Agenda item

To utilise Eastern Shires Purchasing Organisation (ESPO) Framework to supply Mains Gas to Council sites for the period 1 April 2023 to 31 March 2027.

Approval was sought to utilise Eastern Shires Purchasing Organisation (ESPO) Framework to appoint Total Energies Gas and Power Ltd to supply Mains Gas to Council sites for the period 1 April 2023 to 31 March 2027.

ESPO was a Central Purchasing Body (CPB), defined in the Public-Sector Contract Regulations as a contracting authority that:

•        acquired goods and services intended for one or more contracting authorities;

•        awarded public contracts intended for one or more contracting authorities;

•        concluded framework agreements for goods, services or works intended for one or more contracting authorities.

The most recognisable CPBs were known as the Pro5.The Pro5 was a group of regional local government CPBs that provided procurement services to the wider public sector and along with the Crown Commercial Service offered accredited Public Contracts Regulations 2015 compliant energy frameworks. The Pro5 members were:

•        Central Buying Consortium (CBC Laser)

•        Eastern Shires Purchasing Organisation (ESPO)

•        North Eastern Purchasing Organisation (NEPO)

•        Consortium Education (formerly West Mercia Supplies)

•        Yorkshire Purchasing Organisation (YPO).

It was proposed that participation in ESPO Framework 192_23 would be for the period 1 April 2023 to 31 March 2027 and based on current levels of consumption and price, the expenditure during the four-year period would have a value of £4,064 000.

In response to a question from the Chair of the Safer Neighbourhoods and Active Communities Scrutiny Board on whether the Council benefited from participation in ESPO energy framework, and why ESPO chose Total Energies Gas & Power Ltd to supply Mains Gas to Council sites, the Cabinet Member for Finance and Resources responded that participation in ESPO offered financial advantages in terms of flexible purchasing whereby energy was purchased from winning bidder in advance, when commodity prices were at their lowest. Flexible purchasing also limited exposure to rising costs by securing energy requirements in advance at multiple opportunities rather than at a single decision point. The provider was chosen following the evaluation of returned tenders, with the bid submitted by Total Energies Gas & Power Ltd being the most competitive.

Reason for Decision

The Pan-Government Energy Project was launched back in 2007 to improve the standard of energy procurement across the public sector. The key recommendation was that all public-sector organisations adopted one of the aggregated, flexible and risk managed energy procurement frameworks that were put in place by the recognised Central Purchasing Bodies (CPB) that had been evaluated by the Government’s Project Strategy Team against best practice criteria.

In 2011, the energy frameworks provided by these CPBs were reviewed by the Council’s Corporate Procurement Service and approval was provided to participate in the agreements offered by ESPO. Since this time, the Council had participated in the ESPO energy frameworks and had a representative on their stakeholder governance panel that established and reviewed the effectiveness of price risk strategy and purchasing performance.

The Council currently had 234 gas supply points that were included in the current ESPO energy framework arrangement that commenced in April 2019 and was due to expire on 31 March 2023.

ESPO had recently undertaken a Public Contracts Regulations 2015 compliant tendering exercise for gas on behalf of over 100 Local Authorities, Schools, Housing Associations and Charities with a combined total of 26000 supply points. Following the evaluation of returned tenders, the bid submitted by Total Energies Gas & Power Ltd was the most competitive and was duly recommended for acceptance by the stakeholder governance panel for the period 1 April 2023 to 31 March 2027.

Alternative Options

An option was to undertake tendering exercises on behalf of the Council in isolation of the Pro5 providers which would be against the best practice guidance published from the Pan-Government Energy Project. Alternatively, to seek to transfer to another Pro5 Framework provider but this would result in the loss of representation on stakeholder governance panels.

Agreed:-

(1)     that approval be given to utilise Eastern Shires Purchasing Organisation (ESPO) Framework 192_23 to appoint Total Energies Gas and Power Ltd to supply Mains Gas to Council sites for the period 1 April 2023 to 31 March 2027;

(2)   that, in relation to (1) above, the Director of Law and Governance and Monitoring Officer be authorised to enter into appropriate contract with Total Energies Gas and Power Ltd.