Decision Maker:

Outcome: Recommendations Approved

Is Key Decision?: No

Is Callable In?: Yes

Date of Decision: January 13, 2025

Purpose:

Content: Salford City Council – Record of Decision   I Councillor Youd, Lead Member for Finance and Support Services and chairman of the Procurement Board, in exercise of the powers contained within the Council Constitution do hereby approve:   ·      to Award the Contract forPostal Services, as detailed in the table below:   Detail required Answers Title/Description of Contracted Service/Supply/Project Postal Services –  Aggregated  services group Name of Successful Contractor Whistl UK LTD Supplier Registration Number (to be supplied by Corporate Procurement) 04261268 Type of organisation (to be supplied by Corporate Procurement) Private Limited Company Status of Organisation (to be supplied by Corporate Procurement) Non-SME Contract Value (£) £          520,000 per annum estimated average Contract Duration 24 months Contract Start Date 01/02/2025 Contract End Date 31/01/2027 Optional Extension Period 1 12 months Optional Extension Period 2 12 months Who will approve each Extension Period? Procurement Board (extension > £150k) Contact Officer (Name & number) Peter Cowling 0161 793 4996 Lead Service Group Resources and Transformation How the contract was procured? (to be supplied by procurement) Framework contract Framework Details (where applicable) (procurement body, framework reference & title, start/ end date Crown Commercial Service RM6280 Postal Services and Solutions, Lot 2: Collection and Delivery of Letters, Large Letters and Parcels within UK Funding Source Revenue Budget Ethical Contractor (EC): Mayor’s Employment Charter   EC: Committed to sign Charter   EC: Accredited Living Wage Employer   The Reasons are In February 2015, a group of authorities from the Yorkshire and Humberside region agreed to form a collaborative group for the procurement of mail services in the region. This was subsequently extended to include authorities from Greater Manchester, The aim of this procurement was to establish a single service provider to deliver a robust postal service to the named contracting authorities that provides savings and social value to all authorities and to make use of volume-based discounts totalling approx. 20million items, CCS framework contracts were created using this process 2016-2020, The collaborative tender came to an end 31/08/20 and was due to be replaced. Due to delays during the covid pandemic and framework renewals, a short-term extension was agreed upon until a new framework could be established due to commence in March 2021 up until 2025.   Approval to go out to competition was granted by the procurement board during the approval of the final contract extension in 2024. The approval was given to utilise the combined procurement of the previous authorities via the same process’s as in 2015 & 2020  supported by the YPO using Crown commercial services RM6280 Lot2 Collection and delivery of letters, large letters and parcels within the UK.   At the beginning of 2024, a strategic group was formed from each of the authorities to understand the desire and scope for inclusion for a new aggregated contract being set up and evaluated by the Crown Commercial Service, in addition to the initial 25 authorities, including in the previous tenders the aggregation would be opened to other organisations. The aim is to increase the overall collaborative mail volume between authorities, which has been reduced to around 12 million items over the past 5-years and increase the volume-based discount to the group.   The Procurement Process Individual organisations interested in partaking were asked to provide specification requests in April 2024; there were 25 interested parties who agreed to move forward to tender, Seven suppliers are registered on the framework for Lot 2; invitations were issued to the suppliers that offered services, CCS published documents on 5th September 2024.Responses were received from the suppliers in accordance with the conditions of the tender via the portal before the 11am deadline on the 25th of September 2025.   Of the three submitted tenders, Royal Mail failed the qualification evaluation for the following reason: 3.4 of attachment 2 of the tender pack stated: “QUALIFICATION evaluation (Compliance Check)   First, we will complete a mandatory evaluation to make sure that you have answered all questions and have completed the Attachment 4 - Price Schedule in line with our instructions. All bids passing the mandatory evaluation will be progressed to the Technical Evaluation.”   Paragraph 7.2.7 of attachment 2 stated: “The prices submitted shall not exceed any existing commercial agreement rates and shall be held firm for the duration of the procurement and any resultant contracts.”   Royal Mail was asked to resubmit a compliant bid on two occasions and current commercial agreement rates were also shared with the them.   The submitted tender did not meet this instruction and exceeded the commercial agreement rate values, as such it did not progress to technical or price evaluation.   Evaluation process To ensure that the skills, background and experience of the evaluation team were appropriate for this procurement, each evaluator completed an evaluator declaration form. No conflicts of interest were declared.   An evaluator guidance session was held for each member of the evaluation team. The purpose of this session was to review the processes and methodology and the evaluation guidance to be applied to Potential Providers’ responses.   No Potential Provider(s) cited potential/perceived conflicts of interest.   CCS undertook clarifications via the eSourcing tool.   Each question was scored individually with robust justification, applying the criteria specific to that question within each of the questions as detailed within the Bid Pack.   Consensus scoring was applied following the procedures set out in the Bid Pack. CCS facilitated a consensus telephone call with all evaluation panel members present.   The price evaluation was conducted by the commercial evaluators. At no point prior to completion of the technical envelope evaluation did members of the technical evaluation panel have sight of costs offered.   Each bid was evaluated against the following criteria:   Technical evaluation 60% Implementation = 20% Approach to service delivery = 50% Contract management = 20% Social value – 10%   Commercial evaluation 40%             Price = 100%   Evaluation and Quality of responses The evaluation panel scored this section. Bids were evaluated independently and then moderated in a group evaluation panel meeting where the merits and shortcomings of each response provided by the bidders were discussed and then a score was agreed. This produced a final set of results as follows:             OBJECTIVE CRITERIA Weighted scores Bidder 1 Whistl Technical Evaluation 60%     Implementation 20% 12.5 20 Delivery of service 50% 37.5 50 Contract management 20% 15 15 Social Value 10% 7.5 10 Technical Total 72.5 95 Technical weighted Total 60% 43.5% 57%%       Commercial Evaluation     Price 100% 40% 33.81 Commercial weighted Total 40% 40% 33.81% Total Final score 83.5% 90.81%   As is evidenced in the details above Whistl’s response was far higher in all the areas other than price, although Whistl’s pricing was slightly more expensive than the other bidder, Whistl scored higher on quality overall in the evaluation making them the winning bidder.   Whistl will provide collection/sortation and onward distribution to Royal mail distribution centres, Royal mail will then deliver under its Universal services obligation for the final mile delivery.   Pricing Suppliers were asked to provide detailed pricing for a range of products including 1st & 2nd class mail. The costs have been provided based on an estimated combined authority volume and are below standard Royal Mail postage costs.   Based on the data provided by CCS from the interested authorities, this detailed pricing model has been created and has secured pricing throughout the length of the contract for a range of products from Whistl (this can be seen in the table below).   Product type April 24 onwards Feb-25 £ Diff % Saving Diff (per Item) 2nd Class Standard 0-100g £0.66 £0.57 £0.09 -13.6% 2nd Class Large 0-100g £0.76 £0.76 £0.00 0.0% Hand written 2nd class Standard 0-100g £0.81 £0.75 £0.06 -7.4% Hand Written 2nd class Large 0-100g £1.16 £0.77 £0.39 -33.6% Hand Written 2nd class Large 251-500g £1.89 £1.37 £0.52 -27.5% First Class Letter 0-100g £0.87 £0.93 -£0.06 6.9%   In the period April 2023-April 2024 the authority sent out a total of 851588 items of mail with a total spend of £477,269 due to significant pricing increases on all mail services from Royal Mail in April 2024 the cost to the organisation increased significantly.   The fluctuations in mail volume per year make estimating the organisations mail spend challenging, using the volumes based above and the new secured contract spend the below table demonstrates the potential savings of using the new contract.   Product type April 23/24 volume April 23-24 Spend Estimated April 24-25 Spend Current Pricing Est April 25/26 Spend New Pricing Est Savings 2nd Class Standard 0-100g 749738 £412,355.90 £494,827.08 £427,350.66 £67,476.42 2nd Class Large 0-100g 4545 £2,908.80 £3,454.20 £3,454.20 £0.00 Hand written 2nd class Standard 0-100g 12515 £8,385.05 £10,137.15 £9,386.25 £750.90 Hand Written 2nd class Large 0-100g 1432 £1,474.96 £1,661.12 £1,102.64 £558.48 Hand Written 2nd class Large 101-250g 781 £1,280.84 £1,476.09 £1,069.97 £406.12 First Class Letter 0-100g 82509 £51,155.58 £71,782.83 £76,733.37 -£4,950.54 Total 851520 £477,561.13 £583,338.47 £519,097.09 £64,241.38   In addition to the unit cost savings, procurement using the CCS framework has also secured fixed pricing for the initial term of the contract, which is two years.   As previously eluded too, mail volume and spending are influenced by various factors, these include both residential and business growth, statutory requirements, and enforcement activities such as parking services. The majority of mail volumes distributed by the authority originate from three service areas: ·      Revenue and Benefits, ·      Children's Services ·      Parking Services.   These services have statutory obligations to send correspondence via physical mail. Whilst we continually work with the services to digitally transform from traditional paper based services, there is still a requirement for items to be sent by physical mail, which are set out in legislation. For example annual billing and parking/bus lane fines.   Risks Identified Business Continuity & Operational Impact As Whistl are currently providing services to the tendering authorities is expected there should be zero impact on business continuity during the implementation of this contract.   Risk of legal challenge The tendering and evaluation process has been thorough, robust, well-documented and transparent. It is therefore considered that the Crown Commercial Service has mitigated itself from risk of legal challenge from unsuccessful bidders.   Social Value A weighting of 10% was evaluated into the tender agreement with suppliers being asked to describe any specific or tangible social value measures that they were prepared to offer, The priority theme for this tender is tackling economic inequality As part of the tender SCC requested the successful supplier to enrol into the Social Value portal to manage Salford specific social value.   Whistl outlines the below existing social value activities that it will continue to maintain throughout the period of the framework agreement.   Work Experience and Local Partnerships: Whistl provides work experience placements to individuals from disadvantaged backgrounds and those facing employment barriers. For instance, our Glasgow depot partners with North Lanarkshire Council to offer job support to individuals with additional learning needs. This has led to successful long-term employment and career progression within Whistl. Similar collaborations exist at our Bedford and Bolton depots, where we support local authority campaigns to assist long-term unemployed individuals, demonstrating our commitment to local communities. Furthermore, the Whistl Account Management team have worked in partnership with Salford City Council and has committed to the Salford Futures initiative for 2025. As part of this initiative, Whistl will provide an 8-week work experience placement to Salford residents who are currently unemployed or under-employed. A work placement is ideal for residents who have a gap on their CV and/or inconsistent employment history. Salford Futures will help to provide participants with the opportunity to develop the required workplace competencies skills and experiences.   Apprenticeships and Small Business Support: The Whistl Apprenticeship Fund supports small businesses near our depots, funding Level 2 to 5 apprenticeships focused on early years learning, digital, and engineering. This initiative not only benefits small businesses but also promotes skills development in local communities.   Whistl Driver Academy: Launched in 2021, the Driver Academy addresses the industry’s driver shortage and barriers to entry for underrepresented groups, including long-term unemployed and women. To date, over 40 individuals have completed the program, gaining HGV qualifications that typically cost £7,000. This initiative directly contributes to workforce development and community enrichment.   School Engagement and Career Advice: We actively engage with local schools and educational institutions to provide career guidance and work experience opportunities. For example, our HR Business Partner, Louise O’Neil, serves as an Enterprise Advisor for a high school in Bolton, helping bridge the gap between education and employment. We also offer work experience across various departments, such as logistics, HR, marketing, and finance, giving students exposure to a range of career paths. On the 18th July, Nicola Broadhurst, Internal Sales Manager along with 9 of her Whistl colleagues made the annual visit to St. James’ Highschool in Bolton, to share their advice on careers, skills and knowledge and opportunities at Whistl, and answer the many questions the students had.   Environmental Impact Whistl have provided information on its reduction of environmental impact initiatives some of these are listed below:   Hydrotreated Vegetable Oil (HVO) Vehicles To drive a step change in CO2 reductions at a customer level, Whistl have recently launched an initiative to give customers the option to replace the equivalent amount of diesel used for their collections and replace it with HVO. This reduces emissions on mail collections by 98%, a monthly statement on this CO2 reduction to support your Salford’ ESG management information can be provided.   FlexiPod – Route managment Flexipod is an innovative enhancement in state-of-the-art transport management system used by Whistl,. This advanced proof of delivery and collection software captures real-time information, feeding it back to their dedicated transport management system and reporting databases. With Flexipod and Paragon Whistl are able to plan routes more efficiently reducing overall stem mileage and reduce C02 output.   The source of funding is: Revenue Budgets   Legal Advice obtained: Yes   Financial Advice obtained: Yes   Procurement Advice obtained: Yes   HR Advice obtained: N/A   Climate Change Implications obtained: Yes   Contact Officer: Peter Cowling Telephone number: 0161 779 4996   ·      This matter is also subject to consider by the Lead Member for Resources and Transformation. The Lead Member has been consulted and is supportive of the proposed contract.   ·      This matter is not subject to consideration by another Lead Member.   ·      The appropriate Scrutiny Committee to call-in the decision is the Procurement Board.     Signed:    Cllr J Youd          Dated:    13 January 2025.                Lead Member   FOR DEMOCRATIC SERVICES USE ONLY   *           This decision was published on 13 January 2025 *           This decision will come in force at 4.00 p.m. on 20 January 2025 unless it is called-in in accordance with the Decision Making Process Rules.