2016-12-12 General Committee Agenda

GENERAL COMMITTEE MEETING AGENDA   12 DECEMBER 2016


                                    ATTACHMENT 3




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GENERAL COMMITTEE MEETING AGENDA                                                           12 DECEMBER 2016

                                                                                             ATTACHMENT 3
    AEC Group Pty Ltd (Brisbane)                                                                      =
    PO Box 941
    Spring Hill QLD 4004                                                            I EC             >
                                                                                                   OUTCOME DRIVEN

    29'" November 2016

    Wayne Schafer
    Manager Waste and Environmental Health
    Noosa Council

    Dear Wayne,

    RE: REVIEW OF WASTE MANAGEMENT CONTRACT TENDER ASSESSMENT

    AEC Group Pty Ltd (AEC) has undertaken a high-level review of the summary assessment spreadsheets
    prepared by Noosa Council (Council) from the tender documentation received by prospective contractors for
    Council's waste management contracts (consisting of separable portions A, B and C).
    From Council's review summary spreadsheets, a preferred tenderer was identified when taking account of both
    price and non-price components across the various permutations of contract combinations available to Council.
    AEC has undertaken a review of the assessment approach undertaken by Council in addition to the financial
    outcomes from the tendered rates for each separable portion and can confirm that Council's selection of the
    preferred tenderer is in fact appropriate.
    Regarding the potential risk associated with the financial costs to Council from changes in underlying rise and fall
    indices during the contract, this is deemed to be negligible when compared to the cost difference between the
    preferred tenderer and the next best tenderer which is of the order of $1.5 million per annum.
    This is particularly the case given that the preferred tenderer has a relatively high proportion of costs assigned to
    ‘Other’ within rise and fall, which is generally considered a less volatile and less risky inflation variable than
    ‘Labour’ and ‘Fuels & Oils’. As such, no detailed sensitivity analysis is required on the rise and fall variables
    during the contract.
    Should you have any queries in relation to the above, please do not hesitate to contact me on 0438 550 018 or

    Yours sincerely
            7 Z 2

    Gavin O’Donovan
    Director — Finance

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