Procurement of municipal waste services: Challenges and opportunities

In the face of continuing budget cuts, legislative change, and wider global market uncertainties, waste services remain an area of focus for decision makers within councils.

Where services are contracted out, planning for contract expiry allows for reflection and an opportunity to learn from previous mistakes and frustrations – what can be done to develop a contractual position that attends to key service needs while presenting opportunities for efficiency in delivery?

By deploying a more forward thinking, proactive, and flexible approach, the competing pressures being faced by councils can be approached head on to achieve efficiency, sustainability, and value for money.

Understanding options

With many council contracts at, or close to the end of their term, fundamental questions are being asked. In the case of long-term private finance initiative (PFI) contracts (25+ years) many councils are unsure where to turn and how to manage complex end of contract provisions.

Naturally, where contract management has been the focus for several years, a continuation of outsourced service provision may be assumed to be the best option. However, this may not be the case – a detailed options appraisal across service delivery options is the first stage in understanding what the future of service provision should look like. Alternative models such as in-house provision or partnership working may offer better value and / or opportunities for service improvement. An early assessment of all available options can provide assurance that the direction of travel is the right one.

Procurement planning with purpose

Where procurement of an outsourced contract is identified as the best solution, the key to success is allowing sufficient time. With timelines typically stretching from around 12 months to procure simpler offtake arrangements to three years for planning and procurement of collections contracts (from initial approval to go-live), and even longer for infrastructure related contracts, early planning and direction is essential.

A full review of service requirements, considering key areas of improvement and attending to existing frustrations, will allow contract documentation to be developed clearly and in response to service needs and priorities.

Collation of accurate data on current services configurations, including property / collection types, frequency of collection, and containers in operation, is key to allowing a procurement to run efficiently and the price contractors quote at tender stage being the price the council pays in contract. Early commencement of the data collation exercise is essential.

Where infrastructure is being handed over, either to a new provider or to the council, an early understanding of hand back requirements is key, supported by close engagement with the outgoing provider to ensure mutual understanding of obligations.

Market engagement and innovation

Engaging with the market early can help with unlocking innovation. Services should be benchmarked against best practices, lessons should be gathered from both successful and failed procurements and contracts, and options should be explored with potential service providers to understand levels of interest and key areas of risk and opportunity.

In addition to mitigating the risks associated with ensuring interest from potential bidders, this will support the setting of realistic, acceptable, and achievable KPIs and consideration of technological solutions and approaches that may drive efficiency and environmental performance.

Flexibility and realism in contract design

Rigid contracts can deter bidders and stifle innovation. Instead, a flexible procurement approach should be adopted. Councils must also be transparent about what they want from services, providing certainty to bidders and reducing ambiguity that can lead to procurement delays or in-contract disputes or underperformance.

Risk apportionment should be fair to both council and contractor while ensuring that the council is not exposed to unacceptable levels. A robust performance management framework is essential, requiring the setting of clear, realistic KPIs and ensuring mandatory reporting mechanisms are in place. Where risk sits with contractors, performance deductions must be commensurate with anticipated costs incurred to avoid ‘risk pricing’ which leads to inflated contract costs. Such a balanced approach fosters collaboration and long-term value, starting as you mean to go on with a partnering approach to service delivery.

Resourcing and support

However it is approached, effective procurement requires dedicated resources over extended timeframes. Whether managed in-house or with external support, councils must commit the time and expertise needed to navigate complex procurement landscapes. This investment pays dividends in the form of better contracts, stronger partnerships, and improved service outcomes.

Conclusion: Procurement as a strategic lever

Municipal waste services procurement is no longer just about compliance - it’s about shaping the future of local services.

By planning ahead, engaging with the market, and designing flexible, outcome-focused contracts, councils can turn procurement into a powerful tool for sustainability, innovation, and community value. The challenge is real - but so is the opportunity.