ESPO Vehicle Procurement Service

Introduction and Background

1. The Eastern Shires Purchasing Organisation (ESPO) is a Local Authority purchasing and distribution consortium jointly owned by Leicester City Council, Peterborough City Council, and by the County Councils of Leicestershire, Lincolnshire, Warwickshire, Cambridgeshire and Norfolk.

2. ESPO was established by its member authorities to provide a comprehensive procurement service to their spending departments and other eligible customers.

3. ESPO's Objectives are to:

a Achieve overall savings for the customer.
b Assist our customers to improve purchasing performance through the provision of a comprehensive, professional procurement service.
c Provide a simple, time saving and effective system for the purchasing and supply of goods and services whilst preserving full public accountability, including compliance with EU Procurement Directives and other financial regulations.
d To assist customers in meeting key corporate, strategic and operational objectives.

4. ESPO provides its procurement services to all departments of Leicester City Council, Peterborough City Council, and the County Councils of Leicestershire, Lincolnshire, Warwickshire, Cambridgeshire and Norfolk. ESPO also serves other City, District and Borough Councils along with schools, colleges, other statutory bodies (Fire Services etc.) and charitable organisations which elect to make use of its specialist knowledge and services.

 

Vehicle Procurement
5. ESPO provides a comprehensive bespoke procurement service tailored to each client's needs in order to assist them with the procurement (purchase, contract hire or other funded acquisition) of all types of vehicles, including cars, minibuses, LCVs and HGVs, specialist vehicles (e.g. refuse collection vehicles, buses, fire appliances) and grounds maintenance equipment.

6. ESPO's experienced and qualified staff are here to assist clients through the complex procurement process, including project planning, advice on EU procurement directives, management of the tender process, negotiations and contract award. We aim to meet the need of managers and budget holders to obtain value for money.

Tendering Procedures
7. ESPO's tendering procedures have been put in place in order to satisfy public sector requirements for competitive pricing and compliance with standing orders and EU procurement regulations. ESPO's service provides the customer with flexibility to select the most appropriate procurement process, which may be a specifically advertised tendering process or alternatively access to established 'framework' contracts that provide the following benefits:

 

  • Compliance with EU procurement legislation.
  • Cover the majority of vehicle types, including refuse collection vehicles, HGVs, buses of all seating capacities, etc.
  • Significant reductions in the timescales and formalities required to complete a procurement exercise.
  • Fleet terms already negotiated with the majority of vehicle manufacturers.
  • Supply terms agreed with manufacturers' agents (franchised dealers) where necessary.
  • Existing relationships with contract hire and leasing providers.
  • Secondary competition within the framework contract may produce further savings over existing negotiated terms.
  • Opportunity to introduce client-specific terms and conditions of contract.

 

8. ESPO currently has in place four framework contracts specifically relevant to commercial vehicles and refuse collection vehicles; two covering the purchase option, the others involving providers of contract hire and other funding facilities.

8.1. Contract 215 Supply of Commercial Vehicles. This Contract is used by ESPO to procure via outright purchase the majority of commercial vehicles required by its members and other local authorities, including car-derived and other vans, minibuses, light and heavy commercial vehicles.

Most major manufacturers participate, providing fleet support for ESPO client authorities, these include:
Citroen, Daewoo, DAF, Fiat, Foden, Ford, Isuzu, Iveco, Land Rover, LDV, MAN, Mercedes, Mitsubishi, Nissan, Peugeot, Renault, Toyota, Vauxhall and VW.

 

ESPO has negotiated terms in place with a number of dealers across the consortium area
Suppliers will be expected to act as main contractor for the supply of vehicles requiring bodywork or conversion for specific purposes, such as minibuses (van conversions and coach-built), tippers, flat beds, box vans, etc.

 

8.2. Contract 215R Supply of RCVs covers the purchase option and includes most of the UK's suppliers of refuse collection vehicles, i.e.
Dennis Eagle, CP Davidson & Sons, Farid, Faun, Garwood, Geesink, Heil, Link tip, Muni-serv and Summit Engineering as well as Chassis Manufacturers including Volvo, Scania and others.

Like 215, generic conditions of supply have been agreed in this arrangement, which can be added to or amended for specific client requirements. Due to the nature of the vehicles concerned under 215R, pricing and other terms are also established for specific requirements as and when they occur. ESPO's experience with buying refuse collection vehicles for a number of authorities assists in ensuring that a competitive deal is obtained.

 

8.3. Contract 218 Contract Hire and 218S Contract Hire Specialist vehicle currently includes 56 providers of contract hire and leasing facilities for cars, LCVs and specialist vehicles. Within these arrangements selected contractors are invited to quote for specific vehicle types and contract profiles; contractors must be able to satisfy the client of their ability to meet its delivery, service and after-sales support requirements.

 

ESPO Role and Responsibilities
9. There follows a summary of the individual tasks which ESPO would be able to carry out on behalf of Hampshire County Council; this is not however a prescriptive list of tasks – ESPO's role may evolve during the lifetime of any procurement project, depending on the actual requirements of the client.

 

Advising on Strategy
10. Initially, ESPO can provide advice regarding the preferred procurement strategy, which may involve either the use of existing framework contracts, or a 'stand-alone' tender exercise carried out in accordance with EU Directives and any specific local regulations that the client wishes to adhere (if not inconsistent with the EU Directives).

 

Managing the Procurement Process
11. The main stages of a procurement process are as follows:

  • Advertise the requirement (if required outside of a framework contract).
  • Prepare Invitation to Tender including specification of requirements.
  • Issue Invitations and receive Tenders.
  • Presentation of Tender Results.
  • Conduct evaluations of Tenders in conjunction with Hampshire County Council
  • Conduct Post Tender Negotiations as necessary
  • Contract Award

 

12. We allow for all the above stages in the tendering process to be carried out in a timely manner, taking account of advertising requirements, pre-tender qualification, the tender process, contractor and offer evaluation, post-tender negotiations, etc. A timetable will be agreed for each exercise carried out.

 

Compliance with European Union Directives
13. Should the requirement be subject competition outside of an existing framework contract, we must therefore have due regard to minimum timescales imposed by the EU Directives and or other statutory requirements, including the specification of the vehicles required and the award criteria to be used in the selection of contractor.

 

Advertising
14. We ensure that appropriate notice of your requirements is given to potential contractors by advertising in the Official Journal of the European Union (OJEU) and other relevant media as appropriate.

 

Assisting With Contract Specification
15. We would rely upon Hampshire County Council to provide the basic vehicle specification. ESPO will prepare a formal contract specification to be presented (as part of the invitation to tender) to the market place.

 

Drafting Tender Documentation
16. Unless requested to do otherwise, ESPO would assume responsibility for preparing and drafting all relevant documentation, i.e.

Invitation to Tender– this is the document that 'presents' the requirement and against which bids will be submitted. The Invitation to Tender comprises the following:

  • Guidance Notes and Instructions to Tenderers - this provides details of the process adopted and details the criteria against which bids will be evaluated.
  • Specification of requirements ( as produced by Hampshire County Council)
  • Conditions of contract
  • Forms of tender (where bidders set out their proposals and prices)
  • Declarations, guarantees, etc (if appropriate)

 

Business Questionnaire – this will comprise the following sections, the information from which will be used in the evaluation of tenders:

  • Company Details and Trading History
  • Financial Details
  • Experience and References
  • Quality Assurance
  • Equal Opportunities
  • Health & Safety and Environmental Policies

Issue and Receipt of Documentation
17. ESPO will formally issue and receive all documentation. We will also undertake the printing / binding of such documentation.

 

Evaluation
18. Evaluation of tenders is a multi-stage procedure:

  • Initial Evaluation – to assess the financial offers and to ensure that candidates possess the necessary resources, capability, experience etc.
  • Clarification– this process is required with tenderers satisfying the initial evaluation criteria in order to remove possible uncertainties or ambiguities and to accurately assess bids.
  • Preferred Tenderer – identification of candidate/s who best satisfy the financial and service requirements of Hampshire County Council.
  • Post Tender Negotiations – as may be required in respect of unsatisfactory aspects of the preferred bid.

 

19. Evaluation must be conducted in accordance with principles of fairness and objectivity, and must represent an auditable record of how and why decisions were taken. ESPO has developed well-proven evaluation methodologies, which will meet these requirements and allow for the full involvement of Hampshire County Council.

 

Presentations
20. Following the receipt of tenders, we will prepare summaries of the financial offers received and an initial report of the qualitative aspects of the bids.

21. As part of the tender evaluation (and clarification) process, the client may wish to meet with and/or receive from some or all of the organisations submitting bids. Also site visits (to review performance provided to other authorities) may similarly be required. ESPO will orchestrate such activities if requested and obtain any further information that may be required to assist in the evaluation of tenders.

 

Negotiation
22. ESPO will help with or conduct post-tender negotiation with the preferred supplier(s), in accordance with the CIPS code of practice.

Award and De-briefing
23. We can offer formally to award the contract, and to undertake any 'de-briefings' that may be requested by unsuccessful tenderers.

 

Maintaining a 'Watching Brief'
24. Once vehicles are supplied, it is anticipated that a direct relationship will be established between the contractor and client. If difficulties should arise however, or contractual terms need to be reviewed, ESPO will be on hand to assist in resolution of these issues.

 

ESPO Service Charge
25. ESPO has a statutory obligation to recover the costs of its operation. By agreement with ESPO's member authorities, we achieve this either by means of a fee chargeable for our services or, preferably, by means of a rebate linked to actual contract value, which is payable to ESPO directly by the appointed contractor(s), on a retrospective basis.

The advantages of a rebate-based cost recovery mechanism include:

  • Elimination of the need to find separate funds to cover ESPO costs.
  • Requires no administrative action by the client authority
  • Most significantly – contractors will usually simply absorb the small percentage involved, resulting effectively in a free ESPO service to the client.

 

Typically, given the value and complexity of a contract, rebates charged to the appointed Contractor(s) are no more than 1% of the contract value, with there being no direct charge to the client. Note: the rebate includes all ESPO's disbursements, but excluding advertisements in trade journals and legal services that may be required.

We are happy to discuss this matter further if Hampshire County Council so wish.