Vehicle Lease and Maintenance Contract Award – 51 Derogation DSA
Meeting: Public Trust Board
Date: 8 May 2024
Report Title: Vehicle Lease and Maintenance Contract Award – 51 Derogation DSA
Agenda Item: 3.2
Author: Keiran Bromley, Fleet Clinical Engagement and Implementation Manager, Darren Ward, Head of Financial Systems and Capital Programmes and Anthony Brett, Deputy Chief of Clinical Operations.
Lead Director: Melissa Dowdeswell, Chief of Clinical Operations
Purpose: Information noting
Assurance: Substantial
Link to CQC domain: Well-led and Safe
Link to Strategic Objective(s):
- Be an exceptional place to work, volunteer and learn
- Provide outstanding quality of care and performance
- Be an environmentally and financially sustainable organisation
Link to Strategic Risk:
- SR1: Failure to deliver a timely service to our patients in line with commissioned national standards, to ensure a safe level of service
- SR2: Failure to achieve continuous quality improvements and high-quality care delivery
- SR3: Failure to embed a culture focused on staff safety and wellbeing
- SR4: Failure to deliver an efficient, effective and economic service
- SR5: Ability to embed EEAST’s place within the changing system to support delivery of the NHS Long-Term Plan
- SR6: Ability to ensure sufficient capacity and capability to ensure sustainable change
Equality Impact Assessment: No negative impact identified
Previously considered by: ELT and Trust Board – approved fleet replacement in 2023-24 financial year. CIG. On 23.04.24 ELT approved Option 2. to award the lease provider TPLL at a total value of £7,079,531.00 + VAT and maintenance provider to AAM at a total value of £2,048,425.00 + VAT.
Recommendation: Information on the approval of the award of lease and maintenance contracts to the most competitive providers, following a compliant tender process undertaken on behalf of EEAST by Link Asset Assured.
Purpose: To inform the Board of ELT approval to award the lease and maintenance contracts for 51 front line derogation ambulances.
Executive Summary
2023-24 ELT and Trust Board approved the acquisition of 99 front line derogation ambulances from a number of different converters and vehicle suppliers.
Lease and maintenance tenders have been taken to market for the first 51 ambulances.
The Trust is now positioned to award the leasing and maintenance contracts for these vehicles.
Introduction / Background
In 2023, the Trust Board approved the purchase of 99 front line derogation ambulances for growth and replacement of some of the aging fleet. It was the intention to seek partners to provide a lease buy-back arrangement and maintenance package.
Link Asset Assured have undertaken a compliant open-market tender to provide the lease and maintenance requirements.
Link uses the Delta eSourcing portal to manage all tender requirements, enabling efficient, effective, and compliant procurement exercises on the Trust's behalf.
Link issued the Invitation to tender to secure leasing quotations under Lots 7 and 8 of the South East Coast Ambulance Vehicle Supply Framework (OJEU Reference 20/20/S 047-112564).
Of the eight providers able to respond under Lot 7 (lease), two provided quotes for review:
| Lessor | Spec | Spec A1 | Spec A2 | Spec B | Spec C | Spec D | Total Lease Costs for 51 Vehicles |
|---|---|---|---|---|---|---|---|
| Vehicles | MAN/WAS Box | MAN/WAS Box | Ford / WAS | Ford / WAS bariatric | MAN / Wilker Box | ||
| No of vehicles | 5 | 10 | 10 | 16 | 10 | 51 | |
| Capital cost per vehicle | £133,036.00 | £135,915.00 | £132,736.20 | £143,046.025 | £164,424.27 | ||
| Total capital cost | £665,180.00 | £1,309,744.90 | £1,273,537.47 | £2,288,740.00 | £1,633,144.00 | ||
| TPLL | £638,206.95 | £1,309,744.90 | £1,273,537.47 | £2,224,884.15 | £1,633,144.00 | £7,079,517.47 | |
| DLL | £648,816.57 | £1,325,714.91 | £1,294,708.89 | £2,232,437.00 | £1,671,290.49 | £7,172,967.86 |
TP Leasing LTD (TPLL) are the most competitive provider and meets all requirements of EEAST.
Of the three providers under Lot 8 (maintenance) able to respond, two provided quotes:
| Scoring Criteria | Max score | Maintenance Company | Maintenance Company | ||
|---|---|---|---|---|---|
| Alltruck | AAM | ||||
| Response | Score | Response | Score | ||
| Maintenance cost | 80 | £1,390,535.00 | 74.30 | £1,298,010.00 | 80.00 |
| Maintenance management fees | 10 | £415,325.00 | 8.66 | £366,085.00 | 10.00 |
| Recharge labour rate | 10 | £52.50 | 10.00 | £52.50 | 10.00 |
| 100.00 | 92.96 | 100.00 |
Asset Assured Management LTD (AAM) are the most competitive provider and meet all the requirements of EEAST.
| Per vehicle | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Alltruck | AAM | ||||||||||||
| Spec | Quantity | Maintenance price per vehicle | Management Fees applied | Total maintenance price per vehicle | Optional patient handling equipment | Breakdown Cover | Total with options | Maintenance price per vehicle | Management Fees applied | Total maintenance price per vehicle | Optional patient handling equipment | Breakdown Cover | Total with options |
| A1 | 5 | £5,353.00 | £1,599.00 | £6,952.00 | £1,744.35 | £324.68 | £9,021.03 | £4,954.00 | £1,397.00 | £6,351.00 | £1,378.00 | £320.00 | £8,049.00 |
| A2 | 10 | £5,353.00 | £1,599.00 | £6,952.00 | £1,744.35 | £324.68 | £9,021.03 | £4,954.00 | £1,397.00 | £6,351.00 | £1,378.00 | £320.00 | £8,049.00 |
| B | 14 | £5,025.00 | £1,501.00 | £6,526.00 | £1,744.35 | £324.68 | £8,595.03 | £5,140.00 | £1,450.00 | £6,590.00 | £1,378.00 | £320.00 | £8,288.00 |
| C | 10 | £5,877.00 | £1,755.00 | £7,632.00 | £793.35 | £324.68 | £8,749.86 | £5,272.00 | £1,487.00 | £6,759.00 | £986.00 | £320.00 | £8,065.00 |
| D | 10 | £5,353.00 | £1,599.00 | £6,952.00 | £1,744.35 | £324.68 | £9,021.03 | £4,954.00 | £1,397.00 | £6,351.00 | £1,032.00 | £320.00 | £7,703.00 |
It is recommended to provide the patient handling equipment maintenance and breakdown cover as part of the maintenance element of the award.
Based on the tender award recommendation the annual running costs of these vehicles is £5,307 per vehicle higher than the existing Fiat DSA. They have a higher lease ownership cost due to the increased cost of base vehicle chassis, parts and labour costs and converting costs due to inflation and general worldwide increase in costs in the last five years. The new vehicles offset some of this with lower maintenance and fuel costs. This would equate to a total annual cost pressure of £270,655 across the 51 new vehicles.
These values have already been factored into the 2024-25 budgets:
| Annual revenue cost (per vehicle) | Spec A1 MAN / WAS Box | Spec A2 MAN / WAS Box | Spec B Ford / WAS Box | Spec C MAN / WAS Bariatric | Spec D MAN / Wilker Box | Total | Existing Fiat DSA |
|---|---|---|---|---|---|---|---|
| Lease costs | 25,529 | 26,195 | 25,471 | 27,811 | 32,663 | 17,800 | |
| Contract maintenance | 8,049 | 8,049 | 8,288 | 8,065 | 7,703 | 8,593 | |
| Maintenance (estimate) | 4,200 | 4,200 | 4,200 | 4,200 | 4,200 | 8,646 | |
| Annual fuel cost | 8,728 | 8,728 | 8,728 | 8,728 | 8,728 | 9,919 | |
| Insurance | 4,384 | 4,384 | 4,384 | 4,384 | 4,384 | 4,384 | |
| Annual running cost | 50,890 | 51,556 | 51,071 | 51,071 | 57,678 | 49,342 | |
| Total 5 year running cost | 254,451 | 257,781 | 255,355 | 255,355 | 288,391 | 246,708 | |
| Quantity of vehicles | 5 | 10 | 10 | 16 | 10 | 51 | 51 |
| Annual running cost (all vehicles) | 254,451 | 515,562 | 510,711 | 929,569 | 576,782 | 2,787,074 | 2,516,419 |
The capital lease value of these vehicles is £6,295,192 which is within the Trust 2024-25 capital plan.
| Capital | Spec A1 MAN / WAS Box | Spec A2 MAN / WAS Box | Spec B Ford / WAS Box | Spec C MAN / WAS Bariatric | Spec D MAN / Wilker Box | Total |
|---|---|---|---|---|---|---|
| Capital ROU | 567,512 | 1,164,639 | 1,132,443 | 1,978,390 | 1,452,209 | 6,295,192 |
Whilst it is not anticipated, should there be any significant change to costs or leases throughout the build process, additional papers will be submitted to the appropriate Trust platform for review.
Key Issues / Risks:
- To ensure a financially compliant process is followed for market testing and award.
- Failure to provide a new fleet to replace aging vehicles.
- Failure to cost-effectively maintain new vehicles.
Options:
- To not approve the lease and maintenance for 51 ambulances, with risks as described above tolerated.
- To approve the award of lease provider to TPLL (at a total value of £7,079,531.00 + VAT) and maintenance provider to AAM (at a total value of £2,048,425.00 + VAT).
| Spec A1 MAN / WAS Box | Spec A2 MAN / WAS Box | Spec B Ford / WAS Box | Spec C MAN / WAS Bariatric | Spec D MAN / Wilker Box | Total | |
|---|---|---|---|---|---|---|
| Total lease award value (exc VAT) | 638,220 | 1,309,745 | 1,273,538 | 2,224,884 | 1,633,144 | 7,079,531 |
| Total maintenance award value (exc VAT | 201,225 | 402,450 | 414,400 | 645,200 | 385,150 | 2,048,425 |
| Total contract award (exc VAT) | 839,445 | 1,712,195 | 1,687,938 | 2,870,084 | 2,018,294 | 9,127,956 |
- Award the lease and maintenance contracts to another provider outside of the compliant tender process.
ELT approved Option 2. on 23 April 2024
Summary
After a competitive tender process, EEAST is positioned to award the contracts to lease and maintain the provision of 51 front line derogation ambulances. The Board is asked to note the approval.
