Purpose

Recommendation on decision to
award the dockless cycle hire contract.
 

Content

RESOLVED:
 
1. 
To approve the appointment of Supplier A and Supplier B
(see Exempt Appendix A for details), as the Service Providers of
the Dockless Cycle Hire Service using
cycle hire bays provided by the Council. The appointment to operate
in Hackney shall be on the basis of a fee paying concession
agreement for an initial period of three years with up to two
further optional annual extensions.
 
Reasons For Decision
 
Following the decision at the Hackney
Procurement Board to carry out the procurement of a dockless cycle hire service, the procurement of the
Service has been carried out whereby suppliers were invited to
tender for the Service. A decision is now required to award the
contract.
 
The contract award decision is treated as a
key decision to be considered at the Cabinet Procurement and
Insourcing Committee as the decision is for a borough-wide cycle
hire service and therefore affects all wards in Hackney and the
contract value is estimated to be £93 million across the
five year term (inclusive of VAT) and
therefore over the threshold of £1million.
 
Table 1 sets out the high-level, final tender
evaluation result
 

 

Quality

Price

Social Value

Total

Supplier A

30.00%

42.60%

12.40%

85.00%

Supplier B

22.73%

46.00%

9.80%

78.53%

Supplier C

18.18%

42.80%

10.40%

71.38%

Supplier D

12.73%

43.80%

10.40%

66.93%

Supplier E

28.18%

28.60%

46.00%

66.58%

 
Appendix A (Exempt): Shows the tender
responses at the SQ stage and the members of the evaluation
team
 
Appendix B (Exempt): Shows the quality and
price breakdown scores at the ITT Stage and the members of the
evaluation team.
 
The Invitation to Tender and associated
appendices including the minimum requirements of the Service,
specification, quality questions, financial submission and award
criteria. Together these documents were designed to specifically
test and unlock the market’s ability to supply a service that
aligns with the principles and outcomes defined for Hackney. See
section 9 for how this contract award will address issues and
unlock opportunities related to sustainability, net zero and social
value specifically.
 
The business case proposed to run a tender
that awards the contract to up to two suppliers. Five tenders were
received and evaluated. The quality question responses and
financial submissions from all five tenders demonstrated a high
level of ability to deliver a service that aligns with the
principles as set out in the business case. The tender process has
therefore successfully resulted in a highly competitive evaluation
that has resulted in officers being able to put forward the
recommendation to award the contract to two suppliers.
 
Alternative Options
Considered and Rejected
 
Award contract to
one supplier/winning bidder
 
The business case proposed to carry out a
tender that awards the contract to up to two suppliers. The
invitation to tender stated that “Should there be only one
compliant bid, the bidders may be offered 100% of the contract
capacity.” The two winning bids were compliant and therefore
the option of contract award to one bidder is not considered.
 
Award contract to no
supplier and re-tender the Service
 
The Council is not obligated to award a
contract following the tendering of the Service. In the event that
the tender didn’t result in the ability to award a contract
for a service provider to deliver a service that met the defined
principles for the Service then the option of no contract award
could be considered. Similarly if a
significant risk was identified with contract award or a
significant opportunity was identified from re-tendering the
Service then this option could be considered.
 
While lessons learnt have been identified from
this tendering exercise, officers are satisfied that the contract
award will result in a service that meets the aspirations for the
Service.
 
The tender process did reveal a risk that was
not fully considered in the drafting of the business case. This was
the risk that the tender evaluation results in neither winning
supplier being able to facilitate cross-borough trips. While a
significant risk, this outcome did not materialise due to the
tender evaluation process self-selecting service providers which
together will enable cross-borough trips to take place from day one
of the contract. The identification of this risk will inform future
procurement exercises of the Service, for instance through the
consideration at the point of drafting the business case stage of
the options to mitigate this risk for instance through
joint-borough procurements or the use of lots.
 
A potential opportunity which officers have
been actively monitoring during the tendering process is whether
there is a significant opportunity to be gained from a
joint-borough procurement or from waiting for a London-wide
Contract or licensing framework. These two options were considered
and discounted at the business case stage and these reasons have
not changed since.