Purpose

This report seeks approval to award contract for Postal Goods and Services following tender process led by the Government Commercial Agency, utilising its Aggregation Service under Framework RM6280 Lot 2 (Postal Goods and Services).

The contract award will be for a period of five years, with an estimated total value of £4,250,000 to commence September 2026 when the existing contract with Royal Mail expires.

Decision

For the reasons set out in the report and its appendices, the Corporate Director of Resources and Section 151 Officer is recommended by the Chair of SCB to:

1. agree to directly award a contract called off under the Government Commercial Agency (GCA) Postal Services framework RM6280 Lot 2: Collection and Delivery of Letters, Large Letters and Parcels within UK; for the provision of Postal Goods and Services for a term of 12 months with an option to extend the call- for an additional 6 months to the supplier and for a maximum contract value stated in the Part B report.

Note: The details of the supplier who has been awarded the call-off contract will be released following the award decision.

Reasons for the decision

A failed tender process which was in line with the approved strategy has led to the need for the direct award from the framework.

There is a statutory requirement to post out parking fines, electoral, planning applications and other ad-hoc business services.

Local authorities depend on physical post to deliver vital information and communicate with residents and businesses where digital services are not currently available. The Council’s mailroom has franking machines, folder inserters and has a centralised post room to make mailing processes as cost efficient as possible.

This consortium procurement of London boroughs provides the cheapest cost of postal services, cheaper than currently available at fulfilment (print/post) houses. This collaborative approach enables participating local authorities to aggregate requirements thereby achieving better value through economies of scale.

There is an ongoing requirement for the postage and delivery of mail and parcels and a replacement contract is required for the current contract expiring on 13 September 2026. The new contract is anticipated to commence on 14 September 2026 to ensure continuity of service and maintain discounts for postal services

Alternative options considered

OPTION 1

Option

Direct award – via framework direct award / call-off

Feasibility

Is this option deliverable within time, resource and legal constraints?

• Timescales: Can this option be delivered within required deadlines (including approvals, standstill if relevant, mobilisation, and any notice requirements)?  Yes
• Legal/procurement constraints: Is the route compliant (e.g., framework rules allow direct award; if framework exists, is mini?competition required/optional; if competing, is the procurement route viable within time)? Yes, this is a compliant route to market
• Market / supplier availability: Are capable suppliers available and able to mobilise? If “sole supplier,” state why others can’t meet requirements. No other supplier has the spread and reach to deliver on the full requirements
• Council capacity: Does the Council have internal capacity/capability to manage transition? Yes
• Service continuity / transition risk: What is the risk of disruption if supplier changes (banking/software migration, data transfer, TUPE, operational cutover)?
• Non-financial constraints: Any statutory deadlines, grant conditions, security/safeguarding constraints.

Benefits and Drawbacks

The major risk is lack of competition in the market.

This will be mitigated by direct award via a compliant framework to ensure continuity of service, reduced transition cost, and speed of delivery for a short-term contract period to allow the collaborating authorities to revise requirements and approach the market again.

Overall Assessment

Recommended:  Continuity of service sourced through a compliant route to market

OPTION 2

Option

Tender / open competition – run a compliant competition now.

Feasibility

Is this option deliverable within time, resource and legal constraints?

• Timescales: Can this option be delivered within required deadlines (including approvals, standstill if relevant, mobilisation, and any notice requirements)? No
• Legal/procurement constraints: Is the route compliant (e.g., framework rules allow direct award; if framework exists, is mini?competition required/optional; if competing, is the procurement route viable within time)? No

Benefits and Drawbacks

Advantages

• Would provide open competition and potentially increase market engagement.
• May identify alternative delivery models or commercial innovations.

Disadvantages

• Insufficient time available before expiry of the current contract on 13 September 2026.
• High risk of service disruption to statutory postal services.
• Additional procurement, evaluation and mobilisation costs.
• Previous collaborative competition received only one bid and was ultimately abandoned.

Overall, this option does not provide a deliverable solution within the required timescales and presents significant continuity risks for critical Council services.

Overall Assessment

Not Recommended. There is insufficient time to undertake a compliant competitive procurement and mobilise a new provider before the expiry of the current contract. This option would place continuity of statutory postal services at significant risk.

OPTION 3

Option

Do nothing / defer – accept the impact, stop/reduce service.

Feasibility

• Timescales: Not applicable. Service would cease on expiry of the current contract.
• Legal/Procurement Constraints: Failure to maintain postal services would impact the Council's ability to meet statutory obligations relating to parking enforcement, planning and electoral services.
• Market / Supplier Availability: Alternative arrangements could not be implemented in time to avoid service interruption.
• Council Capacity: The Council could not absorb postal delivery functions internally.
• Service Continuity / Transition Risk: Extremely high risk of service failure and inability to issue statutory correspondence.
• Non-financial Constraints: Potential legal, operational and reputational consequences arising from failure to meet statutory obligations.

Benefits and Drawbacks

Advantages

• No new contractual commitment.

Disadvantages

• Loss of statutory postal services.
• Failure to issue parking, electoral and planning communications within required timescales.
• Significant legal, operational and reputational risk.
• Loss of discounted postal rates and established service arrangements.
• Potential impact on residents, businesses and Council services.

This option would be unacceptable due to the critical nature of the postal service requirement.

Overall Assessment

Not Recommended. Doing nothing would result in the loss of a critical statutory service from 14 September 2026 and expose the Council to significant operational, financial and legal risks.