Collaborative Road Resealing Project Central Highlands Regional Procurement

Collaborative Road Resealing Project Central Highlands Regional Procurement Excellence Network (Vic) Kate Herford – Procurement Officer Golden Plains Shire

Regional Procurement Excellence Networks (RPEN) Key focus of RPEN’s • Meets Quarterly • Attended and supported by DPCD • Attended by invited industry representatives • Improved information sharing • Encourage collaboration in procurement • Raise sector understanding and profile of procurement

Background • State Government Initiative – Local Government Reform Fund - $70 k available for a Procurement in Practice Project to foster innovative procurement in the Local Government sector. – Preliminary analysis identified that a combined three year contract for bituminous road resealing works across the five participating councils would have a value in the vicinity of $15 – 20 Million

5 Councils agreed to participate Procurement in Practice Project (Tender CH 001)

Bituminous Road Resealing Central Highlands Region

Bituminous Road Resealing • significant spend for each Council ($4. 5 mil pa combined) • competition in the market (more than 1 supplier was currently providing resealing services in the region) • 5 adjoining Councils would offer advantages/benefits for contractors to better manage the logistics of plant & resources • 5 year contract (3 yrs + 2 x 1 yr options) provided security • Collective savings of approx. $630, 000 a year • A probity auditor was engaged to have independent oversight and ensure transparency of the process given the size of the procurement

Process • LGV provided resources, guidance, expertise and assisted in the preparation of documentation: – – – – Strategic Procurement Plan (signed by CEO’s) Project Procurement Plan Procurement Conduct Plan Probity Plan Conflict of Interest Declarations Deeds of Confidentiality Specification Evaluation Report • Probity Auditor was appointed to provide an independent oversight.

Project Team • Commitment required from all Councils and staff involved. • Membership on the project and evaluation team was extended to include not only the procurement staff of the participating councils but also the relevant engineer. • This led to a project and evaluation team of 10 people - two representatives from each council. • Regular meetings (fortnightly)

Project Team Members of the project team • Left to Right: Rod Leith (Ballarat City Council), Kate Edwards (Golden Plains Shire Council), Terry Matthews (Pyrenees Shire Council), Alex Bonner (Ararat Rural City Council), Brian Coustley (Hepburn Shire Council), Phillip Hoare (Pyrenees Shire Council), Gary Smith (Hepburn Shire Council). • Absent from photo: Alison Tonkin (Ararat Rural City Council), Andrew Miller (Ballarat City Council) and Bill Knight (Golden Plains Shire Council).

The Tender Process Lead Council • Ballarat appointed to manage and control advertising, enquiries, addenda’s and receive and circulate submissions. (Tenderlink was utilised) • Ballarat City Council were able to perform this role as the four other councils had agreed to this process in their procurement plans that were signed by their CEOs.

Tender Timeline ACTION Research and project development Distribute draft tender documents to councils DATE Dec 2011 – March 2012 9 -Mar-12 Councils to meet and work through the draft documents 16 -Mar-12 Councils to meet to finalise tender documents 21 -Mar-12 Final RFT documentation sent to councils 30 -Mar-12 Release of RFT (commencing) 31 -Mar-12 Market/Supplier briefing at Ballarat 11 -Apr-12 Closing date for RFT responses 4 -May-12 Evaluation of bids 5 April – 11 May 2012 Approval of decision and recommendation 28 -May-12 Council approval June 2012 Minister and Mayor Announcement Contract execution 28 -Jun-12 1 -Jul-12

Tender Process cont… Specification – based on Vic Roads standard sections for road works. – to ensure specification met the needs of all parties, common goals need to be established early in the process and the specification tested thoroughly (time pressures impacted here). – Schedule of Rates - provide clients with flexibility with reseal programs over the term of the contract. – Price Schedules – split between urban and rural, providing for a range of reseal areas.

Tender Process cont… Tender Briefing • Considered essential and was well attended. • Raised a number of questions that required written responses.

Submissions & Evaluation • 3 submissions received • Boral • Victorian Surfacing Alliance (Primal & Inroads) • Sprayline • Evaluation Based on • Level of Service/Capability (Quality) 20% • Capacity (Resources) 20% • Financial Benefit (Price) 60% • Price evaluation used actual 2011/2012 road sealing program data and costs from all Councils involved to accurately compare prices

Submissions & Evaluation • Clear articulation of volumes, standards and expectations is necessary to achieve the best outcome for all parties. • The use of a standard set of procurement terms and procurement categories by the group enhanced the collaboration opportunity for the group and in turn the outcome. • In order to evaluate a tender on price, there was the need for comparable data across the councils. • Time and expertise was required to convert data into comparable data sets – it was only after doing this that an evaluation on price could take place.

Submissions & Evaluation • Victorian Surfacing Alliance was selected by the panel • Collective savings of approx $630, 000 pa. • Each Council considered and adopted the recommendation of the Evaluation Panel (confidentiality was a big issue). • Individual contracts with VSA prepared and executed by each Council. • 3 year contract commencing on 1 July 2012 further two one year options. • Ballarat and Hepburn contracts will commence from 1 July 2013.

EXAMPLE - NEGOTIATED EVALUATION CRITERIA A: Conformance Statements of Conformance, Conflict of Interest and Compliance with the Victorian Government Code of Practice for the Planning for the Building and Construction Industry are required. The tenderer must also be incorporated pursuant to the Corporations Act 2001. These must confirm compliance or an absence of conflicts of interest. Failure to provide the above information or to confirm compliance or an absence of unresolved conflicts of interest will result in the tender being rejected B: Mandatory Requirements (Pass/Fail) 1. Occupational Health & Safety 2. Insurance and Industrial Relations 3. Financial Viability 4. Quality Systems

EXAMPLE EVALUATION CRITERIA (Continued. . . ) Criterion Description Measure Method of measure Weighting 20% Demonstrated skills, including the ability to manage labour and plant in delivering quality finishes to road surfaces and to identify and manage all risks. Proven record of timely completion of all works based on past contractual performances and using referee check Standard Management and Quality Systems 20% Capacity (Resources) Ability to supply works Sufficient resources to Resources committed to the within the timeframes ensure reliability of contract, including skills and required works. experience in delivering quality Ability to carry out finishes to road surfaces work within the Current intended contractual required timeframes commitments and extent of nonmunicipal operations, relative to available resources Level of Service/Capability (Quality) Ability to provide the works which meet the specified requirements Proven record of specification compliance in past contracts Quality of systems employed Financial Benefit (Price) Overall value for money of each proposal to council Tendered prices Comparison of the price with other submitted tender prices Local content* 60%

What we learnt from the Project • LGV’s support, resources, guidance and advice was critical to the success of the project. • Strong commitment and willingness of all in the Project Team made it happen. • Collaborative tendering takes time. • Council can overcome varying end dates of existing council contracts. • Focus should equally be on process and achieving the best outcome for all.

What we learnt from the Project • Adequate time needs to be given to getting the specification right. • Outcomes need to be measurable using an agreed baseline and robust methodology. • Management of individual contracts will need a consistent approach. • Across council Procurement Policies there a number of differing evaluation criteria and weightings.

What we learnt from the Project • To work collaboratively there is a need for continuous communications and a commitment to attend meetings. • Buy in from senior management is essential for success. • By developing consistent, generic templates less time is spent in the research and development phase of the procurement and there is clarity on the process of the procurement.

What we learnt from the Project • Depending on the size of the contract, a Council resolution may be required to endorse the recommendation to enter into a contract with the one supplier – this must be factored into the timeline. • Collaboration offers cost savings to tenderers as they save on time and costs by responding to one standard tender - rather than having five different tenders released to the market and requiring potential suppliers to submit five differing responses, attend five different briefings, etc.

2012 Procurement Australia Procurement Excellence Awards Winner - Collaboration and Innovation in Procurement Award https: //vimeo. com/46530717

Outcomes for Others • A collaborative regional procurement model has been developed for other councils across the state to use. • At least 2 councils have duplicated the process. • Collaborating councils are believed to be offered more competitive pricing. • Success of the project has opened the door future opportunities across the group – 3 Councils currently seeking funding for a Feasibility Study into the conversion of Council’s Heavy Fleet Vehicles to Biodiesel

Available Resources Check http: //www. dpcd. vic. gov. au/localgovernment/projects-andprograms/procurement-in-practice • Strategic Procurement Plan (PDF 69 KB) or (Word 52 KB) • Conflict of Interest (PDF 34 KB) or (Word 68 KB) • Deed of Confidentiality (PDF 42 KB) or (Word 52 KB) • Procurement Probity Plan (PDF 127 KB) or (Word 173 KB) • Procurement Conduct Plan (PDF 72 KB) or (Word 64 KB) • Tender Evaluation Plan (PDF 74 KB) or (Word 46 KB) • Tender Documentation (PDF 197 KB) or (Word 96 KB) • Tender Evaluation Report (PDF 102 KB) or (Word 65 KB)

Questions?