Regional Procurement - August 2013
By: Regional Procurement Coordinator, Steven Cosatto...
I am pleased to advise that as of 1 August 2013, participating members Cairns Regional Council, Cassowary Coast Regional Council, Cook Shire Council and Tablelands Regional Council, all have ratified both the FNQ 003 Bitumen Reseal arrangement and the Register of Pre-qualified Suppliers (ROPS) for Road Construction and Maintenance Services. These milestones have been achieved through a significant collaborative effort for the region's works and services departments. The processes developed and the lessons learnt by the Project Steering Committee (PSC) have laid a foundation that other projects can capitalise from and build onto.
Bitumen Reseals
The FNQ 003 Bitumen Reseal arrangement delivered a regional collective saving of 18% in direct costs to participating Councils, which alone highlights the success of the collective. It has also become evident in the process review to date that the indirect savings/benefits to councils have added additional weight to the collective benefit.
The FNQ 003 reseals arrangement has transferred large amounts of risk, liability and project responsibility from Councils to the contractor. This transfer includes items such as the initial seal design, coordination of the bitumen, aggregate and traffic components, contract administration, points of contact for public consultation and stockpile management. With the contractor accepting these roles, it also provides Councils with an additional layer of separation in liability in areas such as property, personal and environmental management. Whilst this transfer is difficult to quantify in dollar terms, through benchmarking against collective reseal arrangements from other regions it appears the market prices this risk at 10% – 20% of the value of the contract.
Register of Pre-Qualified Suppliers
As mentioned in previous newsletters, the PSC through market research identified that the FNQ 003 arrangement would attract a larger than expected supplier response. It was acknowledged this would provide Councils with an opportunity to further utilise this broad base of suppliers and the differing services they can provide to develop a Register of Pre-qualified Suppliers (ROPS). This has been identified as another intangible benefit from the collective process.
Sodium Hypochlorite and Liquid Alum
Both of these Water and Waste arrangements are currently undergoing their first contract review process. The treatment coordinators from participating member Councils will review supplier performance, internal audits, the centralised incident register and identify areas for improvement. It has been encouraging that suppliers have only adjusted their prices in line with CPI and increases to freight costs (totalling approximately 3.5%) for the 2013/2014 financial year.
FNQROC Procurement Meeting 2 August 2013
The quarterly Regional Procurement Meeting will be held at CRC chambers with a presentation from the Queensland Audit Office providing procurement personnel with advice regarding the audit process, including how Councils are selected for audits, what the auditors review and matters relating to audit findings.