MPS information strategy – requirement for a call-off consultancy contract

Report: 19
Date: 10 April 2003
By: Commissioner

Summary

In order to deliver the MPS Information Strategy the Directorate of Information (DoI) needs to source skills from the external market place. The need to buy in external skills has already been factored into the DoI’s medium term forecasts.

To enable the DoI to have the required skills available and in consultation with Procurement Services it is recommended that a call-off contract be let through a competitive procurement exercise using the OJEC procurement process. This paper seeks authority to issue an OJEC notice for this requirement and the committee will be requested at a later meeting to sanction award to the chosen supplier.

A. Recommendations

That

1. the need of the Directorate of Information to contract external resources to implement the Information Strategy be endorsed; and
2. in order to have access to such resources, Procurement Services be authorised to initiate a competitive tendering exercise, under OJEC to award a three-year contract for consultancy support.

B. Supporting information

Background

1. In September of 2002, the Authority confirmed its continued support for the implementation of the MPS Information Strategy and noted the overall budgetary implications of that decision. Consistent with the Authority’s standing orders, the Directorate of Information (DoI) were advised by Procurement Services to return to the Finance Committee for approval in advance of contractual action in excess of £1m.

2. In line with that agreement, Procurement Services on behalf of the DoI now needs to initiate a competitive procurement for a call-off framework contract that will provide the DoI with the external skills required to support of the delivery of the Information Strategy.

Why a call-off contract is necessary

3. In essence, the problem faced by the DoI is that demand for new services from the business, as reflected in our programme of work for 2003/04, far exceeds the capacity of our in-house resources to deliver. To illustrate this, Table 1 below compares our forecast workload for 2003/04 against that of 1998/99 (the year immediately prior to outsourcing).

Table 1 – Forecast workload for 2003/04 against that of 1998/99

4. Although the workload in terms of projects in 2003/04 has remained about the same, the number of project staff has halved. Even though the project programme is now organised to make optimum use of in-house resources, there is nevertheless still a discernable gap between the business demand and the ability to supply.

5. In terms of development, the 2003/04 programme is driven by the Information Strategy, which requires specialised technical skills that are best sourced externally.

6. To address the shortfall and meet the technical requirements, the DoI favours having the ability to go to the external market and place a call-off contract with a supplier to fulfil the requirement, as opposed to seeking an increase in the number of permanent staff. The main advantages of this approach are:

• Supply can be matched to demand – the ‘tap’ can be turned on and off as required.
• Work can be packaged and let against set deliverables.
• Specialists can be engaged at short notice for fixed periods.
• There are no overheads such as recruitment and training.
• Skills are transferred to in-house staff.
• There is no need to manage multiple, external suppliers.
• Volume discounts can be negotiated.

Procurement

7. The tendering process will be lead by Procurement Services who will issue the OJEC Notice, collate the expressions of interest, prepare and issue the Invitation to Tender and manage, in partnership with the Directorate of Information, the evaluation process. Once the evaluation process is complete, the Committee will be asked to sanction the subsequent award of contract.

8. The contract will be let on the basis of the technically most compliant tender with due regard to costs. Subsequent and on-going monitoring will ensure that value for money is maintained. This will be achieved through the periodic benchmarking of rates payable to ensure that they are in line with comparable market rates.

C. Equality and diversity implications

1. The contractor’s approach to equality and diversity will be explicitly tested during the tender process. The contractor’s staff will be governed by the same rules and guidelines as permanent employees with respect to behaviour and the needs of special groups. The staff of DoI work closely with the Occupational Health Directorate of the MPS to ensure the needs of any individual can be accommodated.

D. Financial implications

1. With respect to cost, the capital and revenue forecasts of the Information Strategy for the next three years have been calculated on the basis that between £6m and £8m per year will be needed to pay for external skills and resources. For information, this figure was derived form the estimate put forward by Accenture in the original Information Strategy report of January 2001.

2. The overall value of the contract is of course dependent upon the level of resource called off and the discounts that can be negotiated by Procurement Services. For planning purposes and over the 3 years of the contract the estimated contract value is calculated at £21m.

3. For completeness, the DoI’s medium term forecast for the Information Strategy as agreed with Corporate Finance is set out in Table 2.

Table 2 – Medium term forecast

E. Background papers

None.

F. Contact details

Report author: George Corral, Information Strategy Programme Director, MPS.

For more information contact:

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

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