MPS network hardware standardisation

Report: 16
Date: 8 June 2009
By: Director of Information on behalf of the Commissioner

Summary

This report recommends proceeding to an open tender for the selection of a corporate telecoms network hardware vendor(s) and the award of a framework agreement(s).

A. Recommendations

That

1. Authorisation be given to proceed to tender for the selection of one or more corporate network hardware equipment, software and professional service providers to meet the increasing demand for our voice and data telecommunications network and data centre requirements

B. Supporting information

1. The MPS has an opportunity to simplify the procurement of network infrastructure equipment and services and leverage improved discounts through economies of scale.

2. Based upon current capital budgets and known approved business cases it is forecast that the MPS will spend in the region of £15-20m on network hardware over the next 4 years. [1] This number could exceed £25m should other initiatives such as network collaboration with other GLA members come to fruition.

3. Based on market research and analysis, a new framework agreement will provide more favourable and consistent discounts than would be obtained from ad hoc negotiations or purchases from the OGC Catalist route. For example our investigations have shown that for one supplier of network hardware to the MPS we would have saved in excess of £500,000 over the last three years had a framework agreement been in place. It could also be capable of adoption by the GLA group organisations.

4. Any framework agreement with a preferred equipment vendor will not be exclusive so will not preclude the MPS from purchasing hardware or services from an alternative provider should this be required or be more financially beneficial. Establishment of framework agreement (s) will still allow existing Catalist routes to procure network equipment, open tender or use of the Capgemini ICT Services Agreement, whilst reducing the time and cost to procure.

5. The establishment of corporate standards for network hardware will facilitate consistency in network design and operational support.

6. Other procurement options considered:

1. The MPS could continue to purchase network hardware on an ad hoc basis via an open tender however this is inefficient both from a technical and commercial perspective.
2. Network hardware can be provided by Capgemini as part of a solution. However, as no compliant tender process has been competed by the MPS for the selection of a standard hardware vendor this is not valid for ad hoc purchases of equipment.
3. OGU Catalist: There is not a category solely for the purchase of network hardware in Catalist. Public Contract Regulations prevent the MPS from specifying a particular technology type or supplier, and so has similar restraints to those mentioned in (ii) above.

7. This initiative intends to issue an OJEU notice for two lots, (voice network equipment and data network equipment) using the Restricted Procedure. It is envisaged that each lot will be will be awarded to a single vendor, although the same vendor may also awarded both lots. The award of a four year framework agreement will be to agreed discount levels for network equipment, professional services, support and financial options. The tender process is expected to start in July 2009 and be awarded in December 2009. (Subject to MPS and MPA approvals).

8. Most of the initiatives that require network infrastructure are managed by DoI such as the Real-Time Communications programme, Project Eagle (data centres), and the 2012 Olympics. However, as other Operational Business Groups such as SO may have their own network infrastructure requirements, the Business Managers they have been engaged to ensure all requirements are captured.

9. In addition to those specifically stated in this document, resource implications have been assessed in consultation with a panel drawn from various business groups

Environmental considerations

10. Ensure all new ICT equipment including printing devices, personal computers, computer monitors, laptops, workstations and servers meet or exceed the energy star rating and best practise specifications

C. Race and equality impact

There are no specific race and equality impacts arising from this report.

D. Financial implications

There is no direct spend or financial commitment associated with this initiative. This initiative will only select the corporate standard and put a framework agreement in place to allow future purchases. Any project wishing to purchase network hardware under these framework agreements will need to obtain their own financial approvals via the normal route.

As mentioned in Section B2, the MPS is forecasted to spend in the region of £15-20m on network hardware over the next 4 years which could increase by up to 25% should other initiatives such as network collaboration with other GLA members come to fruition.

The actual discounts that will be secured via a framework agreement will vary depending on the vendor(s) selected, and factors including the competitiveness of their list price, currency fluctuations, [2] distribution model, spend thresholds and product mix, however, if using the supplier referred to in Section B3 as an example, the MPS would expect to secure a standard minimum discount structure between 5-12% above the standard public sector discount level.

An estimated spend of £10-15,000 will be required for external legal support when negotiating the framework agreement. This will be funded from existing budgets.

E. Legal implications

Appropriate external legal advice will be obtained on the tender process and any subsequent framework agreement

F. Background papers

• None

G. Contact details

Report author: Michelle McMahon, Procurement Services, Directorate of Resources

For more information contact:

MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18

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