Tenders Subcommittee
– Terms of Reference
A Subcommittee of
the Works and Services Committee
Fields of
Activity
The Tenders Subcommittee is responsible for assisting
council in its general overview of procurement and tender activity by accepting
tenders which exceed the Chief Executive’s delegated authority to approve,
for projects previously approved by Council or a Standing Committee within the
delegated authority.
Membership
Chairman appointed
by the Council
4 members
appointed by the Council
Chief Executive
Group Manager:
Asset Management
For the avoidance
of doubt the references in this delegation to the ‘Chief Executive’
and ‘Group Manager: Asset Management’ extends to include any
persons from time to time appointed in writing to those roles in an acting
capacity.
Quorum – Any four members.
Delegated
Powers
Authority to accept tenders for individual projects previously approved
by the Council or a Standing Committee of the Council up to a value of
$8,000,000
Responsibility to provide oversight and direction on tendering
processes in general and/or specific issues relating to a particular project
The Committee
reports to the Works and Services Committee
HASTINGS DISTRICT COUNCIL
Tenders Subcommittee MEETING
Thursday, 12 October 2017
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VENUE:
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Landmarks Room
Ground Floor
Civic Administration Building
Lyndon Road East
Hastings
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TIME:
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9.00am
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A G E N D A
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1. Apologies
At the close of the agenda no
apologies had been received.
At the close of the agenda no
requests for leave of absence had been received.
2. Conflict
of Interest
Members need to be vigilant to
stand aside from decision-making when a conflict arises between their role as a
Member of the Council and any private or other external interest they might
have. This note is provided as a reminder to Members to scan the agenda
and assess their own private interests and identify where they may have a
pecuniary or other conflict of interest, or where there may be perceptions of
conflict of interest.
If a Member feels they do
have a conflict of interest, they should publicly declare that at the start of
the relevant item of business and withdraw from participating in the
meeting. If a Member thinks they may have a conflict of interest,
they can seek advice from the Chief Executive or Executive Advisor/Manager:
Office of the Chief Executive (preferably before the meeting).
It is noted that while Members can
seek advice and discuss these matters, the final decision as to whether a
conflict exists rests with the member.
3. Confirmation
of Minutes
Minutes of the
Tenders Subcommittee Meeting held Thursday 28 September 2017, including minutes
while the public were excluded.
(Previously circulated)
4. Direct engagement
of Techlight for the supply of Telematics light control units(LCU123) 5
5. Additional
Business Items
6. Extraordinary
Business Items
REPORT TO: Tenders
Subcommittee
MEETING DATE: Thursday 12
October 2017
FROM: Transportation Asset Manager
Marius
van Niekerk
SUBJECT: Direct
engagement of Techlight for the supply of Telematics light control
units(LCU123)
1.0 SUMMARY
1.1 The
purpose of this report is to gain the subcommittee’s approval to procure
1,151 Light Control Units (LCU) by direct engagement.
1.2 The LCU’s
form part of the accelerated streetlight to LED conversion programme approved
by Council. In the first year of the conversion programme the LCU’s were
included in the request for tender for LED lights and as a result attracted a
handling charge from tenderers. The reason for the direct engagement is to
avoid the handling charges.
1.3 Quotations were
received from the sole licensed supplier.
1.4 This report concludes
by recommending that LCU’s are procured by direct engagement of Techlight
Ltd, the sole licensed supplier of the product for the supply of 1151 LCUs for
the amount of $179,812 including air freight and excluding GST.
2.0 BACKGROUND
2.1 Hastings
District Council is currently in the third year of an accelerated three year
streetlight to Light Emitting Diodes (LED) conversion programme approved by
Council. As part of the conversion programme each LED requires a light control
unit (LCU) that enables the lights to be controlled and monitored from a
central management system.
2.2 The
use of a central management system (CMS) is essential to maximise the use of
new technology LED lights. A CMS individually monitors each streetlight in
terms of performance and power consumption. Streetlights may also be
individually controlled in terms of on and off times and varying dimming
profiles applied to maximise power savings and provide appropriate levels of
light for the time of day. The system can also be used as a billing reference
which may change HDC billing from a bulk charge to individually metered billing.
2.3 The
LCU is the component that is installed on each streetlight and allows the CMS
to communicate with the streetlight using a radio link through a data
communications unit. The system has a web based software front end which
enables the management of the lights.
2.4 Streetlights
with control systems offer features with tremendous potential to save energy,
mitigate waste, reduce light pollution and increase public safety. These
features are likely to be in use for 20 years and would represent a significant
lost opportunity if not adopted. This system is successfully installed at
Auckland Transport with over 44,000 lights programmed to be replaced with LED
lights equipped with telematics LCU’s in the next five years.
3.0 OPTIONS
3.1 Option
1 – Procure by direct engagement 1151 Telematics LCU.
3.2 The
$152.00 (exclusive of GST) price is based on a quotation received from
Telematics NZ for direct engagement. For comparison, the rate for the supply of
the Telematics LCU last year was $197. This included handling charges added by
the LED supplier. (The LCU supply was included in the Request for Tender for
LED luminaire supply). Auckland Transport also use the Telematics LCU and the
price for supply of 14000 units is $140.00 per unit by direct engagement. These
rates include airfreight to reduce the delivery timeframes from 5–6
months to 3-4 months.
3.3 Council
already owns a Telematics gateway which will be used to communicate with the
LCUs.
3.4 Option
2 – Procure by separate request for tender a gateway and 1151 LCU.
3.5 The
LCU price is an estimate received from Opus and is indicative. The units
currently available in the market varies significantly in terms of
specification (Radio based vs cellular 4G/3G vs Mesh networks) which may affect
the price significantly. Phillips confirmed that their CityTouch (proprietary)
connector which is the equivalent of a Telematics LCU, utilising a 3g mobile
connection costs $190 per light.
3.6 Option
3 – Procure 1151 shortening caps to enable LED lights to function
and wait for technology to mature.
3.7 This option was proposed to buy some time and wait for the LCU and
gateway technology to mature in approximately 2 to 3 years. It is deemed that
by then, the technology will be “plug and play” with any supplier’s
equipment being able to work seamlessly with any other supplier’s
equipment. With the subsidy rate change to 85%, announced recently by NZTA, it
is deemed that this option is no longer viable.
4.0 ASSESSMENT
OF OPTIONS (INCLUDING FINANCIAL IMPLICATIONS)
4.1 When
comparing the cost of the options it is clear that Option 3 has the highest
cost due to the cost of installation and shortening cap. The installation of
the shortening cap and then reinstallation of a LCU at a later stage is not
economical when compared with options 1 and 2. Pursuing option 3 will also mean
that council cannot take full advantage of the subsidy change recently
announced by NZTA. Option 3 is therefore not considered a viable option.
4.2 Option
1 is the most cost efficient based on the price estimates and is delivering the
best value for money as it is making use of the existing Telematics gateway.
Option 2 requires the procurement of two additional gateways (assuming the
cheapest option for additional gateway with 1000 unit capacity each) or, should
a larger capacity gateway be considered, the cost would increase by an
additional $ 25,000. There is also the added complexity it adds to the
communications infrastructure setup which may have long term cost implication
in terms of maintenance and operations. Option 2 has an element of the unknown
as the price of LCU units could not be confirmed. It may also take an
additional 6 weeks to procure and this may cause delays.
4.3 Option
1 does not require any additional spending apart from the quoted price received
and all the components purchased will be used for the twenty years lifespan.
Option 1 is the preferred option as it represents the best value for money,
makes use of the existing Telematics gateway, has low risk and realises significant
benefits of getting the LED’s installed in a short timeframe.
5.0 PREFERRED
OPTION/S AND REASONS
5.1 The
preferred option is option 1 - Procure by direct
engagement 1151 Telematics LCU123. The reasons for preferring this option are:
5.2 It is the most cost effective as it makes use of the existing
Telematics Gateway
5.3 It has the lowest cost of the options considered.
5.4 It
does not lock Council in to a specific vendor.
5.5 This
option avoids handling charges that may be added to the cost if the supply of
the LCU’s is included within the request for tender for LED lights.
5.6 This
option has low risk as these units are currently in use on the streetlight
network and is also in use by Auckland Transport for the LED conversion
programme.
6.0 ENGAGEMENT
PROCESS
6.1 In
accordance with Section 5.3 ‘Supplier Selection Methods’ of the
Hastings District Council Procurement Strategy, it is requested that approval
be given to now directly engage Techlight Ltd, being the nominated contractor
to supply Telematics Light Control Units (LCU123)
6.2 Under Section 5.3, directly procuring from a
single supplier may be approved when:
· The goods or services require specialised skills or are very complex
and there is a limited number of qualified suppliers
· The required goods and services are available from only one source
· Standardisation or compatibility with existing equipment or services
is necessary, and can be achieved through only one supplier
· The Supplier involved has already carried out a substantial amount
of contributing works and prices have been competitively tested previously or
the costs of proceeding through a competitive procedure are likely to be
greater than any potential savings that may be secured through engaging in a
competitive process.
7.0 FEES
AND FUNDING
7.1 The
unit cost for each LCU is $152.00 excluding GST. The estimated tendered
price includes $4,860.00 for air freight.
7.2 This
funds allocated to this project is shown below.
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Budget
Area
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Estimated
Tender Price(LED)
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Supply of
LCU
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Ancillary
Costs
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Total
Project Cost
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Funds
Allocated
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Variance
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Streetlight renewals
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$270,486
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$179,812
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$143,875
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$594,173
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$600,000
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$5,827
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Ancillary costs
includes installation and contingencies.
7.3 Funding
for the purchase of LCU’s are subject to confirmation from NZTA approval
to bring forward money allocated to 18/21 LTP to the 15/18 LTP as all funding
in the existing 15/18 LTP is already committed.
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8.0 RECOMMENDATIONS AND
REASONS
A) That
the report of the Transportation Asset Manager titled “Direct
engagement of Techlight for the supply of Telematics light control
units(LCU123)” dated 12/10/2017 be received.
i) With the reasons for this decision being that the objective of the
decision will contribute to meeting the current and future needs of communities
for good quality local infrastructure
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Attachments:
There are no
attachments for this report.
Hastings District
Council