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Wednesday, May 22, 2024

Middlesbrough council faces legal challenge over bin contract amidst transparency concerns

Middlesbrough Council said it had been legally compliant, but conceded a 'breach' as it did not publish the contract award notice in a timely fashion

Middlesbrough Council has been threatened with legal action over the award of a contract to distribute and deliver new brown wheelie bins.

The bins are replacing existing green ones as part of changes that mean the town’s residents will now have to pay to have garden waste collected.

A so-called direct award of a contract worth £1.127m was made in January to German firm SSI Schaefer Limited, which also included the supply of new black rubbish bins.

The council has stated the award was made under a framework that was legally compliant, while conceding an error was made as it was late to publish the contract notice as required within a specified timescale.

It has been challenged on this by the firm IPL Global, which has a UK based division making and shipping up to two million wheelie bins a year, and said regulations had been breached.

According to the Gov.uk Contracts Finder service the contract was awarded and began on January 9, but a notice was not published until 22 March, well outside the usual 30 day permitted timeframe with notices usually being published the same day.

In e-mail exchanges between the company and the council seen by the Local Democracy Reporting Service (LDRS), a representative of the former stated legal proceedings could follow in the High Court.

Kial Horton, a business manager with Rotherham-based IPL Plastics, also said the council did not advertise on the Find a Tender service, again operated by Gov.uk, which allows people to search and apply for high value public sector contracts.

As a direct award was made with no competitive tendering exercise being undertaken, he said the company did not have the opportunity to bid and told the LDRS it could have engineered a saving of at least £250,000 and potentially up to half-a-million pounds for the cash-strapped local authority on the bins contract.

Independent Middlesbrough councillor Joan McTigue said: “On the face of it it appears that Middlesbrough Borough Council are in the wrong.”

Middlesbrough Council interim chief executive Clive Heaphy. Image: Middlesbrough Council

An e-mail sent last week to councillors by interim chief executive Clive Heaphy said the position it was being challenged on was “strenuously refuted”.

Mr Heaphy wrote: “I take challenges like this seriously as we aim at all times to follow due process.”

He said the current provider was selected after making extensive enquiries of a range of providers on the framework offered by the Eastern Shires Purchasing Organisation (ESPO), a public sector owned body which provides goods and services.

These had to be able to meet all of the council’s specific requirements, in particular concerning the quality of the bins and the QR coding to be attached to them.

Mr Heaphy added: “We are aware we did not publish the contract award notice within the required time frame, although notification of the contract was included within other publicly accessible formats.

“This is a breach, but it only serves to notify all bidders of the decision and does not change the outcome of that decision.

“It is not considered by our legal team to be a material breach that would lead to a successful challenge.

“Any suppliers wishing to challenge a procurement process are welcome to do so, through the correct routes available to them during the procurement process.

“This challenge came in after the process had concluded.”

The council would be undertaking a review to ensure that future contract award notices were published within the required time period.

‘Dangers to reputation’

Mr Horton, in his correspondence, wrote: “With new transparency regulations set to be brought in later this year and a lack of transparency or tender process being carried out for this work we certainly see the dangers to reputation amounting from this procurement process.

“IPL wants to work in partnership with Middlesbrough [Council] and ensure any reputational damage or court proceedings are avoided.

“I believe it is in the best interest of all parties to explore ways a fair and reasonable process can be carried out which includes access to all manufacturers and not just one.

“Again, this is in line with Middlesbrough’s best practice.”

Mr Horton said IPL were recognised as the cheapest supplier on all UK frameworks for wheeled bins and were UK based.

He said: “This just isn’t fair and not in line with achieving best value.

“I can clearly evidence that they have not followed procurement protocols correctly.

“This was directly awarded behind closed doors on the ninth of January and neither me, nor anybody else in the marketplace were aware of this until the end of March.

“There are three UK-based manufacturers that would have all been chomping at the bit to bid on this work, we are not the only one.”

He said direct awards were a “grey area” with guidance available on when these should be used.

Mr Horton said: “They [the council] can legally move to a direct award, but they then have to justify it on best value.

“The four core pillars of best value are price, lead time, quality and social value.

“IPL Plastics would have been able to provide the same contract, the same quality, the same delivery service, in the same time frames with higher warranties on the product, using a UK workforce and minimising CO2 emissions, while saving the council a minimum of a quarter-of-a-million pounds.”

A spokesman for the council said the contract was fully compliant and awarded in line with the relevant procurement legislation and in liaison with the ESPO.

He said: “A direct award was made to a supplier who was able to meet all our requirements around the supply and delivery of wheeled bins as part of the ongoing bin replacement and transformation of waste collection services in Middlesbrough.

“Due to an oversight, the contract award notice was not published within the required time period, but this did not affect the decision and the information is now available on the council’s publicly accessible contracts register.”

The council has said in a communication with residents signing up to the new garden waste collection subscription scheme that the move to new brown bins means all three bins used in Middlesbrough, including for household waste and recycling, can be collected by the same type of refuse truck “increasing the resilience of the service”.

Last month it hiked up council tax by the maximum 4.99% amount available with a majority of councillors also agreeing to accept exceptional financial support offered by the Government allowing it to borrow £13.4m and set a balanced budget.

The council also remains subject to a ‘best value’ notice from the Department for Levelling Up, Housing and Communities.

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