Principals achieving health and safety outcomes: Manukau City Council’s procurement arrangements
1. Introduction
The Department of Labour (the Department) commissioned this evaluation of the procurement arrangements of Manukau City Council (Manukau CC) in recognition of the council's work in using procurement to achieve desirable compliance outcomes when services are delivered.
This evaluation report presents a case study of Manukau CC's procurement policies and practices and assesses their effectiveness in enhancing health and safety outcomes. The case study provides information that will be of use to other local councils and principals on meeting the requirements of the Health and Safety in Employment Act 1992 when contracting out services.
Manukau City is the third largest of New Zealand's districts, with a population of 328,968 at the 2006 Census. In population terms, it is the fastest growing city. It is also the most diverse and multicultural urban environment with over 180 ethnic groups, including 15% of its residents who identify as Māori, 28% as Pacific and 22% as Asian.[3] The district covers 55,387 hectares of land, with more than 3,200 hectares of open space, including over 400 parks, 90 civic areas and 150 kilometres of esplanade.[4] There are 10 council-operated leisure and recreation centres in the city, including six pools. Manukau also has 15 public libraries, six community arts centres and 23 urban marae.
Manukau CC is the major purchaser of physical works in the district, spending over $135 million on physical works contracts in 2008/09, including roading, parks, solid waste, storm water and properties.
Manukau CC identified physical works as a major risk area for health and safety and has incorporated health and safety within its capability criteria for pre-qualification and tendering in physical works contracts. Manukau CC also spot checks vertically through the supply chain to ensure that the standards required of pre-qualified contractors are extended to their subcontractors.
1.1 Background
The Workplace Group of the Department of Labour is the Government's principal advisor on employment policy, workplace health and safety policy and ACC policy. The Workplace Group also delivers employment relationship and workplace health and safety customer services.
The Government has a 10-year Workplace Health and Safety Strategy for New Zealand for the decade to 2015. A central objective in its own practice is to "provide leadership in workplace health and safety through the Government's role as employer and purchaser".
Among the actions it envisages to fulfil this objective is a "review of government purchasing and contracting guidelines and practices, to promote workplace health and safety within a fair and effective trading environment".
Some 30% of prosecutions under the Health and Safety in Employment Act 1992 are taken under Section 18(1) of the Act, which states that:
Every principal shall take all practicable steps to ensure thatis harmed while doing any work (other than residential work) that the contractor was engaged to do.
- No employee of a contractor or subcontractor; and
- If an individual, no contractor or subcontractor,
Various industry sectors are concerned about principals' liabilities in respect of contractors. The Department produced draft guidelines[5] in June 2008 that set out a broad process for building health and safety into contract management. The guidance is able to be adapted to specific contractual situations or industries.
This case study complements the draft guidelines by presenting one council's experience in implementing new systems and processes to ensure it meets its statutory obligations for health and safety in physical works contracts.
The case study:
- describes Manukau CC's procurement arrangements (including the current arrangements, how they came about, challenges and successes encountered)
- benchmarks Manukau CC's procurement arrangements against the Department's draft guideline (including key areas of convergence/divergence to the guideline and rationale for this)
- evaluates whether the investment has been worthwhile from several perspectives, including impacts on contractor behaviour, health and safety outcomes, value for money, good practice principles and opportunities for improvement.
1.2 Methodology
The evaluation was conducted during June-July 2009. It combined a review of core documents, face-to-face interviews with key stakeholders and analysis of available data. Core documents included Manukau CC procurement guidelines, internal reports and memoranda on the implementation of the new arrangements, and the Department's draft guideline.
Stakeholder interviews were undertaken to collect narrative information on issues related to procurement practices. The evaluators interviewed:
- representatives of Manukau CC, the Department and ACC
- a sample of contractors and professional services consultants
- the independent consultant who was engaged to develop and implement the systems and processes for Manukau CC.
Quantitative data analysis sought to make use of available data from Manukau CC to address the evaluation objectives. Departmental and ACC data was also investigated but was not included due to an inability to distinguish accidents in physical works contracts for Manukau CC from work done for other principals.
[3] See www.manukau.govt.nz/default.aspx?page=statistics.
[4] This excludes the 3,600 hectares of regional parks in the city, which are the responsibility of the Auckland Regional Council.
[5] Department of Labour, 2008, A principal’s guide to contracting to meet the Health and Safety in Employment Act 1992.
