Approval To Issue “Invitation To Negotiate (ITN)” Documentation For The Re-Tendering Of Ict Core Services

Report: 16
Date: 22 Jul 2004
By: Commissioner

Summary

This report informs the Committee of the current status of the re-tendering activity for the Information and Communications Technology (ICT) core service supplier and seeks the Committee’s approval to issue the “Invitation to Negotiate (ITN)” documentation to a qualified short-list of bidders.

A. Recommendation

1. Members approve the issue of the “Invitation to Negotiate (ITN)” documentation for the procurement of ICT core services to a qualified short-list of bidders.

B. Supporting information

Background

1. The MPS undertook a series of procurement exercises during 1998 – 1999 that resulted in the award of 11 contracts to outsource support services previously provided in-house. These services were in the areas of information and communications technology, transport, pay and pensions and facilities management. The ICT services currently provided under the five existing agreements are:

2. Given the long lead-times required for re-tendering such contracts, work commenced in 2002 to develop a strategy to re-examine the sourcing requirements for these services. During 2002, the Finance Committee approved the MPS’s proposed strategy and gave its approval for the following:

• The creation of a dedicated programme managed within Procurement Services to undertake the review of the sourcing requirements for these services and the re-tendering of the contracts – this is known as the Outsource Services (OS) Programme
• The appointment of external specialist technical consultancy and legal support for this work
• The appointment of dedicated MPS staff for the OS Programme
• The indicative timetable for this re-tendering activity
• The extension of existing contracts where necessary to facilitate the re-tendering process and to ensure the safe transition of services to new suppliers (subject to individual MPA approval for each proposed extension). Details of extension activity and recommendations for extensions for the five existing ICT contracts are contained in separate open and exempt papers submitted for approval to this meeting.

3. A strategic approach was developed to clearly set out the high-level aims and objectives for the OS Programme which was approved by the MPS Management Board on 23 September 2003. A copy of this strategic approach has also been submitted to this meeting of the Finance Committee to note alongside this report. Subsequent OS Programme and workstream strategies draw upon the recommendations articulated within this report.

Market Engagement, Scoping and Strategy

4. The ICT workstream within the OS Programme undertook a comprehensive consultation process to determine the scope and service levels for the sourcing and packaging strategies that should be adopted to achieve the objectives for the next generation of ICT contracts. This involved MPS senior stakeholders, user representatives from across the organisation, and some external market research facilitated by Partnerships UK. Views were sought on packaging, transition, transfer of data, contract duration, staffing / TUPE issues, attractiveness of the potential deal, market trends and current best practice. The Sourcing strategy was approved by the Outsource Contracts Steering Group (OCSG), chaired by the Director of Resources, on 23 May 2003. The Packaging strategy was approved by the MPA Co-ordination and Policing Committee on 23 January 2004.

5. The high level scope of the ICT sourcing and packaging strategies is as follows:

• A single prime supplier should be sourced for the delivery and support for voice, data and application services (the “core” services - covering the services currently provided by Atos Origin, Damovo and EDS)
• The creation, through a separate competitive tendering exercise, of a framework of qualified suppliers to provide development and implementation services for future ICT application and infrastructure requirements. This procurement exercise is planned to commence in the autumn of 2004 and will be subject to separate MPA approval at the appropriate time
• Separate competitive tendering exercises will be held for Radio and Command and Control services (the services currently provided by NTL and Unisys respectively) once C3i implementation has been safely completed (currently projected to be in 2006/07) with the possibility that these could be included within the “core” services package subject to the core services provider proving they have the capacity and the MPA will gain VFM.

6. The ICT strategies have addressed a number of lessons learnt from the previous outsourcing exercise with the result that the new core service package will aim to rectify the following issues:

• Problems have been caused by a failure to join-up services and a lack of co-ordination between suppliers
• Weak business continuity arrangements
• Unclear incentives for achieving VFM
• Because of the difficulties of managing a number of key suppliers, the MPS focussed on non-strategic issues rather than core business needs.

7. The new ICT service approach will provide greater benefits to the user in the following ways:

• Provide a higher quality first line support service
• Respond to user issues in a way that is more attuned to user needs
• Offer an integrated interface with a range of ICT support services.

Procurement Approach

8. The procurement route adopted for re-tendering the services within the scope of the OS Programme is the standard European Union (EU) “negotiated” route. This approach was approved by the Director of Procurement Services, having consulted with the MPA Deputy Treasurer and taken legal advice. This was endorsed by the OCSG on 23rd January 2004.

9. Members should note that the MPA’s standard approach to procurement is to follow the EU’s “restricted” procurement route that involves the issue of an “Invitation to Tender” (ITT). This is used when the exact requirement of the products/ services being tendered is known precisely in advance. The MPA Contract Regulations have been drafted with this in mind and consequently they refer to the ITT throughout. Having taken advice from the Director of Procurement Services, the Deputy Treasurer of the MPA and the programme’s appointed legal advisers, it has been agreed that references in the MPA Contract Regulations to the ITT equally apply to the ITN in the OS Programme.

Qualification Phase

10. An OJEU notice for the provision of an ICT Core services supplier was issued on 9th February 2004.

11. To encourage a robust competition, a proactive market engagement exercise was conducted which resulted in a healthy response to the OJEU notice. Further details, which are still commercially sensitive, are contained in the linked exempt report.

Commercial Strategy

12. Details of the approved Commercial Strategy are contained in the linked exempt report.
ITN Documentation

13. The ITN documentation comprises five volumes as follows:

• Volume One: General documentation and bidders instructions (including response requirements), in accordance with relevant MPA Contract Regulations
• Volume Two: High level draft terms and conditions of contract
• Volume Three: Detailed Statement of Service Requirements (output specification including HR and TUPE requirements)
• Volume Four: Pricing/Payment/Performance and commercial requirements
• Volume Five: Background information, including system, network data, user information, etc.

All members of the ICT workstream project board – including the nominated MPA Internal Audit member – will have reviewed all five volumes of the ITN prior to issue. MPA members may also review copies of the completed ITN documentation held by the Director of the OS Programme if they wish. It is not intended to lodge the ITN volumes in the Member’s Library at this stage due to their current commercial sensitivity. If required, the OS Programme can provide a detailed briefing to individual members.

14. Subject to approval of this report, the MPS intends issuing the ITN documentation to the short-listed bidders during July 2004. The current timetable showing key procurement milestones thereafter is contained in the associated exempt report.

C. Race and Equality impact

1. The OS Programme can confirm that this procurement exercise will ensure that contracts are only let with organisations that fully support the MPA’s race, diversity and equality policies.

2. There are no direct race, diversity and equality implications related to this paper.

3. Consultation processes with MPS staff with regard to future requirements are ongoing for each of the workstreams. A briefing process has been agreed with trade unions with a representative attending relevant meetings in each workstream. The OS Programme Director also holds a bi-monthly briefing meeting with trade union representatives.

D. Financial implications

1. The financial implications to the MPA of the procurement of these ICT core services are detailed in the associated exempt paper.

2. A complete overview of risks are contained in the linked exempt report.

E. Background papers

1. Exempt Paper to Finance Committee – 18th April 2002 entitled “Outsource Contracts in the MPS - Proposed Strategies For Renewal”

2. Exempt Paper to Finance Committee – 24th October 2002 entitled “Programme for Re-tendering the Services through the Current Outsource Contracts”

3. Open and Exempt Papers to Finance Committee – 10th July 2003 entitled “Appointment of Consultants to support the Outsource Services re-tendering programme and the Procurement Business Process Improvement Programme”

4. Exempt Paper to Finance Committee – 10th July 2003 entitled “Programme for Re-tendering the Services through the Current Outsource Contracts”

5. Exempt Paper to Finance Committee – 18th December 2003 entitled “Programme for Re-tendering the Services through the Current Outsource Contracts”

6. Exempt Paper to the Co-ordination and Policing (COP) meeting – 24 January 2004 entitled “The Future Procurement of Information and Communications Technology Outsourced Services “

7. Exempt Paper to Finance Committee - 22nd April 2004 entitled “Programme for Re-tendering the Services through the Current Outsource Contracts”

F. Contact details

Report authors: Steve Atherton – Director of Procurement Services

Ailsa Beaton – Director of Information

For more information contact:

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

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