PCD 1287 Provision of Agency Fuel Cards and Supply and Delivery of Bulk Fuels BJP

PCD 1287    Provision of Agency Fuel Cards and Supply and Delivery of Bulk Fuels BJP  

This decision seeks approval to initiate procurements and award call-off contract(s) for business as usual requirement(s) of Agency Fuel Cards and Supply and Delivery of Bulk Liquid Fuels. 

The provision of fuel cards and supply and delivery of bulk liquid fuels are integral for ensuring MPS supports all aspects of day-to-day policing; meet strategic targets; deliver sufficient flexibility to respond to evolving crime and policing needs; and can be relied upon to help protect those living and working in London. 

Fuel prices have been rising since prior to the war in Ukraine and the fallout from Russia’s invasion has placed further pressure on energy and fuel security, resulting in cost increases for both energy and fuel.  

Anticipated spend over the life of these contracts has therefore increased. Work is currently underway to assess the impact of rising inflation across the MPS and this will be reviewed at the autumn financial stocktake.  An additional £2.93m is required for Bulk Fuel and Agency Cards and this will also be addressed through the stocktake and in time for the revised budget submission to the GLA in November. 

Any spend above the current approved budget will be subject to MPS Corporate Finance review and approval. 

The Deputy Mayor for Policing and Crime is recommended to:   

1. Approve procurement initiation via Crown Commercial Services (CCS) Framework RM6177 and award of three call-off contracts for the Supply & Delivery of Bulk Liquid Fuels over a 4 year term (2+1+1). Contract commencement is 1st October 2022. The contract award breakdown: 

1. WFL (UK) Ltd estimated contract value £9.9M for the supply of Diesel. 

2. Certas Energy UK Ltd estimated contract value £3.9M for the supply of Red Diesel. 

3. New Era Fuels Ltd estimated contract value £1.3M for the supply of Gas to Liquid and Kerosene. 

2. Approve procurement initiation via Crown Commercial Services (CCS) Framework RM6177 for the Supply and Delivery of Bulk Liquid Fuels (Petrol) with an estimated contract value of £9.6M  over a 4 year term (2+1+1). Contract commencement is 1st April 2023.  

3. Approve uplift to the original contract award value of £40M by 25% (£10M) for the Provision of Fuel Cards with Allstar Solutions Ltd up to 31st March 2023.  

4. Approve a 12 month call-off contract extension for the Provision of Fuel Cards with Allstar Solutions Ltd procured via CCS Framework RM6000. The estimated contract value is £15M over this period. Contract commencement is 1st April 2023. 

5. Approve procurement initiation action for a call-off contract for the Provision of Fuel Cards. The contract value is £67.5M over a 4 year term. The contract commencement is 1st April 2024. 

6. Approve delegation of authority to award contracts to the Director of Commercial Services. 

PART I - NON-CONFIDENTIAL FACTS AND ADVICE TO THE DMPC 

1. Introduction and background  

1. The provision of fuel cards and supply and delivery of bulk liquid fuels are integral for ensuring MPS supports all aspects of day-to-day policing; meet strategic targets; deliver sufficient flexibility to respond to evolving crime and policing needs; and can be relied upon to help protect those living and working in London. 

2. Currently MPS supply and delivery of bulk liquid fuel contributes to the resilience plans for London’s emergency services during fuel shortages or disruption to the supply chain. In the event of industrial action affecting the supply, the MPS is required to provide critical reserve to ensure continuation of operational policing for a minimum of 10 days, before the national emergency plans for fuel is invoked by the Department of Business, Energy and Industrial Strategy. 

3. Fuel for the MPS vehicle fleet is currently supplied across six sites geographically spread across London at locations where there are concentrations of sufficient fleet vehicles to necessitate resilience measures. 

4. Marine fuel (Gas to Liquid) is fundamental in supporting the operation of the MPS Marine Policing Unit (MPU) which is responsible for policing the 47 miles of River Thames within the MPS area (Dartford to Hampton Court) as well as providing specialist response capability to over 250 miles of canals and waterways, lakes and reservoirs and other bodies of water in London. 

5. Bulk fuel for MPS buildings provides heating and back up generation in the event of disruption to energy supply at local, regional and national level. The primary requirement is to support back up generation.  

6. The provision of agency fuel cards provides a method of payment for fuel via a single supplier. This will provide MPS access to fuel and associated services regionally, nationwide and European coverage. 

2. Issues for consideration  

1. MPS bulk fuel sites provide resilience with 10 days’ supply of fuel for all MPS vehicles in the event of a regional or national shortage. These sites are anticipated to close in alignment with the fleet’s transition to Electric vehicles, if this occurs during the life of the contract the calculated spend will reduce.  

2. The range of available fuel types via fuel cards has increased to benefit MPS transition to hybrid and electric vehicles to enable delivery of the current clean air targets of hybrid GP vehicles to 2025 and electric from 2025, and hybrid emergency response vehicles from 2025 and Electric from 2030, as per the Mayor of London’s Environment Strategy.  

3. In addition, the agency fuel card contract will be flexible enough to support the delivery of the Net Zero Carbon Emissions target by 2030, currently under discussion, by providing nationwide access to a wide range of charging technologies and fuel types.  

3. Financial Comments  

1. Fuel prices have been rising since prior to the war in Ukraine and the fallout from Russia’s invasion has placed further pressure on energy and fuel security, resulting in cost increases for both, energy and fuel. Demand for oil from other producers has increased, leading to global increases in prices. Oil prices are unlikely to reduce in the short term or until oil producers are able to increase supplies; when and if this will happen is not yet known. 

2. Due to these factors anticipated spend over the life of these contracts has increased. The total fuel budget is made up of 76% Met Revenue and 24% externally funded budgets. Work is currently underway to assess the impact of rising inflation across the MPS and this will be reviewed at the autumn financial stocktake.  The additional £2.93m required for with Bulk Fuel and Agency Cards will also be addressed through the stocktake and in time for the revised budget submission to the GLA in November. 

3. Any spend above the current approved budget will be subject to MPS Corporate Finance review and approval. 

4. Legal Comments  

1. The MOPAC is a contracting authority as defined in the Public Contracts Regulations 2015 (“the Regulations”). When awarding public contracts for goods and/or services valued at £213,477 or above, all contracting authorities must do so in accordance with the Regulations.  

2. This report confirms the value of the proposed contracts all exceed the above threshold and so the Regulations are engaged. 

3. The Commercial Case to this report confirms the proposed route to market is compliant.  

4. Recommendations 1, 2 & 5 - requests approval for a number of procurement initiation activities for the supply of bulk fuel and confirms those activities will be undertaken in accordance with the Regulations.   

5. Recommendation 3 – requests approval to uplift original contract award value of £40M by 25% (£10M) for the Provision of Fuel Cards. The uplift exceeds the contract value but can be justified on ground of Regulation 72(1)(b) PCR 2015 which provides a modification is permitted: 

for additional works, services or supplies by the original contractor that have become necessary and were not included in the initial procurement, where a change of contractor— 

(i) cannot be made for economic or technical reasons such as requirements of interchangeability or interoperability with existing equipment, services or installations procured under the initial procurement, or 

(ii) would cause significant inconvenience or substantial duplication of costs for the contracting authority, 

provided that any increase in price does not exceed 50% of the value of the original contract; 

6. An increase of £10M based on an original contract value of £40M equates to an increase 25% and so is within the limit of 50% in regulation 72(1)(b). This report also confirms the impacts of changing contractor and the technical challenges that would bring.  On that basis, regulation 72(1)(b) would apply. 

7. Regulation 72(3) requires contracting authorities that have modified a contract in the case described 72(1)(b) shall send a notice to that effect, in accordance with regulation 51, for publication. 

8. Recommendation 4 - requests approval to extend an existing contract for Agency Fuel Cards for a period of 12 months and confirms such extension is permitted under its terms. 

9. The MOPAC Scheme of Delegation and Consent (“the Scheme”) provides that the Director of Strategic Procurement has consent for the approval of: 

1. The award of all contracts, with the exception of those called in through the agreed call in procedure (paragraph 7.23); and 

2. All variations and extensions for contracts, not elsewhere approved, with the exception of those called in through the agreed call in procedure (paragraph 7.24). 

10. The MOPAC Scheme provides the Deputy Mayor for Policing and Crime (“DMPC”) has delegated authority:  

1. To Approve: 

1. Business cases for revenue or capital expenditure of £500,000 and above (paragraph 4.8); and 

2. All requests to go out to tender for contracts of £500,000 or above, or where there is a particular public interest (paragraph 4.13).  

2. To reserve the right to call in: 

1. all variations and extensions to contracts with an original value of £500,000 or above (paragraph 4.14); 

2. any MPS proposal to award a contract for £500,000 or above (paragraph 4.14). 

5. Commercial Issues  

1. In March 2022 the CSS conducted a mini competition on behalf of the MPS against Lot 109 of the RM6177 framework.  Nine suppliers were invited to compete against MPS volumes of fuel usage (annually) which included - Kerosene Gas Oil A2 (Red Diesel), Diesel, Gas to Liquid and Petrol ULSP.  No bids were returned for petrol requirements therefore as part of a contingency plan the supplier WFL (UK) Ltd will now provide petrol requirements in the interim up until March 2023.  CCS will re-run the competition in July 2022 for petrol requirements with a view of awarding a supplier. 

2. Blue Light Commercial (BLC) are leading an Emergency Services procurement exercise for a national framework to include UK Police forces.   BLC are currently at the early stages of assessing routes to market. Options being considered include the CCS Framework or running a new procurement.  

3. The MPS is committed to pioneering socially, environmentally and economically sustainable procurement to deliver improved quality of life and better value for money. Bidders will be assessed on how they deliver Social Value outcomes including how they will support in the delivery of the 5 key objectives of London Anchor Institution’s Charter and how this contract will contribute to the Authority’s commitment to support those groups most impacted by the pandemic. 

4. The RM6177 the framework is heavily supportive and demonstrates a number of social value priorities which were included in the procurement of the framework.  Three main themes include economic benefits, ensuring a diverse base of suppliers and resilient supply chains whilst making opportunities available to SMEs.  The inclusion of social value benefits, for example community benefits and fair working practices, employment and skills, capability and skills improvement such as: promotion of training and apprenticeships and mentoring and coaching opportunities. The framework also embeds environmental benefits including sustainable production and consumption and improvement in environmental quality, through less polluting technology and more efficient or alternative approaches to solutions in the reduction in pollution. 

5. The 12 month extension to the original fuel card contract is required to allow the MPS to participate in a collaborative procurement exercise led by Bluelight Commercial on behalf of all Emergency Services. This additional 12 month period is allowed for within the previous procurement and award that was run by CCS and Surrey & Sussex Police Constabularies as the lead and includes the MPS as a nominated user. The MPS awarded a 48 month call-off. If the MPS run a separate procurement for the short term without the volume from the wider emergency services there is a risk value for money would not be maximised and the MPS would also be duplicating efforts tendering for the longer term contract led by Bluelight Commercial. 

6. The MPS shall seek to request reports from awarded suppliers in respect of social value and Sustainability commitments and use these metrics to best inform good practice within companies operating in the fuel market. 

7. The agency fuel card contract will be flexible enough to support the delivery of the Net Zero Carbon Emissions target by 2030, by providing nationwide access to a wide range of charging technologies and fuel types.  

8. The MPS continue to transition to hybrid and electric vehicles which meet the MPS role requirements and educating its officers to utilise electric charging where possible. This will continue to reduce its requirement for fossil fuel in the future. Therefore the MPS anticipate growth in usage of fuel cards in the future.    

6. GDPR and Data Privacy  

1. The MPS is subject to the requirements and conditions placed on it as a 'State' body to comply with the European Convention of Human Rights and the Data Protection Act (“DPA”) 2018. Both legislative requirements place an obligation on the MPS to process personal data fairly and lawfully in order to safeguard the rights and freedoms of individuals. 

2. Under Article 35 of the General Data Protection Regulation (“GDPR”) and Section 57 of the DPA 2018, Data Protection Impact Assessments (“DPIA”) become mandatory for organisations with technologies and processes that are likely to result in a high risk to the rights of the data subjects. 

3. The Information Assurance and Information Rights units within the MPS will be consulted at all stages to ensure the project meets its compliance requirements. 

4. Personal data is not required or stored.   

5. Provision of Agency Fuel Cards and Supply and Delivery of Bulk Fuels does not use personally identifiable data of members of the public or Met personnel, aside from essential basic contact details necessary to ensure the discharge of the contract, so there are no GDPR issues to be considered.  

7. Equality Comments  

1. This business case has undergone initial equality screening. Due regard has been taken to the Equality Act’s Public Sector Equality Duty under Sec 149 of the Equality Act 2010.  

2. The CCS procurement process will assess the suitability of suppliers for working with the public sector. Real consideration is taken to assess equality impact caused by the proposed contract including effective engagement and analysing relevant equality information. As a result, no positive or negative impact has been identified to any individual and/or group safeguarded by a protected characteristic and to those who are not.  

8. Background/supporting papers 

1. Report