Agenda item

Report of the Cabinet Member for Environment, Climate Change and Operations is attached.

The Cabinet Member for Environment, Climate Change and Operations presented a report to seek formal approval to use the Yorkshire Purchasing Organisation (YPO 1173 Liquid Fuels framework for the period 16 October 2023 to 15 October 2025 with two options to extend for an additional 12 months. The maximum Framework period will therefore be 4 years, from 16 October 2023 to 15 October 2027 (subject to annual review, incorporating price negotiations and KPI performance).

The various liquid fuels listed are available for use by all Council owned vehicles which equates to 22 separate service users including waste and recycling, highways, grounds maintenance, security and response services, adult and children’s transport and Six Town Housing. Bury Council is an associate member of YPO, a Public Buying Organisation established in 1974 to maximise the value from consolidating demand and procuring collaborative supply contracts on behalf of its members and associates.

Recommendation(s)

Cabinet:

1.   Approves the decision to use the new YPO Framework 1173 for 2 years with the option to extend for a further two twelve-month periods subject to satisfactory performance.

2.   Approves the use of YPO’s sole appointed framework supplier, Standard Fuels, for the supply of various fuels (diesel, gas oil and AdBlue) through the framework duration.

3.   Approves the use of the YPO utility Framework Agreement to administer the purchase and supply and delivery of various liquid fuels for the period 16 October 2023 to 15 October 2027.

4.   Provide delegated authority to the Executive Director of Operations and Executive Director of Finance, in consultation with the portfolio lead for Environment, Climate Change and Operations to award the contract and facilitate the execution, implementation, and operation of the contract.

Reasons for recommendation(s)

The proposed arrangements will ensure that the Council has a compliant various liquid fuels contract in place.

Alternative options considered and rejected

Option 2 - Procure our own various liquid fuels by direct tender

This option is possible, but it would involve a standalone Public Contract Regulations (PCR) compliant tender to secure contracts directly with the selected utility provider(s) (or via a broker). This approach is unlikely to produce the best results due to the relatively small scale of the portfolio compared to that of most large purchasing organisations. In contrast, a Public Sector Buying Organisation such as YPO, can obtain more favourable wholesale prices through aggregating the demand of a large number of public sector organisations. In addition, a direct tender would require the Council to engage additional resources (skilled utility traders and additional staff for contract management) and provide greater risk of exposure to utility price fluctuations . It was therefore determined as unviable.

Option 3 - Procure through a Private Sector based provider.

The Council would be required to invite tenders for a private sector Third Party Intermediary (TPI) to procure various fuel supply, but it would need to be sure that it would be getting best value through a truly aggregated contract. Full price transparency of all costs, including TPI fees and any commission paid by suppliers to the TPI would be needed. By aggregating the Council’s volumes, the TPI could access various fuels market on our behalf, but we may only receive prices based on the supplier’s view of the market. A full Public Contract Regulations compliant tender process would be required to engage with such a provider with all the associated resource and time implications this would entail. TPIs may have issues regarding business continuity in the present economic climate and are unlikely to be able to aggregate the council’s volume with other customers in a PCR compliant manner or to the same level or offer the same additional and social value as the YPO contract. Due to this level of complexity and lack of in-house resources to deliver this, this option was dismissed.