Getting Better Performance, Pricing and Value from Service Contracts

by the City of Vaughan, Ontario, Canada for the TLG 2019 Innovation Showcase program

Dec 19, 2018

Theme: Reality Focused, Results Driven

The City of Vaughan has developed exciting innovations in the procurement and delivery of major service contracts. Introduced in 2016, these innovations were designed to optimize performance, costs, and citizen satisfaction, and have proven successful in the City’s Winter Road Maintenance (WRM) contract, which has completed its second season, and the Solid Waste Collection (SWC) contract, which began in January 2018.

Innovations include: 

• Using a consultative instead of prescriptive procurement approach to leverage the market’s expertise on how best to deliver services. 

• Using a Fairness Monitor (FM) to oversee procurement of service contracts, where FMs have traditionally only been used to oversee design and construction projects. 

• Aligning of the contract length to equipment lifecycles to better reflect actual costs and risks. 

• Using incentives and disincentives to manage contractor performance. 

• Sharing responsibility for citizen satisfaction with the contractor. 

• Embedding change management into the contract to enable the City and vendor to partner on efficiency improvements. 

To date, improvements to performance, costs and citizen satisfaction have been clear. The new SWC contract saved the City $1 million.  For the WRM contract, the City saved over $200,000 per year and citizen complaints have dropped significantly due to contractors being more focused on delivering citizen satisfaction. The City of Vaughan’s proven success with its innovative approach to contract procurement is applicable to all municipalities for any type of service or operating contract. 

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