GUIDE TO BEST PRACTICE
WASTE AND RECYCLING
CONTRACTS FOR THE C&I
SECTOR
Hyder Consulting Pty Ltd
ABN 76 104 485 289
Level 5, 141 Walker Street
Locked Bag 6503
North Sydney NSW 2060
Australia
Tel: +61 2 8907 9000
Fax: +61 2 8907 9001
www.hyderconsulting.com
SUSTAINABILITY VICTORIA
WASTE CONTRACT REVIEW FOR THE
VICTORIAN COMMERCIAL & INDUSTRIAL
SECTOR
Guide to Best Practice Waste and Recycling
Contracts for the C&I Sector
Author
Emma Mountjoy;
Adam Faulkner
Checker
Dominic Schliebs
Approver
Dominic Schliebs
Report No
AA006161-R03-01
Date
31 October 2013
This report has been prepared for Sustainability
Victoria in accordance with the terms and conditions
of appointment for Waste Contract Review for the
Victorian Commercial & Industrial Sector dated 22
July 2013. Hyder Consulting Pty Ltd (ABN 76 104 485
289) cannot accept any responsibility for any use of or
reliance on the contents of this report by any third
party.
Waste Contract Review for the Victorian Commercial & Industrial Sector—Guide to Best Practice Waste and Recycling
Contracts for the C&I Sector
Hyder Consulting Pty Ltd-ABN 76 104 485 289
document1
CONTENTS
1
How to use the Best Practice Guidelines ...................................................................................... 2
2
Background ................................................................................................................................... 4
2.1
3
Glossary ............................................................................................................................................ 5
Best Practice Guideline ................................................................................................................. 7
3.1
Understanding your waste ................................................................................................................. 7
Step 1: Establish baseline data ........................................................................................ 7
Step 2: Identify improvements .......................................................................................... 9
Step 3: Establish waste diversion goals/ targets ............................................................... 9
3.2
Procuring your Waste Service ......................................................................................................... 10
Step 4: Research and Define Your scope ....................................................................... 10
Step 5: Prepare Contract/ Tender documents (optional) ................................................ 16
Step 6: Head to market ................................................................................................... 20
Step 6A: Request Quotes and Negotiate ........................................................................ 20
Step 6B: Request Tenders ............................................................................................. 20
Step 7: Evaluate quotes/ Tenders................................................................................... 21
3.3
Ongoing Contract Management ....................................................................................................... 22
Step 8: Education, training and signage ......................................................................... 22
Step 9: Monitoring and evaluating performance ............................................................. 22
APPENDICES
Appendix A Contract Checklist
Waste Contract Review for the Victorian Commercial & Industrial Sector—Guide to Best Practice Waste and Recycling
Contracts for the C&I Sector
Hyder Consulting Pty Ltd-ABN 76 104 485 289
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Page i
ACKNOWLEDGEMENTS
The authors would like to acknowledge the support and time contribution to the development of
this manual from staff at Sustainability Victoria, key stakeholders and case study contributors
including:
Building Management of 161 Collins Street
TFM Australia
David Jones
Amcor
Austin Health
Australian Tax Office
Australian Packaging Covenant (APC)
Banyule City Council
Citywide Service Solutions
Coles Supermarkets
Fed Square Pty Ltd
KS Environmental
Melbourne Cricket Ground
Metropolitan Waste Management Group
Melbourne Zoo
Packaging Stewardship Forum/ Australian Food and Grocery Council
Queen Victoria Market
Remondis Australia
Royal Melbourne Hospital
Solo Resource Recovery (JJ Richards & Sons)
SKM Recycling
Transpacific Industries Group
Victorian Employers' Chamber of Commerce and Industry (VECCI)
Veolia Environmental Services
Western Health
Woolworths Limited
Disclaimer:
Hyder notes that this guideline is intended to act as a guide only – every business has different
needs, and it is recommended that the items listed in this guideline be adapted accordingly.
Legal advice is recommended before entering into any form of contract.
There is an inherent sensitivity around commercial information such as pricing. This guide in no
way enters into, or infers, information that would constitute a commercial position. Commercially
sensitive information should remain between the business and the waste contractor.
Waste Contract Review for the Victorian Commercial & Industrial Sector—Guide to Best Practice Waste and Recycling
Contracts for the C&I Sector
Hyder Consulting Pty Ltd-ABN 76 104 485 289
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Page 1
1
HOW TO USE THE BEST PRACTICE
GUIDELINES
There is no ‘one size fits all’ solution to procurement of waste and recycling services. But there
is strong potential for those starting out on the path of engaging a waste contractor to learn
lessons from those who have already achieved improvements in efficiency, cost and resource
recovery through best practice contractual arrangements.
This guideline uses plain language and provides a number of examples of how to construct and
better manage your waste contracts. The guideline has been developed to act as a reference
tool for businesses in order to support informed decision making during the procurement of
waste and recycling services, however should not be considered a substitute for legal advice. It
is noted that the guideline addresses only solid waste, for matters relating to the management of
liquid or trade waste it is recommended that businesses contact their local council or water
service provider.
A Contract Checklist is attached in Appendix A, which is referred to throughout the guidelines.
This checklist has been developed as your “one-stop shop” for all matters concerning waste
contracts, and is designed to be referenced to as you work through the steps outlined in this
guideline.
The guideline provides three key focus areas (as shown below) when procuring waste services:

Understanding your waste;

Procuring your waste service; and

Monitoring and evaluating performance.
The flowchart overleaf provides a summary of the steps within these focus areas, which are
further detailed in Section 3 of this document.
Page 2
Guide to Best Practice Waste and Recycling Contracts for the C&I Sector
Hyder Consulting Pty Ltd-ABN 76 104 485 289
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Waste Contract Review for the Victorian Commercial & Industrial Sector—Guide to Best Practice Waste and Recycling
Contracts for the C&I Sector
Hyder Consulting Pty Ltd-ABN 76 104 485 289
document1
Page 3
2
BACKGROUND
Victorian businesses generate more than 4 million tonnes of waste each year. The Commercial
and Industrial (C&I) sector has made some significant progress over the years in improving
recycling rates, reaching 66% in 2010-11. However, a recent review of Victoria’s former Waste
Strategy identified that improvements have recently slowed. There are a number of difficulties
associated with driving resource recovery in the sector including the diversity in size and
composition of business waste, and a lack of understanding regarding the true cost of waste.
Sustainability Victoria (SV), through its new strategic plan Sustainability Victoria Strategic Plan
2012-15 (SV2015), is committed to supporting the C&I industry to improve management and
recovery of waste. SV has identified the need to assist businesses in the procurement of waste
and recycling services by identifying best practice components of contracts with waste
companies. Hyder Consulting was commissioned by SV in July 2013 to produce this Guide to
Best Practice Waste and Recycling Contracts for the C&I Sector.
The main purpose of this manual is to provide practical advice and to act as a guide for
businesses looking to procure best practice waste and recycling contracts. In the context of this
guide, best practice refers to the development and maintenance of contracts that enable waste
and recycling systems and collection services to achieve the best possible waste minimisation
and recovery outcomes.
Best practice waste and recycling contracts can potentially achieve a range of efficiencies and
cost savings including:








Reducing waste costs to your business
Improving workplace environment and amenity
Improving environmental performance
Reducing carbon impact
Reducing exposure to landfill levies and carbon liabilities through better waste
outcomes
Meeting corporate environmental commitments
Enhancing local investment and employment
Meeting community and consumer expectations
The manual has been designed to assist businesses to improve efficiencies, both in resource
recovery and cost, and promote best practice by providing:

a ‘how to’ guide for understanding and assessing waste and recycling data and service
options;

advice on how to understand and prepare waste contracts;

guidance on how to navigate the procurement process; and

advice on developing successful partnerships and managing waste contracts.
This Best Practice Manual addresses each step in the consideration, planning and assessment
of waste service options for business, from understanding your waste stream, investigating
waste service options, through to the procurement process and then ongoing monitoring and
evaluation of contractor performance.
The manual focuses on entering a contract as a partnership rather than simply procuring a
service. Through regular, open communication and cooperation with your waste contractor, vast
improvements can be made in both reducing your business waste and improving business
efficiency.
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Guide to Best Practice Waste and Recycling Contracts for the C&I Sector
Hyder Consulting Pty Ltd-ABN 76 104 485 289
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The manual was developed in consultation with key stakeholders, including representatives
from businesses in priority waste generating business sectors, waste contractors, key industry
bodies and local councils.
2.1
GLOSSARY
Term
Definition
Baler
A machine which compresses material into “bales” which are secured with wire or
similar fastening material.
Best Practice
Best practice represents the current ‘state-of-the-art’ practice and aims to produce
outcomes consistent with the community’s social, economic and environmental
expectations. Continuous improvement is an important component of best practice.
Bulk bin
Refers to a bin for garbage or recyclables with capacity of 1m3 or more, generally
fitted with wheels for manoeuvrability.
Collection point
The location from which garbage and recyclables are collected and transferred from
the storage receptacle to the collection vehicle.
Commingled
recyclables
Dry recyclable materials which are mixed together, such as plastic bottles with glass
and metal containers. Commingled recyclable materials require sorting after collection
before they can be recycled.
Compactor
A container or receptacle for waste or recyclable material which incorporates
mechanical equipment for compaction of the contents.
Contamination
Materials and items within a recycling process that are not readily recycled by that
process.
Diversion rate
The proportion of waste material which is diverted from landfill through recycling, as a
percentage of the combined recycling and garbage quantities – this could also be
considered as a “recycling rate”. Diversion is usually presented as a percentage and
calculated as follows:
Diversion rate = Quantity of material recycled (by weight) / Total quantity of waste
generated (by weight)
Key Performance
Indicator (KPI)
KPIs are a type of performance measurement. When included in waste contracts
these can provide a tool to evaluate and track the performance of your waste
contractor.
Market
A market can be defined as business or trade in a specified commodity; for the
purposes of this guideline the market refers to the providers of waste collection and
management services.
Waste Contract Review for the Victorian Commercial & Industrial Sector—Guide to Best Practice Waste and Recycling
Contracts for the C&I Sector
Hyder Consulting Pty Ltd-ABN 76 104 485 289
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Page 5
Term
Definition
Mobile Garbage
Bin (MGB)
Mobile Garbage Bins are the most common form of waste and recycling receptacle.
Often referred to as wheelie bins, MGBs come in a variety of different designs that
incorporate either two or four wheels, a hinged lid and handles which enable transport
by hand. Wheelie bins are designed to be lifted and emptied by purpose-built
equipment and commonly have a capacity of 120 or 240 litres, however a number of
other sizes are also available.
Principal
For the purposes of this Guideline, the Principal is the party (e.g. business or entity)
which purchases or engages a waste and recycling service.
Recycling
For the purposes of this Guideline, recycling refers to the separation of materials from
the waste stream for the purposes of resource recovery, including separated
recyclables, commingled dry recyclables and organics. This term is used
interchangeably in this Guideline to imply source separation of materials.
Source-separation Physical separation of a waste stream into its recyclable components at the point of
generation (i.e. the source).
Acronyms
Acronym
Definition
C&I
Commercial & Industrial
KPI
Key Performance Indicator
MGB
Mobile Garbage Bin
OH&S
Occupational Health and Safety
RFQ
Request for Quotation
RFT
Request for Tender
How many bins do you have?
How many are full?
How many do you really need?
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Guide to Best Practice Waste and Recycling Contracts for the C&I Sector
Hyder Consulting Pty Ltd-ABN 76 104 485 289
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3
BEST PRACTICE GUIDELINE
3.1
UNDERSTANDING YOUR WASTE
Before developing a contract or engaging a waste
contractor, you need to understand the waste you are
dealing with. Only once you have established how
much, and what type of waste you produce, you can
work out the best plan to manage it.
Therefore, the first step towards procuring a waste and
recycling service that is most suited to your needs is
understanding your current waste and recycling outputs.
Establishing solid data at the outset can save a lot of money in the long run, as it will give both
your business and potential contractors a firm basis on which to estimate costs over the length
of your contract. Knowing your business’ waste stream, and which products you want to recycle
will be of great assistance when you head to market
for your waste and recycling services.
The information can also be used to calculate
potential benefits and cost-effectiveness of any
recycling programs under consideration.
Uncertainty = risk = price
Also, it is important to appoint an appropriate person, or persons, within your business to take
on responsibility for managing waste. Ideally this should be someone that has an understanding
of the waste produced by your business, with an appropriate amount of time and resources to
invest managing waste-related matters for your business. In some cases, there may be a
number of people within your organisation who make decisions affecting waste generation and
management and it may be beneficial to gather those people together to work collaboratively on
solutions and baseline data.
There are three main stages to understanding your waste, which are detailed in the following
pages:

Step 1: Establish baseline data;

Step 2: Review and improve; and

Step 3: Establish waste diversion goals/ targets.
STEP 1: ESTABLISH BASELINE DATA
To understand the waste your business is generating, it is important to assess the following:
How
much do
you
waste?

Current waste costs

Overall quantities of waste and recycling

The composition of your business’ waste and recycling (i.e. what materials end up in your
bins)
You may already receive much of this data from your current waste contractor. Dig out your
waste invoices for the past 6 to 12 months and work out the following:

Total waste sent to landfill (by weight or volume)

Total material recycled (by weight or volume), by material type
Waste Contract Review for the Victorian Commercial & Industrial Sector—Guide to Best Practice Waste and Recycling
Contracts for the C&I Sector
Hyder Consulting Pty Ltd-ABN 76 104 485 289
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Page 7

Cost of waste disposal, cost of recycling
The number of materials currently recycled will depend on the systems currently in place at your
business. The most common materials recycled by businesses are paper/ cardboard and
comingled recyclables (this will generally comprise plastics, metals, glass and paper products,
however may vary depending on your current contractor).
What’s in your bins?
In order to better understand your waste and to identify opportunities for improvement, it may be
necessary to conduct a waste audit or assessment. Assessing your waste will provide you with
a breakdown of the amounts and types of materials being sent to landfill, and how much could
be recovered for recycling or composting. It can also help you identify inefficiencies in your
current service, for instance, bins being collected half-full, contamination of recyclables and
unnecessary or excessive bins, all of which could be costing your business unnecessarily.
A waste audit involves collecting samples from your waste and recycling bins over period of
time and separating and weighing the various components of the samples. An audit conducted
by a consultant qualified in waste auditing will provide the most detailed and accurate data,
however this will be an additional expense to your business which should be weighed against
the potential benefits it can bring. A current or potential waste contractor may also be able to
provide the service. If you are in the process of seeking out a new contract, a contractor may
even provide the service free of charge.
A detailed compositional audit can be costly and, in many cases, may not be feasible or
necessary. However, there a number of simple methods which can be easily carried out by a
staff member, which can be more than sufficient to understand your business’ waste stream. A
desktop audit, or a visual assessment will provide indicative data to help you estimate both how
much and what type of waste is produced. Sustainability Victoria have published Assessing your
waste – guidelines, a factsheet describing these three methods for understanding business
waste. NSW EPA have also provided some guidance via their Bin Trim tool. The Waste Wise
Melbourne Network, also provides assistance to business looking to better manage their waste,
and offers the opportunity to attain a Waste Wise certification through the Waste Wise program.
The average mix of waste sent to landfill by the commercial & industrial (C&I) sector in Australia
is illustrated below. The percentages listed represent what might be found in an ‘average’
commercial garbage bin and indicate that a large proportion of the commercial waste stream is
recyclable, with 15.5% paper and cardboard and 37.5% inert materials (which includes
concrete, metal, plastic and glass). Even if you have a recycling system in place, conducting a
waste audit may reveal that a surprising amount of your waste
is recyclable.
The key data to gather at this stage (at a minimum) is:
Page 8

Baseline waste and recycling quantities (in tonnes or
volume)

Estimation of material types in your current waste
streams (quantities of waste/ recycling, in tonnes or
volume, by material type)

Baseline diversion rates (total recycling / (total recycling
+ total waste) %)

Baseline waste and recycling systems i.e. number of
bins, skips, compactors, balers

Baseline waste costs for waste and recycling services
Figure 1
Average proportions of
different materials in C&I waste sent
to landfill (National Waste report,
2010)
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STEP 2: IDENTIFY IMPROVEMENTS
Procuring a waste service presents an opportunity to review your current waste systems, and
identify improvements which could be incorporated into your new service. You may have
already uncovered areas for improvement while gathering your baseline data in Step 1. As you
review your baseline data and current contracts, ask yourself the following:

Are there any opportunities to minimise waste and increase recycling?

What are the stand-out materials in the waste bin which are recyclable?

How could our contractor improve performance?

What additional services could our waste contractor provide?
The answers to these questions will guide you in what to look for when researching new waste
services, and developing or reviewing your future waste contract.
STEP 3: ESTABLISH WASTE DIVERSION GOALS/
TARGETS
Setting firm targets for your business to reduce waste and improve recycling is an important
step, as this will give both yourself and potential contractors something to aim for. Make sure
your targets consider the waste hierarchy (your priority should be to reduce, reuse THEN
recycle). Key targets to consider include:

A reduction in the total amount of waste generated (note that the total waste generated
includes both the total waste sent to landfill and total material recycled), and

Improving/ maximising the amount of material recycled (as a proportion of waste
generated).
Consider working with your current and/ or potential waste contractor to establish realistic
targets. By engaging them in the process this will assist in securing their “buy-in” and may
improve success rates. Writing the targets into your contract and KPIs (where appropriate) will
further enhance your chances of success (refer to the following section 3.2 Procuring your
waste service).
Ensure that your targets are SMART:

Specific (be clear about what you want to achieve)

Measurable (use units which can be measured/
tracked e.g. tonnes of waste)

Achievable (use your baseline data to estimate what
might be achieved)

Realistic (use your waste data to estimate how much
of your waste is recyclable); and

Timely (state when you want to achieve your target).
There is no standard target for waste minimisation and
resource recovery. Waste generation is closely linked to
production and efficiency, so your targets should be
developed based on your business’ baseline data (collected
in Step 1), the proportion of recyclable material, and which
materials can realistically be recovered.
Figure 2
The Waste Hierarchy
Waste Contract Review for the Victorian Commercial & Industrial Sector—Guide to Best Practice Waste and Recycling
Contracts for the C&I Sector
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Page 9
3.2
PROCURING YOUR WASTE SERVICE
Now that you have established your baseline waste data and costs and established some goals/
targets, the next step is to procure a waste service. There are four main stages in procuring a
waste service, which are detailed in the following pages:

Step 4: Research and define your scope;

Step 5: Develop contracts/ tender documents (optional);

Step 6: Head to market;


Step 6A: Request quotes and negotiate; or

Step 6B: Request a tender; and
Step 7: Evaluate quotes/ tenders and sign your contract.
STEP 4: RESEARCH AND DEFINE YOUR SCOPE
Unlike other utilities, such as electricity and water, there are no set or regulated charges for
waste. This can make it very difficult to compare the various services on offer. Before you jump
into the procurement process, there are a number of things you will need to know and
understand about waste and recycling services which can have an impact on the performance
and cost of your service. It is well worth investing some time at this stage in researching your
available options.
The following pages outline the common aspects of waste and recycling services which are
important to know and consider, prior to entering any form of agreement. Understanding these
aspects will assist in defining the scope of your desired service and the level of services you
want.
Contract Checklist
While assessing your waste service options (outlined below) and
defining your preferred service level, it will be useful to understand
some of the factors which can affect your waste and recycling rates and
the associated costs and charges. A summary of the key elements to
consider and how each aspect may impact your waste performance and
costs is provided in Appendix A: Contract Checklist.
It will be worth discussing these points with potential waste contractors
when you head to market in Step 6, and considering the associated
contract clauses and their implications carefully when you evaluate
quotes/ tenders and review contracts in Step 7.
Reducing your costs through waste recovery
In some cases, there may be a financial advantage to separating some materials for recycling,
due to the market and price for that material. Clean materials that have been separated into a
single material type will attract the best price for a recycling contractor. This can have a great
impact on your waste costs, while also promoting your business as having recycling credentials.
While recycling and resource recovery has become quite mainstream in contemporary business
practices, it still pays, both economically and in reputation, to reduce the amount of waste being
sent to landfill by promoting and advertising your achievements in recycling. In some cases, a
contractor may be able to offer you a cost neutral service, or even pay you for the material.
In terms of which materials are generally the most valuable, this will depend on which services
are available in your area; the costs to collect, transport and process the material; and the level
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of competition amongst contractors. In terms of net commodity value, the following list provides
an indication of the most valuable recyclable materials in order of highest value to lowest 1,
although market values will vary with time and at different locations. This list may help you to
prioritise materials for source-separation and guide you when assessing which materials to
highlight in your quotation or tender documents.
0F
1
Aluminium
2
Hard plastics (e.g. PET, plastic bottles)
3
Steel
4
Cardboard
5
Cardboard/paper combination (the higher the cardboard content, the higher the value)
6
Paper
7
Glass
8
Soft plastics (e.g. shrink wrap)
For some materials, your business will likely need to have a reasonable volume of the source
separated materials in order to make it viable for a contractor to sign up to a contract to collect
the material. This will vary between waste contractors and depending on local circumstances so
your contractors will be able to advise on the volumes required for a service to be viable. If your
business does not produce enough volume of the materials there may be opportunities to
combine your volume with neighbouring businesses to provide economies of scale and/or
efficiencies.
Regarding other common business waste streams the following list demonstrates those
materials which are generally more expensive for businesses to have removed. The following
waste and recycling streams are presented in order of their typical cost per unit to manage
(highest to lowest), although this will vary depending on local availability of services. This list
may assist your business in seeking competitive prices for those streams that present the
highest cost to your business;
1
Hazardous waste 2
2
Clinical/ medical waste2
3
Problem wastes (batteries, electronic wastes) 2
4
General mixed waste
5
Organics
6
Comingled recycling 3
7
Source separated recyclables (as per previous list)
1F
2F
1
Based on information supplied by a representative of the resource recovery industry.
2
Commonly the hazardous, clinical, and problem waste streams are the most expensive of the waste streams per unit or per bin lift,
however in a contracting sense, the volumes are generally small compared to the other waste and recycling streams. The highest cost
in a waste and recycling contract is usually the general mixed waste stream, so it is important that the business receives a competitive
price in the contract, and focusses on reducing this waste output. Some of these waste materials are now covered by the Federal
Government Product Stewardship Scheme which may reduce the cost of these materials to contractors.
3
It is not uncommon for a comingled recycling service to cost as much, or more, than a general mixed waste stream, so it is important
that the business seeks and receives a competitive price in the contract.
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Page 11
Collection Frequency
When it comes to collections, there are two main types of services offered:

Scheduled service: a regular collection frequency is maintained over the contract, e.g.
weekly or fortnightly.

At-call service: collections are “ad-hoc”, typically waste bins/ compactors are monitored
by an employee and pick-ups arranged once bin capacity is close to being exhausted.
Scheduled and at-call services can offer both advantages and disadvantages, as summarised in
the table below. Ultimately the choice of service will depend on your individual situation, and
may depend on how much time your business is able to invest in monitoring your bin use.
Type of Service
Potential Advantages
Potential Disadvantages
Scheduled service

More cost-effective in terms
of price per pick up

Greater potential to pay for
unnecessary pick ups

Less time investment
required

Bins may be picked up when not full

Potential for higher overall costs

Offers less flexibility

Less cost effective in terms of price per
pick up

Greater time investment – monitoring
and scheduling services

Bins may be missed due to the
contractor not having capacity or
availability at short notice

Increased administration costs
At-call service

Offers greater flexibility

Can assist businesses whose
waste and recycling outputs
fluctuate with seasons or
events

Bins are only emptied once
full – potential to maximise
value of service

Depending on how service is
managed, overall costs may
be lower
Bins and Waste Collection Equipment
Waste contractors offer a range of bins and waste collection equipment, and will generally offer
advice on the system which is most suited to your business. The table below provides a
summary of the main features of each system, common sizes, collection frequencies, site
requirements and pricing structures.
You may be surprised by how much the bin size can affect a business’ waste performance and
costs. Take the time to consider all available options - choosing the right bin can not only reduce
the amount of waste produced, it could also reduce costs considerably. Some companies have
been able to reduce costs by 10-15% by implementing a more appropriate bin size (refer to
Case study: David Jones).
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Table 1
Bins and Waste equipment: Summary of common features, site requirements and charging methods
Item
Mobile garbage bins
(MGBs)
Front-loading bins/ Skip bins
Hooklift/ Roll On/ Roll Off (
(RORO)
Balers
Compactors
Description
Most commonly called
“wheelie bins”
Commonly known as “skip bins”
Bulk bins are a larger version of
a “skip bin”
Balers are provided to
consolidate cardboard or
plastics
A compactor can be provided to
enable compaction of the waste
on-site
Features

For managing
smaller volumes of
waste

For managing medium to
large volumes of waste.


Use a lift on/lift off system.
For managing large
volumes of cardboard or
plastics


For managing large volumes
of waste which is not
suitable for compaction.
For managing large
volumes of waste, suitable
for compaction.

Bins are lightweight
and mobile, can be
easily moved for
ease of access and
collection.

Some bins are mobile, some
are not and must be
mechanically moved.

Offer larger openings for
ease of depositing waste,
option of walk in doors for
depositing fragile waste (e.g.
e-waste).

Require manual loading of
contents prior to engaging a
compacting cycle

Can replace the need for
multiple bins


Balers can be hired or
purchased
Generally reduces the
frequency and cost of
collection.
Bins are not mobile, must be
mechanically moved.

Balers are not mobile

Compactors are not mobile,
must be mechanically
moved.

General Bin Size/
Range of bin sizes
Wide range of bin sizes
– most commonly used
are 140L, 240L, 660L
and 1,100L
General collection
frequency


Wide range of bin sizes –
commonly from 1.5 m3 to 6 m3
Commonly used in

a regular, scheduled
collection.
Highest frequency
collection.
Generally range from 10 m3 to
30 m3
Commonly used for larger

waste generating businesses

Commonly an “at-call”
service.
Commonly used for one-off
waste generating events
(e.g. renovations, office
clean-ups).
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Balers vary in size depending
on the amount of cardboard or
plastic requiring baling
Compactors generally range
from 19 m3 to 30 m3


Commonly an “at-call”
service.

Enables lower frequency of
collection.
Bales of cardboard or
plastic can be stored
conveniently and neatly
ready for collection.
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Item
Mobile garbage bins
(MGBs)
Front-loading bins/ Skip bins
Hooklift/ Roll On/ Roll Off (
(RORO)
Balers
Compactors
Site requirements

Space for bin
storage is required
(generally less
space than other
options).

Moderate to large storage
space required.

Bins stored on-site - requires
significant storage space.



Bins are mostly collected
using a front-lift truck, so
access must be considered.


Bins are collected
using a rear- or
side-lift truck.

Bins are collected using a
hooklift system (a
mechanical lifting
mechanism mounted to a
truck).
A baler will occupy a
reasonably large storage
space.
Storage space will be
required for the baled
materials prior to collection.
Compactor is stored on-site
– requires significant
storage space, but can
reduce bin space compared
with un-compacted bulk
bins.

Some training may be
required.

Some training may be
required.


Charging
Rear-lift systems
may be required
where height or
access is restricted.
Commonly charged per
bin lift or by volume
Bins are now commonly
manufactured with plastic
bodies and lids which has
minimised weight and
improved accessibility, and
manoeuvrability.
Commonly charged per bin lift
or by volume
Commonly charged per bin lift
or by volume
A site charge may also be
applied
Page 14
Commonly charged by volume
(number of bales)
A hire or site charge may be
applied
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Generally charged by weight
A hire or site charge may
also be applied
Cleaning and waste services – can the two get along?
Usually the contracts for these services are separate (held in parallel), however there are a
number of synergies between cleaning and waste services, and the success of either service
may be considered dependent on the other. In some cases, it may be worth considering
engaging a waste service through your cleaning contractor. In this situation, the contracts would
be held in series, i.e. the Principal may hold a contract with a cleaning contractor, which holds
and manages a separate waste contract on behalf of the Principal. Before entering into such an
agreement, it is important to consider which situation would be more appropriate for your
business. A summary of the potential advantages and disadvantages is provided in the table
below. Refer also to Case Study: 161 Collins.
Cleaning contract and waste
contracts are separate
Waste contract is hosted by
cleaning contractor
Advantages
Disadvantages

Specialist cleaning firms and
waste collection firms remain
demarcated

Additional time required to
educate cleaners on waste
management systems

Full control is maintained over
both contracts

Cleaners may be resistant to
chosen waste systems – due to
additional time involved

Cleaners have a more vested
interest in ensuring the
recycling works

Loss of direct contact, and
direct control over the waste
collection contractor

A single point of call for
contract queries

Can impede making any
changes to waste management
systems
Waste contractors may also provide a cleaning service, in which case only one contract may be
required for the two services.
Waste Brokers
An emerging option in the waste market, businesses can now engage a waste broker to
negotiate waste and recycling services on their behalf. A broker can either host the contracts
themselves, or the business can host the contracts while the broker can handle the procurement
and administration of the contracts.
In simple terms waste brokers will go to market on behalf of a business and, using their network
of preferred suppliers and industry knowledge, present a business with attractive rates and
outcomes. A waste broker may go to market based solely on value (price) or tailor the outcome
to deliver on a business’ preferred performance indicators such as recycling rates, customer
service, and service reliability. It would be prudent to ensure that the waste broker only uses
experienced waste contractors, and request receipts or evidence that the waste and recycling is
going to appropriately licenced premises.
Waste brokers may offer an opportunity to achieve value for money contracts that deliver on
environmental and performance metrics, and may be an attractive option for businesses that
lack the knowledge, time or resources required to understand individual requirements.
Define your Scope
Having considered all options available (and considering your baseline data and goals/ targets
established in Section 3.1), you should be ready to define the scope of your waste and recycling
service. This involves determining your desired service level in terms of the following:

Which materials you wish to recycle;
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
Collection frequency (scheduled or at-call); and

Bins/ waste equipment required.
Decide on your approach to market
Once you have defined the scope of your desired waste and recycling service, you will be ready
to head to market. There are two main methods of procuring a waste and recycling service,
which follow slightly different pathways in this document. Refer to the flowchart in Section 1, and
the descriptions provided below, to determine the steps to follow from here:

Method 1: Request Quotes and Negotiate. Best suited to: Smaller businesses that
may generate less waste and recycling, or businesses with simpler needs, may wish to
adopt a less formal procurement process (e.g. seek quotes by approaching potential
contractors directly). In this case, go straight to Section 3.2.4 Step 6B: Request Quotes
and Negotiate.

Method 2: Prepare Company-specific Contract/ Tender documents. Best suited to:
Larger businesses or organisations that generate more waste and recycling, or
organisations which have more complex waste management needs may wish to develop
their own tender documents, and enter into a formal competitive tender process. In this
case, go on to Section 3.2.2 Step 5: Prepare Contract/ Tender documents and 3.2.5
Step 6B: Request Tenders.
STEP 5: PREPARE CONTRACT/ TENDER DOCUMENTS
(OPTIONAL)
You should now be ready to develop your tender documents, commonly referred to as a
Request for Tender (RFT) or Request for Quotation (RFQ). For the purposes of this guideline,
hereafter the documents will be referred to as a RFQ.
The RFQ is the formal instrument which will allows you to communicate with potential
contractors. This communication is a two way street: it allows you to communicate your needs,
and also allows tenderers to advise on how they can improve your system.
So that tenderers are best equipped to prepare a tender response, ensure that your RFQ
contains all the information relevant to your waste and recycling. Remember: solid data and a
well-defined scope at this point will help you avoid any “price creep” over your contract, which
may arise if potential contractors are provided with unreliable data and a loose specification.
The Contract Checklist provided in Appendix A has been developed as a comprehensive
summary of the key elements to consider while developing your RFQ and associated contracts.
It is designed to assist you to prepare an accurate document and specification ready to seek
submissions in Step 6B Request Tenders.
Ensure that your RFQ communicates clearly and concisely not only your preferred service
levels, but also what you expect in terms of results. This could include the goals and targets
determined in Step 3. Ensure that you build in some flexibility in the documents by encouraging
tenderers to offer innovation and alternative solutions.
Key Performance Indicators
Developing a set of robust key performance indicators (KPIs) for inclusion in your contracts is
highly recommended, as this will not only assist you to improve performance over the contract,
but also provides a tool to measure contractor performance. KPIs can be either based on
incentives or penalties.
Ensure that your KPIs are:
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
Measurable;

Easy to understand;

Achievable (realistic); and

Easy to manage.
The table below provides a summary of example KPIs which are worth considering for inclusion
in your waste contract. The number of KPIs you include will depend on what you want to
achieve and the amount of time you can invest in managing this aspect of your contract.
Table 2
Summary of example KPIs
Criteria
KPI
Example target
Example Penalty/
Incentive
Regulatory compliance
No formal infringement or
penalties associated with
any relevant environmental
or safety regulation, by-law
etc.
Zero incidents or
infringements
No incentive for meeting
the KPI, but a 25%
reduction on contractor
payments for each
infringement
Verification of tonnages
Provision of accurate and
comprehensive information
on waste and recycling
performance and
destination
A summary of total
waste to landfill, and
total material recycled
itemised each month
on invoice
No incentive for meeting
the KPI, but a 5%
reduction in contractor
payments for failure to
meet the KPI
Waste reduction/
diversion
Maximisation of recycling
and diversion of waste
from landfill
A minimum of 60% of
all waste produced by
the business is to be
recycled
An incentive can be
offered (e.g. up to 5%
additional payments) for
each additional 5%
increase in landfill
diversion above 60%,
but a 10% penalty (in
reduction in payment)
on each monthly invoice
where the target is not
achieved
Communication
The Contractor will be
required to meet with a
company representative
1 site meeting per
month
No incentive for meeting
the KPI, but a 5%
reduction in contractor
payments for failure to
meet the KPI
The contractor has a 24
hour customer service
phone line available
Customer service
phone line is available
100% of the time
No incentive for meeting
the target, but a 5%
reduction in contractor
payments for failure to
meet the KPI
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Page 17
Criteria
KPI
Example target
Quality and service
delivery
Equipment to be in working Maximum 48 hour
condition at all times
response to any
equipment failure and
alternative equipment /
services to be
implemented at no
extra cost to the
Principal
No incentive for meeting
the KPI, but a 5%
reduction in contractor
payments for failure to
meet the KPI or
reimbursement of costs
incurred by the Principal
All equipment supplied
by the Contractor must
be in operational
condition and of good
appearance, or
replaced as reported
by the Principal’s
representative
No incentive for meeting
the KPI, but a 5%
reduction in contractor
payments for failure to
meet the KPI
Zero missed services
each calendar month*
No incentive for meeting
the KPI, but 5%
reduction in contractor
payments for each
missed service per
calendar month
100% of at-call pickups
within 48 hours,
subject to exclusion of
public holidays
No incentive for meeting
the KPI, but a 5%
reduction in contractor
payments for failure to
meet the KPI
Missed services
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Example Penalty/
Incentive
Reporting
Accuracy of reporting
100% of reports must
be accurate and
compliant
No incentive for meeting
the KPI, but a 5%
reduction in contractor
payments for failure to
meet the KPI
Invoicing
Accuracy of invoicing
100% of invoices must
be accurate and
compliant
No incentive for meeting
the KPI, but a 5%
reduction in contractor
payments for failure to
meet the KPI
The invoice clearly
details the cost per unit
of waste collected and
itemises each other
charge separately
No incentive for meeting
the KPI, but a 5%
reduction in contractor
payments for failure to
meet the KPI
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Note:
*A missed service will not be deemed a missed service if the Contractor returns to empty the bin within 24 hours
of being notified by the business.
You may wish to include KPIs in your quotation or tender document, as this will provide the
contractor with an indication of the desired performance measures and level of service. All
contractors that are providing your business a price or tender submission can then include
efforts to conform with the KPI’s in their respective prices.
However, in some circumstances (for instance if businesses are not experienced or confident in
setting and managing KPIs), it may be advisable to develop the KPIs with the contractor,
following award of the contract. This will help to develop the relationship with your contractor, by
engaging them in the process you will hopefully secure greater ‘buy-in’ and enhance your
chance of success.
Regular review of contractor performance is critical to effectively managing the KPI process.
Please refer to Section 3.3.2 of this guideline.
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STEP 6: HEAD TO MARKET
Identify potential contractors
After following steps 1 through 5 of this guideline your business should be in a position to
contact your existing waste contractor, and a range of other potential contractors, to discuss
your current waste service and whether any additional services can be offered. In most cases
contractors will offer to visit you in person to discuss your needs and what they can offer your
business. Remember not to think of potential waste contractors simply as a service provider,
rather as a potential business partner that can assist your business to achieve better outcomes
for your waste management and ultimately, the efficiency of your business.
Planet Ark’s Business Recycling website provides a useful tool to assist in identifying waste
service providers in your region. The tool enables a business to seek out waste contractors that
offer desired services – when selecting the materials you wish to recycle, a range of options are
presented, including drop-off and collections services. Your local council may offer waste and/or
recycling services to small to medium businesses in your area, and it may be worth checking
and comparing the cost to other waste services available.
There are a number of large national waste companies which may spring to mind first, however
be mindful not to ignore the smaller operators. You may find a competitive option with a smaller,
local operator. Consider the following sources to identify prospective contractors:

Your current contractor

Recommendations from other companies in your area

Your local council
STEP 6A: REQUEST QUOTES AND NEGOTIATE
Depending on your situation, it may not be viable or necessary to prepare your own contract. In
this case it may be easiest to adopt a less formal tendering process for your waste service, and
approach waste contractors directly for advice and quotes.
Avoid the
“price creep”
During this process, refer to the Contract Checklist to ensure you understand what it is you are
seeking. Use your power as a purchaser, and seek quotes from a number of potential
contractors for comparison. Many contractors will visit your business in person and provide
advice on what services may be required.
So that contractors are best equipped to provide you with an accurate estimation of costs,
ensure that you provide them with all the information relevant to your waste and recycling, i.e.
the baseline data gathered in Step 1.
Remember: solid data and a well-defined scope at this point will help you avoid any “price
creep” over your contract, which may arise if potential contractors are provided with unreliable
data and a loose scope.
Waste contractors will have a standard set of terms and conditions, which you will have the
opportunity to review and negotiate. Refer to the Contract Checklist to help you understand
the information contained in the contract, and identify any terms you wish to negotiate.
STEP 6B: REQUEST TENDERS
You will now be ready to issue the RFQ to the market. To ensure that you maintain a level
playing field for all potential contractors it is recommended that you:
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
Allow sufficient time for tenderers to prepare their response and provide the information
you have requested.

Consider providing a site inspection/ site tour for prospective tenderers.

Provide all questions, together with your response, amendments, and/or addenda to all
contractors that have received the RFQ.

Acknowledge receipt of all received tenders.
STEP 7: EVALUATE QUOTES/ TENDERS
Quotes and tenders should be evaluated on your nominated criteria. For transparency, ensure
that your evaluation criteria, and their weightings are specified in your tender documents (if you
are following a less formal process, let potential contractors know what your priorities are).
Some examples of key criteria include:

Relevant experience

Demonstrated knowledge in similar work

Performance

Technical skills

Resources (i.e. equipment, consultants, subcontractors and staff available for the
contract)

Innovation

Financial benefit (price)

Quality

Environmental management/ sustainability
Remember that your evaluation should not focus exclusively on the lowest-priced tender, but
rather identify the best-qualified contractors who provide the best value service and
performance. Generally, the best value quote/ tender will be that which offers the most complete
service at the least cost. Look out for a contractor that can provide the best value service with
the most value-adds.
Negotiating a better deal
Once you have selected your preferred contractor, you will be ready to enter final negotiations
and eventually sign a contract.
Contract negotiation does not need to be a hostile exercise. In order to secure the best possible
deal, ensure that you:

Seek legal advice

Prepare well and are informed of your rights

Be professional at all times

Write down any items discussed and seek confirmation/ agreement from the other party
Finally, once you have reached an agreement, ensure it is written in the contract.
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3.3
ONGOING CONTRACT MANAGEMENT
Even the most successful waste contract cannot manage itself. Your contract may be best
practice at the outset, but your service will not necessarily continue to run smoothly over the life
of the contract, unless it is monitored and maintained.
There are two main steps in managing your contract, which are detailed in the following pages:

Step 8: Education, training and signage

Step 9: Monitoring and evaluating contractor performance
STEP 8: EDUCATION, TRAINING AND SIGNAGE
Education and training of your staff and cleaners should be regular and ongoing to ensure the
continued success of your waste service. Staff and cleaners will change from time to time, and
participation may also decrease over time as staff lose interest/ enthusiasm, so it is important to
regularly communicate and update staff on system requirements. Communicating progress
against goals and targets will also help to keep staff engaged.
A new waste service may incorporate new bins and equipment, and an important aspect to any
waste system is the signage. This is the most prominent and ongoing education tool you will
provide for your staff, and is critical to the success of your waste service. Signage should be
colour-coded and conform to Australian Standards (AS4123.7-2006, Part 7: Colours, markings
and designation requirements relating to bin lids and colours, available at the Standards
Australia website), this will limit confusion and minimise contamination of recyclables.
In some situations, it may be necessary to develop company-specific waste and recycling
signage – for instance where waste systems are particularly complex, such as in a hospital..
You may wish to incorporate pictures of specific waste items, to guide staff on the proper use of
the system. Where possible, this signage should be developed to meet relevant Australian
standards.
You may wish to request that your contractor provides education, training and signage as part of
your waste contract. Be clear what it is you require from the contractor, or alternatively provide
the training, education and signage yourself.
STEP 9: MONITORING AND EVALUATING
PERFORMANCE
Do not set
& forget
To ensure your new service provides the results you set out to achieve, you will need to monitor
and evaluate performance over the length of the contract.
To ensure the success of your program it is recommended that you:
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
Check invoices closely

Regularly monitor performance against KPIs where relevant (also in accordance with the
regular review schedule which may be included in your contract)

Communicate regularly with your contractor (if you included monthly meetings in your
contract, ensure you hold them)

Know your waste outputs and monitor bin presentations closely (see overleaf)

Identify any problems in waste systems, and work closely with your contractor to rectify
them
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
Keep the contractor accountable
If you have an Automatic Renewal/ Rollover clause in your contract, make sure you set up a
reminder (in your calendar) to ensure that you are able to take the opportunity to test the market
again and potentially negotiate a better deal (with your current or other contractors).
Reporting & Data Management
The provision of reliable waste data is crucial to the ongoing management of your contract. The
waste data should be used to monitor the amount of waste generated by your business, waste
diverted (recycled) and the cost of your service. The data can also be used to report on any
goals and targets you have set, which you may choose to report on publicly.
Reporting and data requirements should be set out in your contract (refer to Appendix A:
Contract Checklist). Regularly check the data that your contractor provides to ensure that you
are getting what you asked for. If you identify any anomalies, flag them and discuss them with
your contractor.
Develop a database including your baseline data, and update it regularly as you receive data
from your contractor. Ensure that the database is simple and easy to update – it will be easiest if
the format is consistent with the data you receive from your contractor. Monitor and track your
progress against targets and KPIs, and observe any trends. Monitoring and tracking your waste
quantities and costs is crucial to help you gauge the success of your service. It is well worth
promoting the efforts of both your contractor and your staff, by reporting on your performance,
both internally and externally, as appropriate. By recognising and acknowledging achievements
and improvements, particularly against any targets which your business has set, this can help to
maintain awareness and proper use of waste systems, and assist to steadily improve
performance.
It is strongly recommended that you also monitor and manage your bin presentations closely.
Maintain a set of in-house data and record the number, size, type and capacity (whether full, or
half full, for example) of bins for each waste stream that are presented for pick up. This will not
only ensure that waste is being managed properly and appropriately by staff, it can also provide
a cross-check with the data provided by your waste contractor.
Regular Performance reviews
There should be a regular performance review built into your contract (refer to Appendix A:
Contract Checklist). A meeting should be held between your contract manager and your waste
contractor’s representative. The purpose of the meeting is to:

monitor performance of the contract – against KPIs where relevant;

where KPIs/ expectations have not been met, discuss and agree actions to resolve this;

resolve any other issues which may have arisen over the performance period; and

consider any improvements which could be made to your service.
Remember, the performance of your waste contractor is only half of the picture - the other half is
dependent on your business. The success of your waste and recycling program is dependent
on effective management from your side, timely feedback where issues arise, and appropriate
support where necessary for the contractor.
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APPENDIX A
CONTRACT CHECKLIST
.
Item
Why is this important?
Tips for maximising performance and cost efficiencies
Provision of
service
The scope of the service required, should be as clearly defined as possible. Include
bin sizes (waste and recycling), approximate number of bins, other infrastructure
requirements (such as locks for bins), frequency of collection and service level and
fees associated with each. If developing your own contract, it may be advisable to list
this information in a Schedule (see below). You may also like to include a short
description of your business, any specific data you have on the amount of waste and
recycling to be managed, and any specific site constraints or issues that the
contractor will have to keep in mind.

Include accurate baseline data (gathered in Step 1 of this guide), in your
request for quotes/ tenders as this will ensure you are provided with an
accurate estimation of costs.
Schedule/
Pricing
component
The Schedule contains information to be supplied by the contractor. How you

present the required information in the Schedule will dictate how potential contractors 
provide information to you, so it is advisable to be as specific as possible. Being

clear on the information you require will ensure that all tenderers provide costing in
the same units.

A well-defined schedule will ensure that you are able to easily compare costs
provided by tenderers, which will assist the evaluation process, and will also ensure
that all tenderers are on a “level playing field”.
Be as specific as possible in the information you request from contractors.
Additional fees
Recycling
services
available
When your business seeks to engage a contractor it is not a simple as receiving a
flat price for the contractor to provide the service. Often there are other cost
pressures that will need to be accommodated in the price such as:

Adjustments for CPI

Adjustments for an increase in government costs such as the Waste Levy or
Carbon liabilities
Not all waste contractors offer the “full suite” of recycling services. This may be due
to the facility that your contractor sends materials for reprocessing, which may not
accept some materials.
Stipulate how you wish to be charged (i.e. per lift, per tonne, per annum).
Specifically detail if the price is to include or exclude additional charges such
as detailed below
You may wish to provide an Excel spreadsheet or Word document template
with your tender documents to ensure tenderers submit information in a
consistent format.

Ensure that the specification you provide when seeking to engage a
contractor clearly stipulates whether the price per lift or per volume includes
all associated costs, and how you require the contractor to deal with
adjustments

It will generally be most cost effective if you can bundle your services under
the one contractor, so ensure that your chosen contractor covers the range of
recycling services your business needs.
A waste contractor should be able to advise what materials they can accept. It is

important to ensure from the outset that any potential contractors are able to offer the
services your business needs.
If your contractor cannot offer the service ensure your contract allows you to
offer that material to an alternative contractor (see exclusivity below).
Item
Density
(Volume vs.
weight)
Bins and other
equipment
Why is this important?
Tips for maximising performance and cost efficiencies
As summarised in Step 4, waste collection is most commonly charged by bin volume
or by bin lift. This means that your waste will be charged a fixed rate each time the
collection truck empties the bin, regardless of how full it is. The bin lift cost will be
estimated by your contractor based on the expected cost of transport and disposal of
the waste (or processing of the recyclables).

It is important to understand how you are charged and to monitor how full bins
are when emptied, to ensure that you don’t end up “paying for air” – partially
full bins

If your waste has a tendency to fluctuate, consider an at-call service. This will
minimise the potential for paying for unnecessary bin lifts.
Charging by bin lift is common, because most contractors do not have the capability
to accurately weigh bins on pick up. While waste deposited to landfill is charged by
weight, the waste from your business will be mixed with other waste picked up on a
collection run, and there is no way to determine the accurate weight of your
business’ waste. The exception to this is when waste is collected in a larger
receptacle, such as a compactor, or a bulk bin, as these will be picked up a
dedicated truck, and can be weighed once delivered to the its destination (e.g.
landfill).

Request an itemised invoice in your quotation or tender document that
requires the contractor to accurately account for charges.
There is a wide range of bins and equipment available for waste and recycling
collections. Potential contractors should be able to advise on the different types of
bins and equipment available and which might be best suited to your business, and
you can also refer to Step 4 for further information.

Be sure to consider all available bin/ equipment options available. Your
baseline data (refer to Step 1) will help to determine the equipment required.

Be careful to not only choose the bins you need for peak periods. Considering
how much waste your business generates across the entire year may indicate
a more appropriate collection system.

Designate whether you will supply your own bins and equipment or whether
you require the contactor to supply the same, and who is responsible for
repairs and replacement.

You may wish to include a separate item in your schedule to account for this
cost.

If you are considering an alternative waste collection system (e.g. different bin
size or a compactor) you can ask potential contractors to provide comparative
costs. Ensure that this is clearly defined in your specification (or request for
quote) and that the information is requested in consistent units where
possible (refer to Step 4 for further detail on how equipment may affect
charging).

Ensure that you allow potential contractors adequate lead time to secure any
necessary infrastructure (as a guide, contractors may require 6 months if new
trucks are needed, 1 month for new bins, 1 week if existing bins and trucks
will be used).
Waste services using the most common bin types, such as 240 litre wheelie bins or
front-lift bins, will generally be the cheapest option for business. Services that require
unusual, expensive or complex equipment, such as balers and compactors, will
generally be more expensive. However, depending on your business and the amount
of waste generated, equipment that appears more expensive may actually work out
to be cheaper in the long run (i.e. when you consider cheaper collection costs for
compacted waste on a per tonne basis, or when you factor in a higher economic
return from cardboard/plastic bales).
Depending on your requirements and the length of the contract, a contractor may
provide bins/ equipment for a one-off fee, by hire cost, or by building the cost into the
service charge or lift rate. Ownership of bins and equipment is critical when it comes
to replacing damaged or stolen bins. Note: the cost of a bin (apart from a compactor)
is generally only a small component of the overall service charge so it is often
worthwhile seeking the contractor to provide these.
Item
Weight limits
Subcontractors
Exclusivity
Source
separation
Why is this important?
Tips for maximising performance and cost efficiencies
Contractors may charge a penalty or increase costs if a bin is over-full or if the
weight of the bin exceeds a maximum amount.

Be aware of the maximum weight allowed by your contractor, and monitor
your bins to ensure that you do not exceed this amount.

Ensure staff distribute heavy materials across several bins.
In order to offer “package deals”, some waste contractors will subcontract services
they are unable to provide themselves. Even if a contractor can offer a service, it
may be subcontracted if a cheaper option is available.

Ensure that tender documents, quotations and contracts indicate where
services are subcontracted, and take this into consideration when evaluating
quotes/ tenders.
Many businesses report a number of unforeseen issues that arise as a result
subcontracting. For instance, there may be delays in receipt of data for the
subcontracted service, and response to issues with this service may be delayed due
to the additional layer of communication.

Ensure that your contract stipulates that the primary contractor is responsible
for the performance of the subcontractor so it is their responsibility to remedy
any non-conformance.
Some contracts may include an exclusivity clause - this means that your contractor
will have complete rights to all waste generated by your business.

If your contractor cannot offer all services you require, ensure your contract
allows you to offer that material to an alternative contractor.
The waste industry is constantly changing, and as technology matures, some
materials are becoming more viable and attractive for recycling. Your contractor may
not offer a recycling collection for this material, and an exclusivity clause will mean
that you will be unable to engage the services of another contractor for the term of
your contract, even if you identify a contractor offering this service for a lower cost or
cost neutral service.

This could take the form of a clause that allows you as the waste generator to
seek and implement alternatives to landfilling without having to compensate
the waste contractor.

Depending on the value of recyclable materials, contractors may pay or offset some
of a business’ waste costs. In some cases, there may be a financial advantage to
separating some materials for recycling, due to the market and price for that material.
Clean materials that have been separated into out into a single material type (e.g.

aluminium cans, PET plastics, cardboard or white office paper,) will attract the best
price for a recycling contractor. This can have a great impact on your waste costs. In
some cases, a contractor may be able to offer you a cost neutral service, or even
pay you for the material.
Review your baseline data gathered in Step 1 and identify whether there are
significant quantities of recyclable material in your waste. For the materials
identified, investigating whether there are any recycling options in your area.
When seeking quotations or tenders, enquire if contractors will provide
equipment (balers or separate bins), training/education and/or signage to
promote source separation and reduce your business costs.
Item
Contamination
Competition
Cleaning and
maintenance
Accessibility
Why is this important?
Tips for maximising performance and cost efficiencies
If your recycling bins contain too much non-recyclable material (contamination), you
may be liable for a penalty, and depending on the level of contamination, the load
may be treated as general waste and sent to landfill. This is because non-recyclable
material interferes with the machinery used by recycling facilities to sort and process
materials. The level of acceptable contamination may be stipulated in the recycling
contract.

Ensure that any penalties/ fees for contamination of recyclables is spelt out in
the contract.

Be aware of your contamination levels, and take steps to reduce
contamination as much as possible.

Ensure that bins provided by the contractor are clearly marked to identify
them as a recycling service (e.g. specific colour, signage or stickers)

Education and training of staff is a critical component

It is also a good idea to require the contractor to provide evidence of the
contamination, without which a penalty may not be paid.
Generally, where contractors have to compete for a service, prices will be lower to
ensure they are competitive.

Seek out a reasonable number of quotes/ tenders to ensure you get the best
deal (at least three).
Also, greater volumes of waste generated by a business will increase the purchasing
power with the waste contractor.

In some situations, it may be more cost-effective to arrange shared waste and
recycling services with adjacent businesses, or to tender for a single waste
contractor to service a number of businesses to gain economies of scale
and/or efficiencies

Where there are multiple sites of the same business, try and use the same
contractor to entice economies of scale and/or efficiencies

If you require cleaning and maintenance of your bins/ waste collection
equipment, ensure that this is clearly defined in your Schedule/ request for
quote.

Stipulate whether you require regular cleaning (e.g. weekly, monthly), or an
at-call cleaning service

Generally, the more difficult it is for contractors to access your waste, the
greater the collection charges.

Discuss the accessibility of your business with potential contractors to identify
any opportunities to improve ease of access for collection trucks.

Sites with access constraints may require special collection vehicles that not
every contractor possesses. Ensure your preferred contractor can service
your business location
From time to time, your bins/ waste collection equipment will require cleaning and/ or
maintenance. A waste contractor can generally provide this service, however there
may be a fee involved.
Generally a waste contractor will conduct a site inspection to assess a number of
factors, including how accessible your business is for a collection truck. A number of
factors may influence the cost of your service including:

Ease of access (e.g. narrow/ steep/ busy roadways may not be accessible or
require more time)

Arrangement of collection point (e.g. if drivers are required to move bins to the
truck this will take more time)
Item
Why is this important?
Tips for maximising performance and cost efficiencies
Collection
frequency
There are two main service options for waste collections, a scheduled or at-call
service (refer to Step 4). A scheduled service is a regular service, which will
generally cheaper per service, as the contractor is more certain of the likely income
over the life of the contract. At-call services, where waste is only picked up on
request, will generally be more expensive on a pick up basis as the contractor may
try to offset the uncertainty of income by charging more per pick up.

Contract
Duration
Longer contracts provide contractors with more certainty, and will generally lead to

lower prices and costs. Waste contracts commonly have a term of three years but
often they can be as long as five years. However, while a longer contract may secure 
a lower price initially, this will restrict your business from being able to test the market
and renegotiate at any time during that period.
Carefully consider the term of your contract, and ensure that the contract
duration is appropriate and suited to your business needs.
Many waste contracts include an “Automatic Renewal” or “Rollover” clause. This
clause will generally stipulate a period towards the end of your contract term when,
unless you notify that intend to renegotiate or procure an alternative waste service,
you may be locked into another contract term.

Read your contract carefully and be aware of any “Automatic Renewal” or
“Rollover” clauses. If this clause is included in your contract, ensure that you
set up a reminder to allow you to renegotiate or seek alternative offers prior to
your rollover date.

Consider including a clause that requires the contractor to ensure that
material which has been separated for recycling is sent to an appropriate
facility. Landfills and recycling facilities are able to provide weighbridge
dockets to substantiate receival.

Requesting an itemised invoice can assist with identifying the disposal or
recycling destination
Automatic
Renewal/
Rollover
Seek prices that reflect your needs, and clearly state in your quotation or
tender schedule that you are seeking an at-call or regular service as this will
impact your price
An alternative model is a casual or rolling arrangement that is less formal and
allows your business to regularly test the market. While this type of
arrangement may reap short term ‘spot” efficiencies it may be more time
consuming to administer and lead to increases in prices that are not justified
due to the lack of a formal contract.
Some waste contracts will include an ‘extension’ clause. This clause allows you to
extend your arrangement with your contractor for a set period (usually one year) if
both parties are satisfied.
Recycling
assurance
Once you have set up a successful waste system, you may like some assurance that
materials separated out for recycling, are sent to appropriate facilities. It is worth
asking potential contractors about the final destination of your waste and recycling,
and ensuring the integrity of this aspect of your service through your contract.
Environment/
Sustainability
You may wish to request a contractor’s environmental credentials (such as ISO
accreditation or similar systems) to see if their environmental management and risk
systems mirror your businesses expectations. This is especially important if your
business holds an accreditation such as ISO or Green Star.

Request a copy of all potential contractors’ environmental credentials, and
take this into consideration during the evaluation process.
Regulatory/
licence
requirements
EPA licenses are required for most waste facilities, and disposal of a hazardous
waste materials are regulated by Victorian environmental protection laws (refer to
EPA Victoria’s website for further information).

Ensure that your contract requires your waste contractor to adhere to all
relevant EPA license and regulatory requirements, and dispose of your
wastes to an appropriately licenced facility.
Item
Why is this important?
Tips for maximising performance and cost efficiencies
Health &
Safety
Businesses have responsibilities regarding health and safety in your workplace, and
this extends to your contractors. It is strongly recommended that emphasis be given
to managing health and safety in tender documents, contracts and evaluation of
quotes/ tenders.

Request the contractor’s occupational health and safety (OH&S)
accreditation, Workcover and public liability insurance certificates in the
quotation or contract specification. Where appropriate, contractors may also
provide their safe working procedures and risk assessments.
Communicatio
n
Regular communication with your waste contractor is highly recommended, as this
will help you monitor performance and provide opportunities to address issues as
they arise.

Establish regular communication (e.g. monthly meetings) with your contractor,
and, where possible, stipulate this in the contract. You may wish to consider
including adherence to this regular communication as a KPI.

Request that your contractor provide a customer service phone number that
your business can contact in case of service faults or disruption

Consider linking payments to the receipt of monthly data.

For ease of administration (for both parties) specify a reporting schedule that
mirrors your invoicing frequency.

Ensure that your contract stipulates the items which should be included in
data reports, for example:
Data
Missed
services
Training/
Education
Accurate and regular (e.g. monthly) data will be crucial to the success of your waste
service. Specify clear reporting criteria in your contract, but try to keep these to the
essential information only. You don’t want to get bogged down in the level of
information you receive.

Summary of all waste and recycling streams collected;

Actual hours of attendance / number of collections;

Perceived deficiencies in specified waste management services; and

Performance against KPIs (refer Section 3.2.2).
Mistakes can happen, but missed collections can create flow-on problems,
particularly for generators of large waste volumes. The contractor should be able to
guarantee that missed collections will be collected within a certain time period.

Include a clause in your contract which specifies the maximum time period
within which missed collections will be collected.

Consider specifying a Key Performance Indicator for missed services (see
Section 3.2.2).
Include regular education on how to use the system as part of your waste and
recycling contracts. Bear in mind that education may not be the core business of
collection contractors, and that they may not have the same success engaging with
your staff as your internal management may have. However, the contractor may be
able provide valuable assistance through the provision of leaflets, stickers and
signage.

Include provision of bespoke education, training and signage in your contract.
This does not necessarily have to be part of the regular costs, but could be
included as an “add-on” service, where the cost is stipulated in the contract,
but only charged when the service is actually taken up.
Item
Why is this important?
Tips for maximising performance and cost efficiencies
Waste audits
and
assessments
Some waste or recycling contractors can provide a range of additional services, such
as waste or recycling audits or assessments, and reporting including information
about the business’s performance.

Seek specialised firms to provide this service, or conduct your own (see
section 3.1.1) prior to engaging a contractor.

Include an option for the provision of this service in your contract. This could
be included at a regular frequency or as an at-call service. Ensure any
additional associated costs are stipulated in the contract.
Invoicing
Your contractor will supply you with regular invoices, and it is advisable to monitor
these closely to keep track of waste quantities and associated costs. Invoices can be
complex and difficult to interpret. Often the total amount collected (in volume or
weight) is not provided on an invoice, rather it may simply indicate the number of
bins collected and the cost. If this is the case, ask your contractor to indicate the
assumed weight of your bins (this may have been used to work out per bin lift price).

Consider stipulating a detailed invoice that demarcates the service, transport
and disposal costs, and itemises other applicable fees separately.

Ensure that your invoice includes the following, at a minimum:
It may be worth discussing the invoice format with your contractor, agreeing on a
format and stipulating this in your contract. Request a breakdown of costs for landfill
disposal fees, transport fees and government charges as this will help to demystify
your waste charges considerably.

Dates of collection,

Number of bins collected, by waste/ recycling type and size (volume),

If you are charged by bin lift, the assumed weight of the bins

The cost of collection

Other government charges

Bin rental fees (where relevant)

Any other charges applied by the contractor (with a clear description)
Variations
It is sometimes necessary to make changes to a service after the contract has been
signed. It is important to ensure that any changes, particularly those which may incur
additional costs, be discussed and agreed beforehand, and confirmed in writing

Ensure that your contract (including any associated fees and charges) may
be only be varied by either party by written agreement.
Termination
Some contracts may include clauses that allow for cancellation or early termination
of the contract, particularly under circumstances where either party breaches any of
the terms and conditions of the contract. There may also be fees or penalties
associated with terminating the contract.

Ensure any circumstances, which would prompt cancellation or termination of
the contract, are clearly stipulated.

Ensure any fees involved in contract termination are clearly stipulated in the
contract.
Flexibility
During a contract, a business may identify opportunities to reduce costs, such as
changing the frequency of collection or bin size, or a reduction in the number of bins
needed due to an improvement in resource efficiency. However, some contracts may
not permit a variation to the service agreement.

It may be advisable to build some flexibility into your contract, for instance,
allow for a performance review every 6 months which would allow you to
make adjustments to your service.
Item
Innovation
Continuous
Improvement
KPIs
Why is this important?
Tips for maximising performance and cost efficiencies
You may wish to encourage innovation in service delivery from contractors both
through the tendering process and throughout the length of your contract. If so, you
will need to ensure that the scope of services is flexible enough to allow for
innovation. You can build this in to your contract by including incentives when
contractors identify and offer solutions that reduce waste quantities and/ or increase
recycling rates.

Consider outlining the scope of services broadly at the beginning of the
procurement process to allow a contractor to provide an innovative solution.
In this case, innovation should be included as an evaluation criterion, to
ensure a level playing field.

Include incentives in the contract for when contractors identify and offer
solutions that reduce waste quantities and/ or increase recycling rates.
A best practice contract should not be “set and forget”. You should take steps and
build in clauses and KPIs to your contract which ensure continuous improvement
over the length of the contract.

Consider including KPIs which require a continuous improvement in
performance e.g. an improvement in diversion of waste by xx% each year.

Consider including a continuous improvement clause in your contract that
provides for regular reviews (e.g., annually) with the contractor to discuss and
agree inclusion of emerging products and services. Even though in some
circumstances this may require a variation of fees, it will allow you to integrate
the latest best practice systems throughout the term of the contract.
Setting achievable and measurable performance indicators will assist in delivering a
best practice contract, as this will not only assist you to improve performance over
the contract, but also provides a tool to measure contractor performance

Please refer to Section 3.2.2 for a summary of example KPI’s to include in
your quotation or contract.