Renewal of contract for the provision of the travel booking service

Report: 8
Date: 19 October 2006
By: Director of Resources for the Commissioner

Summary

This report outlines the process for the re-competition of the contract for the provision of a travel booking service for the MPS and seeks approval to commence contract action utilising the Office of Government & Commerce (OGC) Buying Solutions Public Sector Business Travel Framework Agreement.

A. Recommendations

Members are invited to

1. Approve the use of the OGC Buying Solutions Public Sector Business Travel Framework Agreement to select a travel booking service contract for the MPS.

B. Supporting information

Introduction

1. There is already in existence a contract covering the provision of a travel booking service for national and international flights and other related services. These include booking overseas hotel accommodation, car hire, international rail, ferry, arranging visas and foreign currency exchange. In addition to this, the contractor is also able to provide access to negotiated fares/rates, including low cost air carriers.

2. The current contract expires on 31 December 2006.

Existing arrangements

3. The current contract was awarded in 1999 after a competitive, cost effective tender process. It provides the MPS with access to a real time computer reservation system to make bookings and also provides an “implant” (ABTA qualified full time members of staff) to support this process. The arrangement provides a comprehensive travel service to MPS staff engaged on official business with the additional benefit of being able to issue tickets on MPA premises.

4. In line with industry practice, the contractor receives an annual management fee (renegotiated each year) for the implanted service. However, as a part of the contract agreement, all commission charges included on the sale of tickets are returned to the MPA. This income stream reduces the outlay on the management fee.

5. Since July 2005, the MPS has been able to take advantage of a direct computer link to low cost carriers, enabling flights to be booked direct.

6. These arrangements are managed by the MPS Travel Services unit, which is part of the Directorate of Resources. The unit has developed considerable expertise over the years and the unit constantly reviews and discusses with the current supplier ways of improving the service to ensure that the MPS benefits from developments in the travel industry and this has resulted in cost savings. In selecting a new supplier, it is intended to build upon this, seeking additional improvements and enhancements to the services provided.

7. Travel Services currently work within existing MPS policy guidelines to ensure the need for operational and non-operational overseas travel is robustly challenged and to provide the cheapest fare commensurate with the nature of duties being undertaken. However, final decisions are ultimately at the discretion of the Authorising Officer in each Business Group. In selecting a new supplier, the MPS will also focus on how bidders can help us review and refine internal travel guidelines.

Future intentions

8. A new OGC (Office of Government & Commerce) Public Sector Business Travel Framework Agreement came into effect in June 2006. The framework is split into five lots; Rail, Air and Ferry, Hotel Accommodation, Conferences & Car Hire, and is already being used by the Department for Work and Pensions, the Department for Environment, Food and Rural Affairs, the Home Office, the Health & Safety Executive and the National Health Service.

9. Three suppliers have already qualified under the OGC tender process to provide the services for air and ferry travel. It is proposed to conduct the competition for a new provider from within the OGC framework. This would maintain a level of competition, yet reduce the costs and time undertaking a full-scale tender exercise.

10. Utilising the OGC Framework Agreement provides a number of benefits:

• Combined buying power of Government Departments
• Indicative costs are lower when benchmarked with the deals other police forces and Government departments currently have in place.
• Pricing on the OGC framework is based on a fixed fee per transaction. Under this model, the supplier has to absorb any increase in operating costs rather than passing them on to the customer. The three suppliers within the Framework are global market leaders and would therefore be best placed to handle our diverse international flight portfolio.

11. Experience has shown that the MPS travel budget is not large enough to seek separate deals with airlines which could potentially generate greater savings. The combined expenditure committed through the OGC framework is expected to generate significantly greater savings; enabling the MPS to gain further benefit from any deals negotiated.

12. As part of the terms of reference for the new contract, each of the three potential suppliers will be asked to provide information on any other innovative and cost effective methods of arranging travel that will improve the service to our internal customers.

13. We also intend to explore whether the scope of the contract can be extended to include booking UK hotel accommodation and conferences to provide additional cost benefits to the MPS.

14. The impact of air travel on global warming has been recognised. The chosen supplier will need to work with Travel Services to introduce a scheme to capture the costs of the impact and use this fee to fund green projects to compensate for the damage.

15. Given the strategic nature of this contract it is intended to let a five-year contract (three years plus two one-year extensions).

Abbreviations

ABTA

Association of British Travel Agents

MPA

Metropolitan Police Authority

MPS

Metropolitan Police Service

OGC

Office of Government & Commerce

C. Race and equality impact

1. Equal opportunity and diversity issues will be fully safeguarded through the tendering process.

D. Financial implications

1. Projected expenditure on the booking service is £1 million for the five-year period. This is based on annual expenditure of £200K. For the intended five-year period, projected expenditure on flights and other related services is £26 million. This is based on annual expenditure of £5.2 million per annum. Combining the cost of the booking service and projected travel expenditure, the total value of the contract is, therefore, £27 million.

2. 2004/5 costs have been used above to estimate likely future expenditure on this proposed contract. This is because 2005/6 expenditure is atypical as it includes travel arrangements made as part of the police response to the Tsunami disaster in South East Asia.

3. Projected expenditure on UK hotel accommodation and conferences is a further £25 million for the five-year period. This is based on annual expenditure of £5 million in 2005/6.

E. Background papers

None

F. Contact details

Report author: Andrew Bundle, Commercial Services, MPS

For more information contact:

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

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