Following on from our post yesterday, today we outline how BCBC’s waste and recycling contractor should be penalised if they fail to deliver the service in accordance with the contract specification.
Kier have been engaged under a “performance based” contract in which the Contractor’s performance will be assessed against the required standards using Performance Standards listed within the contract Performance Framework.
Failure to achieve the performance standards will attract Performance Failure Points. Failure points will be aggregated and if they exceed certain levels shown below there will be financial deductions from the monthly payment. It could also lead to termination of the contract.
The Contractor is responsible for monitoring, recording and reporting Performance Standard Failures to BCBC within Daily, Weekly, Monthly, Quarterly and Annual reports.
- The Contractor shall provide
- details of each failure that occurred
- the Performance Failure Points that shall apply with consideration to the Repeated Failure Multiplier, where applicable.
BCBC may undertake its own assessment and monitoring to verify the accuracy of any information submitted by the Contractor
Where the Contractor fails to meet a Performance Standard and such failure is not rectified within a Rectification Period, Performance Failure Points apply.
The exception to this rule will apply to Missed Collections for which Performance Failure Points shall apply immediately for each confirmed Missed Collection and again thereafter if such failure is not rectified within the Rectification Period. (For the avoidance of doubt, a Missed Collection from a Communal Collection Point will be deemed to reflect Missed Collections from each individual household assigned to that collection point).
If the Contractor fails to restore a Performance Standard following the expiry of the second or subsequent Rectification Periods, the resultant Performance Failure Points that apply for each further Rectification Period shall be subject to a Repeated Failure Multiplier.
BCBC does not expect 100% compliance with the Performance Standards. Therefore, Performance Deductions shall apply only if the monthly Performance Failure Points exceed 5,000 points. (this means that 2,499 missed collections a month could occur yet no deductions would apply!)
The monthly deductions arising from Performance Failure Points accrual are summarised in the table below.
|Monthly Performance Failure Point Banding||Performance Deductions from Monthly Invoices (£)|
|>5,000 to ≤7,500||£625|
|>7,500 to ≤10,000||£1,250|
|>10,000 to ≤12,500||£1,875|
|>12,500 to ≤15,000||£2,500|
|>15,000 to ≤17,500||£5,000|
|>17,500 to ≤20,000||£10,000|
|>20,000 to ≤25,000||£15,000|
|>25,000 to ≤30,000||£20,000|
BCBC has the right to terminate the Contract if the Contractor accrues:
- a total of 180,000 Performance Failure Points or more in any continuous 6 month period; or
- a total of 360,000 Performance Failure Points or more in any continuous 12 month period.
In summary there are a number of Performance Standards within the contract. Failure to achieve these standards attracts penalty points. If fewer than 5,000 points in a month are collected there is no financial penalty if 5,000 or greater there is a sliding scale from £625 to £25,000 for in excess of 30,000 points. The maximum deduction is £25,000 per month.
Given that the total award value of the contract is £82,268,144 over a seven year term equating to approximately £979,382 a month the maximum possible monthly deduction due to performance failure may not seem significant deterrent to poor performance. However, it is essential that BCBC are using the performance framework to drive the performance of Kier.
£25,000 per month is £300,000 a year, This would go a long way at a time when BCBC are making cuts to essential services.
Over the following few days we will provide details of the Performance Standards along with the Failure Penalty Points that they attract so that you and your Borough Councillors can hold the BCBC administration and the contractor to account.