Agenda for Commissioning and Procurement Executive Committee on Tuesday, 14th February, 2023, 10.00 am

Agenda and minutes

Venue: Ground Floor Committee Room - Loxley House, Station Street, Nottingham, NG2 3NG. View directions

Contact: Mark Leavesley 

Items
No. Item

54.

Apologies for absence

Minutes:

Ceri Walters

55.

Declarations of interests

Minutes:

None.

56.

Minutes pdf icon PDF 307 KB

Last meeting held on 10 January 2023 (for confirmation)

Minutes:

The Committee agreed the minutes of the meeting held on 10 January 2023 as a correct record and they were signed by the Chair.

57.

Exit electricity and gas supply contract - key decision pdf icon PDF 320 KB

Report of Corporate Director for Communities, Environment, and Resident Services

Minutes:

Councillor Longford, Portfolio Holder for Energy, Environment and Waste Services, introduced the report.

 

Wayne Bexton, Director of Environment and Sustainability, Antony Greener, Head of District Heating and Waste Strategy, and Andy Whitley, Utilities Manager, presented the report and stated the following:

 

·  the current supplier of electricity and gas announced in August 2022 an intention to withdraw from the supply market to large scale commercial users, of which Nottingham City Council are categorized;

 

·  the current contract with the supplier will finish on 31 March 2024, and they would honour this contract. However, during discussions with the supplier, the opportunity for a one-year early cancellation of the contract on 31 March 2023 has been offered. This provides the Council the opportunity to undertake a soft market test by inviting pricing from ESPO, via their energy supply frameworks, for electricity and gas;

 

·  the current contract that Enviroenergy has for export of electricity to grid is due to finish on 31 March 2023, and a new contract is required to be in place by then so that the Council continues to receive income for the electricity that it generates and sells to an off-taker.

 

Resolved

 

(1)  to approve spend of up to £13million, and any income, related to the contracts for electricity supply and sales and gas supply;

 

(2)  to delegate authority to the Director of Environment and Sustainability as follows:

 

(a)  in consultation with the Head of Procurement:

 

(i)  to identify the best procurement option available to secure electricity and gas supplies for Nottingham City Council;

 

(ii)  to identify the best procurement option available in securing the sale of electricity generated by Nottingham City Council for export to grid;

 

(b)  to approve the outcome of any procurement process and award contracts:

 

(i)  based on the most economically advantageous offer available at the time of renewal, for the supply of electricity and gas to the Council;

 

(ii)  based on the most economically advantageous offer available at the time, for the sale of electricity generated by the Council for export to grid, including, but not limited to, any secondary value delivered by low carbon generation.

 

Reasons for recommendations

 

(i)  The opportunity to refresh the current electricity and gas supply contract is available due to the incumbent supplier, decision to withdraw from the large-scale commercial user’s energy supply market.

 

(ii)  The energy wholesale market has changed at pace during this current contract which commenced in April 2020, with unprecedented volatility in the wholesale commodity costs for electricity and gas. The current contract allows for fixed price, fixed term unit rates for 100% grid supplied electricity and gas, with no option to procure green gas.

 

(iii)  Entering into new utility supply contracts will also provide opportunity to reduce 3rd party liabilities currently held by the Council in respect of partner organisations which obtain their Utilities through our current contracts.

 

(iv)  After directly supplying their own requirements and the requirements of their private wire customers, Enviroenergy currently export any surplus electricity generated to the grid and  ...  view the full minutes text for item 57.

58.

NCC Enviroenergy Servicing and Maintenance Contracts - key decision pdf icon PDF 278 KB

Report of Corporate Director for Communities, Environment and Resident Services

Minutes:

Councillor Longford, Portfolio Holder for Energy, Environment and Waste Services, introduced the report.

 

Wayne Bexton, Director of Environment and Sustainability, and Antony Greener, Head of District Heating and Waste Strategy, presented the report and stated the following:

 

·  Nottingham City Council owns and operates the largest district heating network in the UK.  As the plant ages (it is now 50 years old), continued maintenance has minimised the risk of service downtime;

 

·  the plant must provide heating, hot water and power to its customers on a 24/7 basis for as many days of the year as possible;

 

·  the complexity of works required is considerable and is reflected in the level of external specialist support required. However, the arrangements in place help contribute to securing business continuity, continuous improvement and best value;

 

·  a decision by the Executive Board to hive up Enviroenergy Limited into the Council recognised the additional investment required to ensure the continued success of the District Heating Network;

 

·  As part of the Asset Transfer Agreement between the company and the Council, company contracts, including service and maintenance contracts, were novated to the Council and the terms and conditions of these contracts continue to be relevant;

 

·  To ensure goods, services and works continue to provide best value, approval is sought to enter into new arrangements for the contracts and services required (detailed in the report and the exempt appendix) and summarised below:

 

(i)  Provision of Welding, Repair and Maintenance Services;

(ii)  Water Treatment;

(iii)  Turbine Maintenance;

(iv)  Network Maintenance and Repair;

(v)  Control System;

(vi)  Carbon Credits;

 

·  the recommendations in the report, if approved, will maximise the ability of the service to continue to provide heating and power supply services within the Council’s Contract Procedure Rules, whilst also maintaining Council’s contractual obligations to the Eastcroft Incinerator, therefore minimising the risk of service disruption.

 

Resolved

 

(1)  to approve:

 

(a)  the tender and award of new contracts for heat station and district heating maintenance, as detailed in table 1 of the report;

 

(b)  extensions to the contracts for heat station and district heating maintenance, as listed in the exempt appendix;

 

(c)  the procurement of Carbon Credits through the use of a broker, to ensure that the Council complies with its statutory obligations in respect of the UK Emissions Trading Scheme;

 

(d)  spend against the contracts, listed in table 1 of the report and in the contracts and transactions listed in the exempt appendix, for the duration of all contracts and transactions, including any extension(s).

 

(2)  to delegate authority to the Director of Environment and Sustainability to award contract extensions, tender and award new contracts for services and purchase goods and/or works, as detailed in the recommendations above.

 

Reasons for recommendations

 

Recommendation (1)(a): Award of new contracts

 

Table 1 below sets out the requirement to tender for and award new contracts for the provision of the following services to support district heating, with a rationale for each contract required detailed below the table:

 

Contract

Term

Estimated value

Estimated value including extension

Provision of  ...  view the full minutes text for item 58.

59.

Building Services and Facilities Management procurement requirements 2023-24 - key decision pdf icon PDF 314 KB

Report of Director for Economic Development and Property

Additional documents:

Minutes:

Councillor Williams, Portfolio Holder for Finance, introduced the report.

 

Trevor Bone, Head of Building Services and Facilities Management, presented the report and stated the following:

 

(i)  the report sets out Building Services (BS) and Facilities Management (FM) procurement requirements for planned, reactive maintenance and minor works for the financial year 2023/24;

 

(ii)  the Council must comply with a number of statutory obligations set out in a wide range of primary and secondary legislation in relation to its asset portfolio;

 

(iii)  the obligations are met by carrying out planned, reactive and minor works on the asset portfolio;

 

(iv)  whilst works are performed in-house wherever possible, there are occasions where specialist contractors or additional resource is required, and the report sets out how those requirements are to be procured to provide a seamless ability to meet the Council’s obligations under the applicable legislation;

 

(v)  BS and FM needs to award several framework agreements and contracts, up to a value of £5.497m (as set in appendix 1) in conjunction with the council’s procurement team;

 

(vi)  terms and conditions are already in place for awards under framework arrangements, and for other contracts, Legal Services will support where it can or facilitate the use of external solicitors if circumstances require and funding is identified.

 

Resolved

 

(1)  to approve the procurement of contracts as detailed in appendix 1, in line with the annual procurement plan, to a maximum value of £5.497m;

 

(2)  to delegate authority to Director of Economic Development and Property to award the contracts procured under recommendation 1, and to approve all call-off arrangements under those contracts over a period of four years (2023/27);

 

(3)  to approve the proposed expenditure of at least £1m of the £3.1m planned maintenance budget for 2023/24 on services delivered through in-house provision (as referenced in paragraphs 2.4 and 2.5 of the report).

 

Reasons for recommendations

 

(i)  The contracts set out in the appendix require re-procurement to comply with the public contract regs 2015 to enable BS and FM to keep the Council’s asset portfolio compliant with regulatory obligations, the applicable legislation and insurance obligations.

 

(ii)  Through the proposed procurement routes, the Council can continue to improve efficiency and service of supplier delivery across multiple high-risk work streams, and improve value for money for Directorates across the Council.

 

(iii)  The Council’s annual procurement programme has proven to be the best approach to securing a competent speciality supply chain with the lowest costs possible.

 

(iv)  The report details how orders are placed with Contractors through the Council’s robust systems. To ensure a smooth and timely process for placing orders it is recommended that the Director of Economic Development and Property has delegated authority to approve any contracts and call-offs made under frameworks for their duration. No award will be made without evidence that the budget has been approved for the ordered requirement or a contract is in place that either complies with the requirements of the Framework or has been reviewed by Legal Services.

 

(v)  It has been identified that  ...  view the full minutes text for item 59.

60.

Exclusion of the public

To consider excluding the public from the meeting during consideration of the remaining items in accordance with Section 100A(4) of the Local Government Act 1972 on the basis that, having regard to all the circumstances, the public interest in maintaining the exemption outweighs the public interest in disclosing the information

Minutes:

The Committee agreed to exclude the public from the meeting during consideration of the remaining items in accordance with Section 100A(4) of the Local Government Act 1972, Schedule 12A, Part 1, Paragraph 3, on the basis that having regard to all the circumstances, the public interest in maintaining the exemption outweighed the public interest in disclosing the information.

61.

Exempt appendix - Exit electricity and gas supply contract

Minutes:

Resolved to note the exempt appendix to minute 57 above.

62.

Exempt appendix - NCC Enviroenergy Servicing and Maintenance Contracts

Minutes:

Resolved to note the exempt appendix to minute 58 above.