, Britain
On the last Tuesday of February 2018 the depot manager at a household waste contractor in Derby stood in the yard at half past five in the morning and made the only sensible decision available. The estates were untreated, the wind was moving the snow back across the roads faster than anything could clear it, and a refuse vehicle is twenty-six tonnes of lorry that stops when it decides to.
The crews were sent home on pay. That happened again on the Wednesday, and on the Thursday, and by the time the rounds were running properly again the better part of a working week had gone.
Nobody in the business thought this was anybody's fault. That is not the same as saying it did not count.
The snow stopped the work and nothing else stopped
The cold spell of late February and early March 2018 came from the east and met a storm coming up from the south west. Snow fell across most of the country, drifted badly in open ground, and stayed for days because the temperature did not rise. The Met Office issued its most serious warnings for parts of Britain. Schools closed, roads closed, and household waste collections stopped across a large part of the country for about a week.
For a collection contractor, a week of not collecting is not a week of not spending. The crews are employed and mostly salaried. The fleet is on finance or contract hire and the payments run whatever the weather. The depot, the workshop, the transport manager, the insurance and the operator's licence are all fixed. Roughly the only cost that falls when the wagons stay in the yard is diesel.
Meanwhile the waste does not stop being produced. It accumulates on the kerb, in the back garden, and in the bins that were already full on the day the snow started. What is waiting on the following Monday is not one week's rubbish, it is two, and a lot of it is not in the bin because the lid would not shut.
Catching up costs money the contract does not pay for
Recovery in a waste contract is always more expensive than the failure. A missed round has to be collected in addition to the rounds that were already scheduled, so the catch-up is done with overtime, Saturday working, agency loaders and hired-in vehicles, all at premium rates and all for several weeks.
It is also slower per property than a normal round. The bins are heavier and fuller. Side waste is everywhere, and most councils relax their side waste rules after disruption because the alternative is a fortnight of complaints, which is the right call for residents and another cost for the contractor. Vehicles fill sooner, which means more trips to the transfer station and more time driving rather than collecting. Snow still lying on estate roads and in cul-de-sacs keeps the vehicle out of streets it would normally get down.
None of that is paid for. A household waste contract is typically priced on a specification: a number of properties, a frequency, a set of streams, for a monthly sum. The contractor carries the cost of delivering it. Doing the same work twice as expensively in March does not produce a bigger payment in April, and the payment mechanism in most contracts has no line for weather.
Whether snow excuses the failure at all depends on the wording. Contracts of this kind usually contain a relief or excusing clause, and the bar in it is normally set high, because Britain has weather every year and the client's lawyers know it. Relief from liquidated damages is not the same thing as being paid for the recovery, and a contractor who assumes the first will bring the second has not read the payment mechanism recently.
The number is missed collections and it is cumulative
A contract of this size is not judged on impressions. It is judged on a rate, and the rate is missed collections as a share of collections due, usually expressed per hundred thousand. That is the only sensible way to measure a service that lifts millions of bins a year, and it has one uncomfortable property: a bad week is still in the denominator and the numerator for as long as the measurement period runs.
The mechanism that follows is standard. While the rate sits above the threshold written into the contract, service credits or liquidated damages are deducted each month. If it stays above the threshold for a defined run of consecutive months, the client can serve a default notice, and a default notice is the first step on a path that ends in termination. For a contractor whose whole business is one municipal contract, that path has only one destination.
The pressure this creates is the interesting part. The rational response to a bad month is to spend heavily on catching up, which protects the number and destroys the margin. The rational response to a bad quarter is to spend more. A contractor can hold its service level perfectly and lose the contract anyway, by running out of money doing it.
Your customer is also the referee
The other thing about a municipal contract is that the council sits on both sides of it. It is the client that pays the monthly sum, the monitoring authority that counts the misses, the body that decides whether a relief event applies, and the organisation whose councillors have spent three weeks answering telephone calls from residents whose bin has not been emptied since February.
So the April committee is not a technical meeting. Officers present the performance figures for the quarter, the contractor's explanation sits in an appendix, and elected members who have their own postbags decide how much of it they accept. A contractor arriving with a clear record of what was collected when, what was recovered, what it cost, and what has been put in place for next winter is in a different position from one arriving with an apology.
The relationship matters beyond the meeting, because the contract will be re-let one day, and a client's memory of how a supplier behaved in a bad month is the most durable thing in procurement.
Where this shows up in the game
Nineteen Thousand Bins puts you in charge of a household waste contractor in Derby in March 2018, in the weeks after the snow, and runs for a year. It is marked Medium, which makes it the most approachable of the contract scenarios, and it starts you with no special handicap beyond the six days of lost rounds that have already happened.
Those six days are charged to you in month one with the crews paid, and the recovery is yours to fund: overtime and hired-in vehicles cost money the contract does not reimburse. Liquidated damages are deducted every month the missed collections rate sits above the contract threshold, and if the rate stays above it for three consecutive months a default notice is served. You are scored on trading profitably for nine of the twelve months, which is a blunter measure than the service level the contract is really written on, and the tension between the two is the point of the scenario. The page for Nineteen Thousand Bins sets out the figures you start with.
The seed is fixed at 600018, so every attempt meets the same Britain, the same weather and the same council, and the scores can be compared. It runs under ironman rules: one save, and what happens happens.