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

Report: 14
Date: 22 April 2004
By: Commissioner

Summary

This report informs the Committee of the status of the programme for re-tendering all those services currently delivered to the MPS through the existing main outsource contracts and summaries of the sourcing and packaging strategies for Pay and Pensions Services and Transport Services are contained in the Appendices 2 and 3 for information.

A. Recommendation

That Members note the status of this ongoing programme.

B. Supporting information

Programme progress report

1. This paper provides updated information regarding the Outsource Services Programme since the last progress report to the Finance Committee on 18 December 2003.

Contractual issues update

2. Previous reports to the Finance Committee highlighted the completion dates and contractual extension options for all existing contracts, including the need for activity involving strategic reviews of existing contracts, their performance and how existing services should be packaged in the future.

3. In addition, details were provided of the forecast timescales to undertake the above activity along with the subsequent re-tendering. The need was identified for a phased programme to ensure the process is manageable. Provision of extensions would be subject to approval on an individual basis and where extensions to the existing contracts were agreed, the opportunity would be taken to extract value and deliver benefit to the MPS.

4. Subsequent to the report dated 10 July 2003, a number of contract extensions have been agreed and preparatory work has been carried out to extend a number of the additional existing contracts.

Direct labour and facilities management

5. The recommendations in the two exempt papers to the 20th November 2003 Finance Committee have now been implemented with services now being provided under the new contracts as previously explained.

Pay and pensions

6. An exempt report to the Finance Committee on 23 October 2003, recommending the award of a seven-month extension to the existing contract, was approved subject to the resolution of one outstanding issue within parameters agreed by the Committee. An extension has been contractually finalised as per the recommendation of the October paper including resolution of the outstanding issue.

ICT

7. Detailed negotiations are continuing with each of the existing ICT outsource service providers regarding the agreement of contract extensions. The focus of these negotiations is on securing best value for the MPA from the existing service arrangements. Consultation has been carried out to identify possible changes and improvements to services that the MPS will seek to obtain as part of any extension agreement. A series of draft variation notices and other relevant legal documentation have been produced and will be built upon to reflect the outcome of the negotiations. A series of reports seeking approval for extensions are planned to be forwarded to the Finance Committee at the appropriate time.

Resource position

Internal recruitment

8. The recruitment of dedicated programme staff continues and, in the meantime, interim staff have been sourced to fill a number of the vacancies to ensure the continued progress of the programme.

Consultancy support

9. Consultancy support has been in place since September 2003. Expenditure is in line with budgeted targets for the programme as indicated in the linked Appendix 1 (Exempt).

Programme activity

ICT sourcing strategy

10. A paper ‘ICT Sourcing Project- High-level Packaging Strategy’, reviewing and building upon the original ‘ICT Sourcing Strategy’ paper was presented to the Outsource Contracts Steering Group in November 2003 and approved. In light of the importance of this strategy to the MPA, it was presented and approved by Management Board on 18 December 2003. The strategy was subsequently presented to the Co-ordination and Policing (COP) meeting 24 January 2004 in a paper entitled ‘The Future Procurement of Information and Communications Technology Outsourced Services’ and was approved.

Individual service areas

11. A Sourcing and Packaging strategy for the provision of Pay and Pensions Services has been produced and approved at the interim OCSG meeting on 5 January 2004 – a summary is at Appendix 2 (exempt). A Sourcing and Packaging strategy for the provision of Transport Vehicle Repair and Maintenance and Equip for Service services has been approved at the interim OCSG meeting 12 February 2004 – a summary is at Appendix 3 (exempt). Work has commenced on the creation of a future sourcing strategy for Property Services that will be finalised in the coming months.

OJEU notices

12. Based on the approved Sourcing and Packaging strategies for ICT and Pay and Pensions, two OJEU notices were despatched for publication in the appropriate EU journal. The OJEU notice for Pay and Pensions services was despatched on 6 February 2004 and published on 14 February 2004. The OJEU notice for an ICT Core services provider was despatched on 9 February 2004 and published on 17 February 2004. Bidders conferences for both notices were held during week commencing 23 February 2004. An OJEU notice, based on the approved Sourcing and Packaging strategy, for Transport Vehicle Repair and Maintenance and Equip for Service services was despatched on 22 March 2004. A bidders conference for Transport Services will be held on 16 April 2004. Further OJEU notices for ICT and PSD will be despatched in the future. Requests for approval to issue appropriate OJEU notices have been sought in line with MPA regulations by use of the quarterly paper to the MPA Finance Committee outlining the procurement activity over the next 12 months (Regular exempt reports to Finance Committee entitled ‘Routine Contracts Programme’).

C. Race and Equality impact

1. There are no direct diversity and equal opportunity implications related to this report.

2. Consultation processes with MPS staff with regard to future requirements are ongoing for each of the work streams. A briefing process has been agreed with trade union representatives with a representative attending relevant meetings in each work stream and bi-monthly briefing meeting continue to be held between the programme director and relevant trade union and staff association representatives.

D. Financial implications

A revised version of the original budget forecast has been produced and approved to reflect the latest known plans. Expenditure for 2004-5 has been included in the Procurement Services budget and the overall forecast in the Medium Term Finance Plan revised to reflect the latest known and forecast costs. An overview of expenditure incurred against the Medium Term Finance Plan for the period up-to the end of January 2004 is available at Appendix 1 (exempt).

E. Background papers

• Report to Finance Committee – 10 July 2003 entitled ‘Appointment of Consultants to support the Outsource Services re-tendering programme and the Procurement Business Process Improvement Programme’
• Report to Finance Committee – 23 October 2003 entitled ‘Property Services Outsource Contracts and Commercial Strategy beyond their Initial Expiry Date of 1 January 2004’

F. Contact details

Report author: Steve Atherton – Director, Procurement Services, MPS.

For more information contact:

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

Appendix 1, 2 and 3

These appendices are exempt

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