place on 21st December. The agenda item for this consideration reads

"20. INTEGRATED WASTE MANAGEMENT CONTRACT    

 (Report of the Director of Urban Environment – To be introduced by the Cabinet 

Member for Neighbourhoods): To seek approval to the award of contract for the 

integrated waste management contract. TO FOLLOW"

i.e. the decision was taken without the cabinet having had prior sight of the details.

The minutes for this item read

"CAB102. INTEGRATED WASTE MANAGEMENT CONTRACT (Report of the 

Director of Urban Environment - Agenda Item 20) 

Our Chair agreed to admit the report as urgent business. The report was

late because of the need to complete necessary consultations. The 

report was too urgent to await the next meeting because of the need to 

meet specific deadlines relating to the procurement process. 

The Appendix to the interleaved report was the subject of a motion to 

exclude the press and public from the meeting as it contained exempt 

information relating to the business or financial affairs of any particular 

person. 

We noted that the report sought approval to award the contract for 

Waste Management Services for a period of 14 years with the option to 

extend for a further 7 years in accordance with Contract Standing Order 

(CSO) 11.03.  

RESOLVED: 

That in accordance with Contract Standing Order 11.03 approval 

be granted to the award of the Waste Services contract to Veolia 

ES (UK) Ltd. for a period of 14 years with the provision to extend 

for a further period of 7 years"

It seems to me surprising that a responsible body can take such a decision in this "too urgent" fashion for a very large contract possibly running over two decades. If further consultation is necessary then surely it should take place calmly and in time for the Cabinet to give due consideration to the outcome. It seems that the cabinet is compounding a back office error (failing to notice in time that a very long contract is coming to an end) by rushing to a decision based on apparently little or no information. I am sure interim arrangements to cover any gap between the end of the Enterprise contract and the start of the new one would be expensive, but surely not as expensive as getting such a big decision wrong.

The minutes appear to contradict your "preferred bidder" assertion in stating that the contract will be awarded, notwithstanding your professed ignorance, indeed the non-existence, of its details.  

I note you have set out the possibility for an extension of the contract. What measure will be in place to terminate early in the event of Veolia's failing to meet the agreed standards of service and what penalty will then apply to Veolia?

Is it right that this entire negotiation should take place in camera under the umbrella of "commercial confidentiality". I understand openness and accountability to be current watchwords in both national and local government.

Have you considered the ethical implications of Veolia's complicity in illegal Israeli occupation of Palestinian territory?  http://australiansforpalestine.com/28695

Regards

Adrian Essex

[Adrian Essex]

I have been thinking some more about this:

• Refuse collection is an emotive subject - especially if it is done infrequently. The snow and Christmas caused a few missed collections but extensive coverage and many pictures in the papers. Two badly parked cars on an estate in South London meant missed collections for a few weeks and got about five minutes on the BBC news. Pickles is forever going on about weekly and fortnightly. There is comment in this thread about how mid morning is abad collection time, for myself I don't like being woken at 6:30!
• Over 6,800 responses were received to the recent consultation  more than for any other.
• Recycling has become almost a religion - I separate out everything that might be recyclable for the boxes - I'd really like to believe that the contents of the boxes actually do get used again and go neither to landfill nor to some limbo wasteland awaiting for the market to pick up. (Given that cycle is a sequence of events that has no beginning and no end but simply repeats itself why do we need the emphatic 're' prefix?)
• Street cleaning too arouses emotions. It cost the country millions each year, yet by the simple expedient of putting litter in bins we could remove the need for most of this expense.
• Plus this has all the hallmarks of a classic cock up. Read the agenda item or the minutes or my email to   Cllr Canver  to see what an apparent mess they are making of this.
• Before the contract details are complete Haringey has given up its main negotiating lever (awarding the contract elsewhere ) by agreeing to employ Veolia, a hard nosed highly profitable company about 30 times bigger than Haringey by turnover with, no doubt , a negotiating team to match. Veolia will run rings round Haringey.
• Niall Bolger seems to know how to conduct himself at a public sector interview (apparently he has a new better job elsewhere), where real world considerations vanish and predetermined, politically correct, box ticking takes over, but has not managed his team of officers  to get the relevant papers out in time for the cabinet meeting where the contract was awarded, despite being well aware of the impending deadline. 
• To make matters worse the cabinet seems happy to proceed on this ill informed basis.
• All of this taking place against a background where not one detail is yet available for public scrutiny, and indeed may never be on the basis of commercial confidentiality, or possibly under human rights law - apparently Veolia is a human and therefore has an entitlement to peaceful enjoyment of possessions

[Adrian Essex]

I sent this email on 6th February. As of today, St. Valentine's day, I have not yet received a response,

[Adrian Essex]

As at 20th Feb I have still not had a response so I have sent a further email:

Dear Cllr Canver, Officer Bolger

I refer to my email of 6th February to which I have as yet received neither acknowledgement nor reply, except for an out of office notice from Officer Bolger.

I think an answer should be provided. At a time when little money is available for any purpose I think it is important that all public sector procurement be seen to be efficient and effective. I think the fact that this procurement is proceeding on the basis that the Cabinet did not see the relevant papers prior to the meeting at which the contract was awarded, and that the matter was allowed to become "too urgent" to consider properly, suggests it may be both inefficient and ineffective, I look forward to your response.

[Adrian Essex]

I received a reply to my enquiry on 1st March. It reads:

 

Dear Mr Essex

 

Thank you for your enquiry of 6 February 2011 and please accept my apologies for the delay in responding..

 

Haringey Council published its Contract Notice in the Official Journal (OJEU) on 29 April 2009, inviting suitably qualified companies to engage in the procurement process for the provision of the Council's Waste Management Services.  Since this notice was published the Council have been engaged with suppliers and have gradually reduced the number of bidders, until the final two, Enterprise and Veolia were invited to submit their final bids to the Council in October 2010.  During this period, prior to inviting final bids, all aspects of the service and contractual terms were agreed, including the Council's option of early termination in the event of unsatisfactory performance.  Members have been regularly updated on progress, including formally at Cabinet Procurement Committee.  See;

 

 http://www.minutes.haringey.gov.uk/ieListDocuments.aspx?CId=153&...,

 http://www.minutes.haringey.gov.uk/ieListDocuments.aspx?CId=153&...,

 http://www.minutes.haringey.gov.uk/ieListDocuments.aspx?CId=153&...

 

Sufficient time has therefore been made available to ensure thorough due diligence and a timely start to the service in April 2011.

 

Cabinet approved the report on the recommendation of the preferred bidder on 21 December 2010, at which point all operational considerations and contractual terms had been agreed, so the bidding had been concluded with both of the final two bidders.  Although the report was not available at the point that the agenda was published, Cabinet Members were provided with copies of the report on 17 December 2010, allowing due consideration prior to the meeting.

 

Finally, the Council is aware that the activities of another Veolia Group company in the Middle East has attracted some criticism, to which you refer.  Section 17(1) of the Local Government Act 1988 requires that when considering whether to exclude persons from being invited to tender for contracts, local authorities should exercise their functions without reference to matters which are non commercial matters.  Under section 17(5) (c), non commercial matters include "the location in any country or territory of the business activities or interests of, contractors".  I have also attached a statement from the Chief Executive of Veolia, providing further clarity.

 

I hope that this response satisfies the concerns that you have expressed.

 

 

Cllr Nilgun Canver

Cabinet Member for Neighbourhoods

St Ann’s Ward Councillor (Labour)

River Park House

225 High Road

Wood Green

London

N22 8HQ

Tel: [phone]

Fax: [phone]

[e-mail]

[Adrian Essex]

I have responded to this further information:

Dear Councillor Canver

Thank you for your response. I am pleased to see that the procurement process not only began in plenty of time but that further time was made available to complete it by extending the Enterprise contract. I note also that the process conforms to the standards laid down locally, nationally and across Europe.

I have not been able to find the proceedings of the Cross Party Member Steering Group referred to at 7.1.5 in the minutes of the procurement committee on September 15th 2009. Please can you direct me to these.

I note that at 7.3 of these September 2009 minutes the intention is to "appoint a supplier by Autumn 2010" (Note "by", not during or after). This is a somewhat vague deadline. I think of summer as being June, July and August, Autumn for me therefore starts on September 1st. By a slightly more lax definition Autumn must certainly contain the autumnal equinox, which according to the National Maritime Museum website last year fell on 23rd September. Let us adopt this date as our not-vague deadline. In section 10 of these 2009 minutes the Head of Procurement is noted as having commented "This procurement is progressing as expected and within expected timescales".

On September 16 2010 the minutes record again that  the Head of Procurement says "This procurement is progressing as expected and within expected timescales". This certainly is not true - by any definition no contractor will be appointed "by Autumn". Surely the Cabinet and the public should be warned of this missed deadline. 

On December 21st 2010 the Cabinet papers record various comments by the Head of Procurement, none of them relating to the three month  (so far) slippage in appointing a contractor. Three months, that is, out of an allotted seven months, almost 50% of the time originally considered necessary, for a handover, with the contract still not signed.

The reason given in the minutes for the delay (the delay in preparing the papers the papers, not the overall project delay) is so that  (I quote) "The report was late because of the need to complete necessary consultations", i.e. not only has the final deadline been missed, it appears that intermediate deadlines have also slipped, with some user requirements not yet defined.

I quote again from the 21st December (the winter solstice rather than the autumnal equinox) "The report was too urgent to await the next meeting because of the need to meet specific deadlines relating to the procurement process" That is, the cabinet is no longer running this process. Either the process is running the cabinet, or Veolia is insisting on having its contract signed. Neither explanation gives me any confidence of a satisfactory outcome for a major contract, potentially spanning four changes of central government, being awarded at a time of almost unprecedented financial turmoil, with the Cabinet in the midst of setting a highly contentious budget.

I regret to inform you that this further information you have supplied intensifies the concerns I have expressed, not only for this contract, but for the procurement process in general.

I note also that your latest news bulletin  contains various tit bits of apparently good news, none of which is available to me through the papers to which you have supplied links.

I have emailed environmental services asking for a detailed copy of the waste consultation responses but so far they have neither acknowledged my request, nor replied. I was hoping the full results might show whether or not you had consulted on the fortnightly collections you now propose to introduce.

Adrian Essex

Dismayed of Crouch End

[Anony Pony]

Adrian, thanks for doing this on our behalf...

In my experience whenever the term 'preferred bidder' is used - a great more digging is called for!

See, Firoka was the preferred bidder to get Ally Pally. If I am not mistaken this public asset was to be exchanged for a mere £1.5 million - the price of a large family home in Crouch End... Good job some of us woke up before it was too late...

Haringey seem to have 2 types of bidders when it comes to flogging public assets  'The highest bidder' and 'The preferred bidder' the later usually means the bidder is set to get it on the cheep in return to few empty promises never to be fulfilled.

I wonder what it means in this case?

Did you check who is on the board of directors?

 

[GN8]

 

Check this out - there might be a bigger picture here

I just got wind of this today from a local and concerned resident

http://www.nlwa.gov.uk/procurement/pinkham_way/pinkham_way_public_e...

[Adrian Essex]

This week I met an officer of Haringey Council, to talk about the process leading to the signing of this new contract. This gentleman very kindly gave up an hour and a half of his time to talk to me, when there is less than a fortnight to go before the new contract starts, and he must be quite remarkably busy. Councillor Lyn Weber the LibDem spokesperson on Environment also gave up her time to attend.

Lesson number 1 - If you are exercised about something the council has done or is doing, a letter/email to the relevant Councillor may very well get you such a meeting. I like to think that my emails were well reasoned and well founded, which I guess would also help.

My original complaint is set out (at some length) here (OpinioN8). Essentially, that Haringey had fouled up the project, a conclusion I reached by reading the minutes of meetings I was directed to by officers. Based on my re-reading of those minutes I believe my conclusion was understandable. A reference in the minutes to a hold up due to "necessary consultations"  simply means that legal and finance were a bit slow signing it off, not the much more damaging interpretation I placed upon it, and a news release in January 2011 states that a contract has yet to be finalised.

The difficulty of reading the minutes is threefold:

1. Minutes are a very abbreviated form of recording and inevitably leave out some nuance
2. These particular proceedings are subject to various forms of confidentiality - in this particular instance there is a lot that cannot be said in public because of commercial confidentiality - competing bidders might gain an advantage by knowledge of their rivals' approach. 
3. There is an element of secrecy about some council proceedings - for example, in respect of this project there was a cross party steering group formally constituted to have some form of oversight of the project. Since the proceedings of this committee have never been publicly minuted it is hard to be sure what the group added to the process.

Neither of these last two points does anything for the currently fashionable goals of openness and transparency. 

Yesterday's meeting revealed some additional information that was not clear from the LBH website. The original deadline for completing the project (through to signature) was "by autumn [2010]". A news release on theLBH website in January 2011 implied that negotiations over the contract were still not complete - hence my concern. I have now been told that every detail of both the winning and the losing bid and contract had been determined by October 2010, well in time for an orderly handover in April 2011. Re-reading the minutes of December 21st (point 7.13 and 7.14) I can see that it was the case that the competitive dialogue with the competing bidders was complete by 10th November,  by which date all the details had been finalised.

Lesson number 2 - have a large pinch of salt handy when reading Councillors' press releases.

 

I also learned something of the "competitive dialogue" process by which the terms of the contract are agreed. The process still begins with Haringey's  writing a specification, but from then on there are dialogues between Haringey  on the one part and each of the bidders on the other, in the course of which there is some give and take, and an achievable result emerges. These dialogues are carefully compartmentalised, so that none of the bidders ever learns what any of the others are agreeing to. I am assured that this puts the power firmly in Haringey's hands.

The result of all this negotiation is said to be a "good" contract, in several senses.

It is good in that :

• the bidders are expending a lot of resource in making the bid and want to see that effort rewarded, and so make the terms attractive to Haringey.
• it specifies the results Haringey want to achieve, i.e. lots of recycling, clean streets, empty bins, and so on, rather than the actions Veolia must carry out - so if a street is clean enough then Veolia can leave it unswept, if it is not clean enough then they must keep sweeping it until it is. Indeed, they don't have to sweep it, they can use magic, or any other cleansing mechanism, if they have it available.
• the targets to be achieved become more demanding over time, so that Veolia operates to ever higher standards. (Though I note that one of the standards adopted is that Haringey must be in the "upper quartile of London Boroughs" on some of these standards - I find this odd - if what is being done is good enough here, and its good enough in Islington, why do we have to be better than them?)
• Haringey has several ways out of the contract at different times - the exact nature of these exits is "commercially confidential", so we can't know the details, but some are conditional on Veolia's performance and some are unconditional.
• Veolia's performance is monitored throughout and there are adjustments made if it is not up to snuff.
• it is for 14  years (all being well) long enough for both Haringey and Veolia to commit to making it work.
• there will be a "Partnership Board " to oversee the contract's execution. It is not yet clear who will be on this board, nor whether it will make its reports public. My suggestion would be that it would consist of Veolia staff, Officers of the Council, Councillors (of all persuasions) and interested citizens, possibly drawn from Area Assemblies and that it will produce quarterly reports, showing how performance goals are being achieved, how costs are contained and how standards are improving all within the terms of the original contract.

It is that last that point to which we turn for proof of all that I have written here. During my meeting I was given convincing verbal assurances that all was not only much better than I had feared, but, actually, good.

Lesson number three -    a variation on something I think Sam Goldwyn said "Verbal assurances are not worth the paper they are printed on", but I look forward much more optimistically than I did before my meeting, to reading the reports of the Partnership Board on just how well things are going. I understand too that further relevant factual statements will be published on the Haringey website.