Finance and Resources Committee
10:00am, Thursday, 30 October 2014
Street Lighting - Supply and Delivery of LED
Luminaires
Item number
7.22
Report number
Executive/routine
Wards
All
Executive summary
The introduction of Light Emitting Diode (LED) lighting represents an opportunity for the
Council to make significant savings in terms of energy consumption and carbon
emissions.
The Council has secured £2.1m interest free funding through Salix to replace
approximately 7,200 obsolete street lights with LED luminaires. This funding will
support the purchase of LED luminaires, associated galvanised sleeves and the full
installation work associated with this project.
Links
Coalition pledges
P44
Council outcomes
CO18, CO19, CO25
Single Outcome Agreement
SO4
Report
Street Lighting - Supply and Delivery of LED
Luminaires
Recommendations
1.1
It is recommended that the Finance and Resources Committee notes the award
of this contract to MacLean Electrical to supply and deliver approximately 7,200
Light Emitting Diode (LED) luminaires to the City of Edinburgh Council.
1.2
The decision to award this contract was made under the urgency provisions of
the Committee’s Terms of Reference and Delegated Functions in order to take
up the funding from Salix. This action is being reported to this Committee as
required by Provision-4 of these Terms of Reference.
Background
2.1
Due to the mixed profile of street lighting columns in Edinburgh, it is intended to
install the LED luminaires on both steel and concrete columns.
2.2
The procurement of galvanised steel sleeves will support the LED project by
enabling LEDs to be fitted on to concrete lighting columns. The procurement of
these sleeves was approved by the Acting Head of Service for Transport as the
Contract value was £162,852.00.
2.3
Salix Finance Limited is an independent, not for profit, company funded by the
Department for Energy and Climate Change, the Welsh Assembly Government
and the Scottish Government, via the Carbon Trust. Its borrowing interest rate is
0%. A business case was presented, based on the replacement of old lighting
with new more energy efficient LED white light technologies. The Business
Case was approved by Salix on 31 October 2013.
2.4
The Salix funding was originally offered on the premise that the LED project was
to be completed by 1 September 2014.
2.5
The procurement of the LED luminaires and the steel sleeves was to be through
the Scotland Excel Street Lighting Materials Framework. Scotland Excel was the
process of producing a new framework contract for street lighting as the existing
one was due to expire at the end of March 2014. Due to delays with
procurement, the new framework was not scheduled to commence until 1 July
2014 however, a subsequent legal challenge has meant that the award of the
Framework was suspended and the Council was unable to utilise the Framework
as a route to market.
Finance and Resources Committee – 30 October 2014
Page 2
2.6
Consequently, the Council was unable to carry out a new procurement exercise
in time for the deadline of 1 September 2014 requested by Salix.
2.7
Due to the legal challenge against the new framework contract, the existing
Scotland Excel Street Lighting Materials Framework has been extended until
31 October 2014 and is being utilised as the route to market for LEDs and
Sleeves.
2.8
Salix has agreed to extend the funding deadline to the 31 March 2015, provided
that the LEDs and Sleeves are delivered to the Council in sufficient time to
support significant completion of the project by the end of 2014, and full
completion of the project by the end of February 2015.
2.9
In order to ensure that the overall programme is successfully delivered,
emergency powers were used on an exceptional basis, in order to mitigate the
risks of:
(i)
non-delivery;
(ii)
avoiding any delays to the programme; and
(iii)
safeguarding access to the significant Salix funding which both LEDs and
Steel Sleeves procurements are critically dependent upon.
Main report
3.1
This contract will provide approximately 7,200 LED luminaries to the Council and
enable these to be fitted on to concrete and steel columns across Edinburgh.
3.2
A Mini-Competition was advertised on Public Contracts Scotland portal on
5 September 2014, utilising the Scotland Excel Street Lighting Materials
Framework Agreement.
3.3
The technical evaluations were carried out by three Street Lighting staff
overseen by two representatives from Commercial and Procurement Services.
3.4
The pricing evaluation was undertaken after the completion of the quality
evaluation, and the most economically advantageous tender was identified.
3.5
The evaluation criteria utilised a ratio of 70% commercial and 30% technical to
ensure that suppliers were evaluated on their ability to supply materials at
competitive rates and to measure their ability to meet the technical performance
specification.
3.6
The six suppliers under Lot 1 – Luminaires/Lanterns of the Framework
Agreement were invited to participate in the Mini-Competition.
3.7
The tender consisted of eight design configurations based on different road
layouts and Street Lighting design standards.
Finance and Resources Committee – 30 October 2014
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3.8
The six suppliers were invited to submit bids for either, some or all of the
configurations. This resulted in a total of fifteen bids being submitted across all
design configurations.
3.9
Following the conclusion of the technical and commercial evaluation of all
submissions and for all design configurations, MacLean Electrical has been
identified as the most economically advantageous tender.
3.10
The overall estimated value of the Contract is £1,689,120.
3.11
For the purposes of this report, all projections and costs are based on
purchasing 7,200 LEDS. It should be noted that this quantity may be subject to
change during the term of the contract.
Measures of success
4.1
Utilising LED luminaires on existing concrete and steel columns will allow the
Council to make considerable energy savings as well as reduced carbon
emissions.
Financial impact
5.1
The overall purchase cost of the 7,200 LED luminaires is £1,689,168.
5.2
The estimated savings figure in regard to unit cost is £168.26, based on an
average unit cost of £402.86, resulting from the two procurements carried out in
Financial Year 2012/13 as per section 5.4 below.
5.3
On the basis of the quantities of this procurement, there is a purchase cost
saving of £1,211,472.
5.4
This savings figure is based on historical spend data in comparison with the
tender submission from the preferred bidder as follows:
Financial Year
Unit Cost
Quantity
Overall Cost
2012/13
£385.71
50
£19,285.50
2012/13
£420.01
50
£21,000.50
2014/15
£234.60
7,200
£1,689,120.00
5.5
The Council has benefitted from increased buying power, through economies of
scale, by opting for a bulk purchasing strategy.The whole life costs, resulting
from this contract, will deliver considerable benefits and savings to the Council.
5.7
The use of the LEDs is estimated to result in annual energy savings of
£275,800.
Finance and Resources Committee – 30 October 2014
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5.8
Over the 20 year life of the installation, this estimated energy saving will equate
to £10,504,800, based on an estimated energy inflation of 8% per annum for the
first 10 years and 3% per annum for the next 10 years.
5.9
LED luminaires do not require any ongoing maintenance and have a lifespan of
approximately 20 years compared with the three to four year lifespan for a
standard luminaire.
5.10
This procurement will contribute to the realisation of a significant reduction in
Carbon Tax Commitment costs which is £16.40 per tonne, resulting in an
estimated annual saving of approximately £23,255 from the procurement of
7,200 LED luminaires.
5.11
Over the 20 year life of the installation, the estimated saving in Carbon Tax
Commitment costs will equate to £465,100 based on £16.40 per tonne. It is
known that this charge will increase in future years however, accurate charging
information for the full 20 years is not known at this time.
Risk, policy, compliance and governance impact
6.1
The following risks have been identified as potential issues to the Council in
relation to the successful delivery of this contract.
Risk
Mitigating Action
Timescales – Salix funding
must be fully utilised by
March 2015
Salix has provided £2.1m of funding for this project
and it is essential that the contract is substantively
awarded as soon as possible, but no later than
31 October 2014, to ensure that the works are
completed and the funding is utilised by 31 March
2014.
Delivery Programme – the
LED luminaires must be
delivered within a maximum
period of 12 weeks to
ensure successful delivery
of the LED programme.
The quality assessment of suppliers focused on
ensuring that bidders were able to meet the
delivery programme under this contract. The
preferred bidder clearly demonstrated the
capability and capacity to service the
requirements of this Contract.
Quality of Materials
Suppliers were asked to evidence that their
proposed materials are in accordance with the
specification. The preferred bidder demonstrated
compliance with these requirements.
Finance and Resources Committee – 30 October 2014
Page 5
Contract not Awarded
before expiry date of
31 October 2014.
This report needed to be signed off week
commencing 13 October 2014 in order to
complete the procurement process and
subsequent contract award prior to the expiry of
the Scotland Excel Framework on 31 October
2014. Therefore the decision to award this
contract was made under the urgency provisions
of the Committee’s Terms of Reference and
Delegated Functions.
6.2
A representative from Road Services will be responsible for contract
management and will monitor contract performance.
6.3
In the event of the supplier failing to meet the requirements specified in the
contract, Road Services will ensure that strict contract management has minimal
effect in regards to business continuity.
Equalities impact
7.1
There is no relationship to the public sector general equality duty to the matters
described in this report and no direct equalities impact arising from this report.
Sustainability impact
8.1
The environmental benefits of LED luminaries are considerable and include a
longer life span, reduced maintenance costs and a significant reduction in carbon
emissions and energy usage.
Consultation and engagement
9.1
Road Services has engaged with Commercial and Procurement Services
throughout this procurement exercise.
9.2
A tendering exercise was undertaken through a Mini-Competition utilising the
Scotland Excel Street Lighting Materials Framework Agreement taking forward
the following Framework evaluation criteria:
9.3
•
70% - Commercial
•
30% - Technical
The criteria used to identify the preferred supplier utilised this ratio in order to
determine the most economically advantageous suppliers by lot.
Finance and Resources Committee – 30 October 2014
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Background reading/external references
10.1
Finance & Resources Committee Report, 10.00am, Thursday, 16 January, 2014
Item Number 7.20 - Street Lighting – Salix Funding.
John Bury
Acting Director for Services for Communities
Contact: John McFarlane, Street Lighting & Workshops Manager
E-mail: john.mcfarlane@edinbrugh.gov.uk | Tel: 0131 458 8037
Links
Coalition pledges
P44 - Prioritise keeping our streets clean and attractive.
Council outcomes
CO18 - Green – we reduce the local environmental impact of
our consumption and production.
CO19 – Attractive Places and Well Maintained. – Edinburgh
remains an attractive city through the development of high
quality buildings and places and the delivery of high standard
and maintenance of infrastructure and public realm.
CO25 – The Council has efficient and effective service that
deliver on objectives.
SO4 - Edinburgh’s communities are safer and have improved
physical and social fabric.
Appendix 1 – Summary of Tendering and Tender Evaluation
Process
Single Outcome
Agreement
Appendices
Finance and Resources Committee – 30 October 2014
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Appendix 1 – Summary of Tendering and Tender Evaluation Processes
Contract
Supply and Delivery of LED Luminaires Ref: CT3121
Contract Period
October 2014 – December 2014 (three months)
Estimated Contract
Value on the Basis of
Purchase Cost Only
£1,689,120
Estimated Savings on
the Basis of Unit Price
Comparison
£1,211,472 (41.76%)
Standing Orders
Observed
2.4 EU Principles applied
2.7 Commercial and Procurement Manager provided
resource to undertake tendering
3.1 Director has responsibility for selecting and appointing
contractors
3.2 Director has responsibility for all Contracts tendered and
let by their Directorate
5.1 Tenders were evaluated on the basis of most
economically advantageous criteria
5.3 Tenders evaluated by a panel with the appropriate
technical knowledge and expertise
EU Procedure Chosen
Mini-Competition utilising Scotland Excel Framework
Invitations to Tender
Issued
Six
Tenders Returned
Six
Tenders Fully Compliant Two
Recommended Supplier
One
Primary Criteria
Most economically advantageous tender to have met the
qualitative and technical specification of the client
department.
Technical Evaluation
Team
•
70% Commercial
•
30% Technical
•
3 Street Lighting Staff within the Transport Division
Finance and Resources Committee – 30 October 2014
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