Public Services > Devolved

The dust settles on Edinburgh's £186m ICT services award

David Bicknell Published 11 August 2015

Proposed contract enters Alcatel period; attention now switches to procurement projects in Glasgow and Kent


A couple of weeks on from the announcement that CGI had gained preferred bidder status for a £186m, seven year ICT contract at the City of Edinburgh Council, the procurement process is now in the Alcatel mandatory standstill period, a period of at least ten calendar days following the notification of an award decision which allows unsuccessful bidders to challenge the decision before a contract is signed.

With that rider in mind, it is worth examining the authority's thinking behind the contract.

The proposed contact is due to start next Spring after Edinburgh's existing contract with BT runs out, has been predicted to save the council a minimum of £45m over the lifetime of the deal. It will also lead to the creation of 221 new jobs and 60 modern apprenticeships in Edinburgh.

A report naming CGI as preferred bidder was approved by the council's Finance and Resources Committee last week. The 'ICT Services and Transformation Procurement' report outlines how the contract will deliver £45m of savings while an estimated additional £46m of essential services will be provided at no extra cost.

The new contract is expected to help drive the next phase of the council's channel shift programme, which is about moving customers to the most efficient and suitable channel for their needs. In particular, it means encouraging residents to engage with the council and carry out their transactions online.

Edinburgh has also become the first local authority in Scotland to propose a contract which could be used by over 50 other public sector organisations. Small to medium sized businesses in the city also expect to benefit as CGI is proposing to place business worth 25% of the value of the contract with the SME sector.

Edinburgh's current contract for ICT services, with BT, is due to expire in March 2016 and the aim of the procurement was to deliver an ICT solution "that meets both the current and future needs of the council in a digital age within an overall finite resource level."

The history behind the procurement is that in 2001, Edinburgh appointed BT as its contractor for outsourced ICT services. This was originally contracted for ten years and was extended in 2006 for an additional five years, which end in March 2016.

Approval was subsequently given by the City of Edinburgh Council's Finance and Resources Committee on October 31, 2013 to provide a new contract for ICT services in line with the council's ICT and digital strategy.

The procurement's aims were:

- To save the council at least £6m per year against the current ICT and digital strategy
- To procure services on a utility basis (with flexible pay as you go terms)
- To deliver against the aspiration to have 25% of the value of ICT services delivered by SMEs
- To transform the existing ICT service into a flexible scalable service
- To implement an output-based contract - 'what we get rather than how'

From the original pre-qualifying questionnaire (PQQ) between January and March 2014, there were 17 responses. Subsequently, the evaluation process brought the number of bidders down to seven, then four and finally two, CGI and Capita. From the last two bidders, the report suggests there was a 4.6% difference between the two bids, with CGI gaining a rating of 83.83% and Capita 79.15%. The rating was based on two elements: quality and commerciality.

Although Edinburgh is understandably happy to have reached the end of the procurement process and is keen to justify its decision, when asked about how it rated the Capita engagement, the council was happy to make clear that Capita had put in a "competitive" bid and it was "very professional about the process."

The council indicated that a key factor in its choice of vendor was a need for flexibility giving it the ability to consume ICT services on a 'pay-as-you-go' basis. The agreement with CGI is expected to be structured so that Edinburgh only pays for what it uses, with transparent costing that is capable of flexing both up and down on a monthly basis. E.g. an email service would be charged on the basis of the number of email users that month.

CGI is to provide the council with the following services: a Transition Service and Transformation Services, plus operational services, comprising 93 Output based specifications (OBSs) including Base Services and Utility Services and Business Case Development Services.

Although the contract term is for seven years, there is a council option to extend for a further five years from the end of the current term and then a further five years from the end of that term plus a further two years. The agreement uses the current version of the model agreement issued by the Cabinet Office for use in documenting large scale public sector IT projects and is based on the Crown Commercial Service (CCS') model contract and single prime supplier model.

The council's report makes clear that the procurement project had worked closely with all service areas to identify necessary enhancements in services that were required, which CGI is set to oversee. New services which include a significant level of enhancements include:

- Replacement of the current Accounts Receivable/ Finance, Procurement system and corporate HR system with a full Enterprise Resource Planning System (ERP). Edinburgh is already working towards upgrading its the existing Accounts Receivable system (PPSL), integrating its new banking online payment system, and automating some existing data transfers such as supplier invoices.
- The introduction of a corporate document management system, allowing staff to access their documents from any secure device, meeting records management standards, and integrating with housing and social work systems so field workers do not need to carry paper.
- The introduction of Office365 for all staff and school pupils to ensure office tools are always at the latest version and accessible from any device
- The implementation of the next phases of the Channel Shift programme, making many more transaction types available to citizens
- The introduction of collaboration tools to improve facilities for working together across the council and with partners.
- Replacement of the Local Area Network equipment in all schools which will reduce the number of network failures in schools and make the best use of the new network connections
- 4,000 additional wi-fi controllers will be provided across the entire schools estate to support flexible learning
- The introduction of a new telephony solution, providing a single system for the entire council and improved services for the contact centre
- The introduction of resilience across the council Wide Area Network and an increase in bandwidth for all council sites, including all secondary schools increasing to 1GB, locality office to 1Gb, and libraries increasing to 100Mb.

In all, the total value of the enhancements is expected to be in the region of £46m, the report said.

Councillor Alasdair Rankin, convener of the Finance and Resources Committee, said: "As a council we are currently going through a sea change in the way we do business. The council must reduce its costs by at least £107m over the next five years.

"This level of proposed saving is very significant and IT will be vital to help us transform and meet our savings challenge," he said. "It will also speed up our channel shift programme, giving residents greater flexibility to engage with and carry out their transactions with the council online.

Rankin added, "We are also leading the way as the first local authority in Scotland to propose a contract which can bring great savings to over 50 other organisations looking to improve their ICT capabilities. SMEs contribute almost £10bn to Edinburgh's economy each year and I am encouraged to see that they would also be nurtured under this new contract."

Inevitably, with Edinburgh's procurement seemingly largely completed, attention is now likely to switch to another major ICT services contract just down the road in Glasgow. There, Access, a partnership between Glasgow City Council and Serco, still has a few years to run on its 10 year contract, which was awarded in 2007, but started in 2008. Efforts at extending or re-procuring the contract are likely to start sometime next year.

Another major procurement exercise reaching its conclusion is one at Kent County Council. There the four-lot procurement covers HR, ICT and Finance; Services for Schools; Customer Functions; and all of these rolled up in one lot, Lot 4. Two key bidders are understood to be CGI and Agilisys.

Competitive dialogue at Kent is expected to continue throughout August with a decision on how Kent expects to proceed due to be made at the end of September. Contracts are due to commence in January 2016, with a period of mobilisation and transition from contract award in October 2015, towards the contract commencement. However, the council's Policy and Resources Cabinet Committee minutes point out that the timetable is dependent on the completion of the competitive dialogue process.

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