Agenda item

This report addresses specific concerns in relation to the current provider of Direct Payment Support, HAFAD, which was not successful in the procurement process, clarifies the procurement process and explains how the transition to a new service arrangement will be managed.

Andrew Webster introduced the report, which had been requested by the Committee as a result of concerns in relation to the current provider of Direct Payment Support, HAFAD, which had not been successful in the procurement process. The purpose of the report was to address these specific concerns and to clarify the procurement process, and to explain how the transition to a new service arrangement would be managed.

Mr Webster stated that the key issue related to a misunderstanding by HAFAD in respect of the instructions relating to how to price the service, and what should be included in the hourly rate. HAFAD had formed the view that a single hour of service should be priced to take account of an estimate of the additional hours of follow up work that might be required to deliver a particular outcome, and one hour of face to face time was priced as the equivalent of approximately four hours of work. On receipt of the initial price submission, and noting the discrepancy in relation to HAFAD, all providers had been asked to clarify their price. In response, HAFAD had retained its pricing.

The framework agreement  for Self Directed Support Services for Adults and Children and Young People had been procured by four boroughs (Brent, Hammersmith & Fulham, Hillingdon and Kensington & Chelsea), and set out four lots covering the general range of services, which the four boroughs wanted to make available. Although HAFAD had fared well in terms on quality, the price submitted had been much higher than any other providers and consequently they were not selected as one of the five preferred providers on the Adult Services framework. They were one of three providers on the Children’s Services framework, but were again significantly the most expensive.

Legal advice had confirmed that the approach taken by Council officers was in accordance with the procurement rules, and that it would have been wrong to have approached only one bidder to seek clarification on the basis that their prices seemed too high. This would have provided an unfair opportunity to reduce their prices.

The Council recognised that the support of HAFAD would be key in the transition to the new process, and a two month contract would be agreed. Officers would continue to work closely with HAFAD.

The Chairman stated that whilst she appreciated that the procurement process was a straight forward commercial process, the nature of the service had overwhelming non-commercial aspects. In addition, HAFAD and the majority of providers were not commercial, and the process should have been considered against that background. The costs submitted by HAFAD were significantly higher than those of other providers and therefore it should have been obvious that they had been calculated on a different basis. It should have been possible to alert HAFAD at a stage at which the misunderstanding could have been rectified. However, officers had followed the rules and failed to look intelligently at the whole process.

Councillor Ginn responded that preferred providers had been selected on the basis of a quality score in addition to price. Officers considered that they had followed the correct procedure, in line with legal advice and were unable to approach HAFAD directly in relation to the inconsistency in pricing. The procurement process had been completed and successful bidders selected to be on the framework. It would not be possible to reverse this, but the process would be reviewed to prevent a future recurrence.

Councillor Cowan considered that the report was biased as it had been written by the officers involved in the procurement process. Mr Webster responded that his role was to provide objective advice to the Council and that officers were keen to learn from the process. On receipt of the initial price submissions, the discrepancy in relation to HAFAD had been noted, and all providers had been asked to clarify their price (4.6 of the report). 

Members queried why it had not been possible to prevent the misunderstanding and the validity of the legal advice. Mr Webster responded that officers had not been aware of the inconsistency until the end of the process. The on-line portal made available information to all bidders, and clarification in respect of price had been issued (4.4 of the report).

Maria Brenton stated that HAFAD had missed the clarification on the portal and had relied on the imprecise and unclear information in the tender document  (4.3 of the report). In addition HAFAD had received similarly unclear answers in response to its questions in respect of pricing of the service. HAFAD had been told to include all additional hours of follow up work and was not asked for a breakdown of price.

Councillor Graham queried whether a comparison between HAFAD’s bid and the current contract had been undertaken. Mr Webster responded that this was not possible as the previous block contract was not directly comparable.

Councillor Graham considered that the tender information had led different organisations to different conclusions. Mr Webster responded that only HAFAD had misunderstood the information. It had been correctly interpreted by other organisations, which were a mixture of local and specialist organisations, but not large multi-national companies.

Councillor Carlebach queried the level of confidence in the bidders in view of the inconsistency in price.  Councillor Ginn responded that there would be meetings with providers to work through the tender in detail. There were no concerns in respect of the prices.

Ms Brenton responded to a query that the impact on HAFAD had included four redundancies.

ACTION

A brief update to include recommendation on how to improve the procurement  process to be provided to the next meeting.

Action: Andrew Webster

Ms Brenton referred to the new service model whereby the provision of basic advice and information would be core to the work of the operational teams and for which  HAFAD had offered to provide training. The new service would commence on 1 April 2013 and there appeared to have been no staff training and service users had not been sent written information.

Mr Paul Rackham responded that letters would be sent to service users on the following day and a contact telephone number and e-mail address would be provided. Officers would work closely with HAFAD to put in place the required training and development plan across the boroughs. In addition, the in-coming providers would have expertise.

ACTION

A report on the Self Directed Support Services, including feedback from service users, to be provided to the June meeting.

Action: Andrew Webster

RESOLVED THAT:

1. The committee noted the contents of the report.

2. The committee expressed concern that the tender process was not adequately robust, resulting in a major anomaly in pricing.