Programme for re-tendering the services delivered through the current outsource contracts

Report: 12
Date: 24 October 2002
By: Commissioner

Summary

The aim of this report is to inform the Committee of the programme for re-tendering all those services currently delivered to the MPS through the ten main outsource contracts; the estimated resource requirements; and the outline procurement milestone plan.

A. Recommendation

That

1. Members are asked to approve the proposed programme; and
2. Members are asked to approve the request to issue an OJEC notice for expressions of interest for the appointment of consultants to assist with the re-tendering programme in the linked exempt report.

B. Supporting information

Introduction

1. At its meeting on 18 April 2002 the former Finance, Planning and Best Value Committee approved the proposed strategies for renewing the ten existing outsource contracts in the MPS – (paper reference FPBV/02/70 (exempt) refers). Since then further work has been undertaken in developing a re-tendering programme and in identifying the resource implications. A Steering Group has been established to oversee and direct the activity and to ensure that the lessons learnt from the previous exercise have been factored into the current work. Due account has been taken of previous FPBV decisions, but these have been amended to reflect the changing circumstances but in agreement with the Directors concerned.

2. The Director of Procurement Services (PS) has held a series of bi-lateral meetings with each of the four MPS Directors currently responsible for those services delivered through the outsource contracts (the Directors of Information, Property Services, Finance & Transport). Each of these Directors has established an Action Group to take forward the actual delivery of the programme in their respective areas. It has been agreed that the major priority for the MPS should be to ensure that, as far as possible, an appropriate information & communications technology (ICT) service delivery structure is in place to support the C3i service.

Contractual issues

3. There are however contractual issues that need to be considered in phasing the re-tendering programme and these are covered in the linked exempt paper to be considered at this meeting.

Proposed phasing programme

4. The re-tendering programme is detailed in Appendix 1 of the linked exempt report at agenda item 18. It allows a two-year period for the re-tendering of each service package and around a six month transition period from the award of new contracts to the expiry of the current contracts – with or without any extension period. These periods will be adjusted as experience is gained. There are critical points at which contract extension negotiations with suppliers must commence. In some cases the procurement process starts before these dates so we will need to have developed and communicated our strategy to those suppliers before any OJEC advertisement is placed for these services.

5. In preparing the current iteration of the programme account has been taken of the point at which the necessary approvals are likely to have been given; and that the resources are in place to enable the programme to commence. For example, it is essential to commission an external firm of consultants to provide the range of expertise the programme and project managers will need to call upon – see paragraphs 8-10. All the necessary approvals and award of contract must have been made for the programme to commence by first quarter of 2003 if there is to be no adverse impact on the overall programme.

Financial and resource requirements

6. Financial provision to meet the cost of the re-tendering programme – covering both internal and external resources – has already been reflected in the MPS medium term financial plan (MTFP) and full details are provided in the linked exempt paper.

7. Each department involved in the re-tendering programme has set out, in broad terms only at this stage, the additional internal and external resources they will need. The estimated cost of the internal resource requirements are reflected in the linked exempt paper.

8. There is an early need to commission a firm of consultants to provide a range of expertise to assist the programme and project managers. External consultants are essential given the breadth and depth of expertise required to ensure a successful outcome. The skills required include formulation of outsourcing strategies across a range of service delivery areas and the development and delivery of a procurement strategy to deliver quality VFM contracts. The consultants will be required to work with clients, on each of the existing outsourced contract areas to help:

• define the strategic approach – consulting with Members as appropriate;
• define the requirement;
• design service packages;
• test the market;
• develop performance monitoring procedures;
• identify and measure benefits;
• develop service specifications; and
• manage the contracting process.

9. It is a stated aim of the Steering Group that there will be an explicit requirement for the appointed consultants to have a clear programme of skills and knowledge transfer to the MPS as the process progresses. This should result in the development of more rigorous MPS client units for the future management of service delivery. It is therefore hoped to gradually reduce the involvement of the consultants. In addition, the provision of legal and TUPE advice will be necessary at appropriate stages in the programme. These specialist requirements have still to be fully identified and refined.

10. As all these contracts will have an estimated value over the EC threshold of £154,477 for the provision of services, an advertisement is to be placed in the Official Journal requesting expressions of interest. The recommendation for award of contract will be placed before the Finance Committee in due course.

11. Costs for the original outsourcing exercise are contained in the linked exempt paper however it should be noted that during the original exercise the MPS was awarding new contracts only; this time around we will be awarding new contracts, closing existing contracts, managing migration from one service provider to another, addressing secondary TUPE issues and, possibly, bringing some services back in-house. At this stage therefore there is some question over the adequacy of the funding allocated.

High level procurement milestone plan - Up to Sept 2005

12. The chart at Appendix 1 reflects the strategic procurement process that will be required for the re-tendering of each of those services currently delivered through the existing outsource contracts. This is a generic model at present but serves to demonstrate the activities and time-scale required for each contract under consideration. Specific programme plans will be developed once the skills and resources are in place.

C. Equality and diversity implications

Before any recommendation for a contract to be awarded is made to the Authority, the equal opportunity and diversity policies of the prospective contractors are rigorously examined to ensure transparency and that the promotion of equality of opportunity is evident. 

D. Financial implications

The financial implications are discussed in the linked exempt report.

E. Background papers

FPBV/02/70 (Exempt)

F. Contact details

Report author: Steve Atherton, Procurement Services, MPS.

For more information contact:

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

Send an e-mail linking to this page

Feedback