8.4 REMOTE OFFICE INTERNET AND DATA SERVICES CONTRACT MANAGEMENT OFFICE RANDALL THAIN, PROJECT MANAGER

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1 8.4 REMOTE OFFICE INTERNET AND DATA SERVICES CONTRACT LOCATION/ADDRESS: EXECUTIVE MANAGER: PREPARED BY: TRIM FILE NO: 48/11/29 ATTACHMENTS: WHOLE OF MUNICIPALITY JOHN GABB ENTERPRISE PORTFOLIO MANAGEMENT OFFICE RANDALL THAIN, PROJECT MANAGER Nil PURPOSE This report seeks Council approval to award the Remote Office and Internet Data Services Contract for a 3 year period from 31 May 2015 to 31 May 2018 (with an option for a further term of two years) to TPG Telecom Limited. 1. RECOMMENDATION That Council: 1.1 Notes that following a competitive tender process, TPG Telecom Limited has provided the best value tender submission for the Remote Office and Internet Data Services Contract. 1.2 Awards TPG Telecom Limited the Remote Office and Internet Data Services Contract No 1917 to provide services to Council for a three year period commencing from 31 May 2015 to 31 May 2018, with an option to extend for further term of two years subject to the agreement of both parties. 1.3 Notes that the contract sum is $344,388 per year exclusive of GST for the 3 year period together with the option to extend for a further 2 years (total contract value $1,721,982 excluding GST) and that this is projected to save the council $174,659 (ex GST) per year over the term of the contract, based on current expenditure. 1.4 Notes that the proposed new service agreement will significantly improve the speed of connections and enhance business continuity capability. 1.5 Affixes the Common Seal of the Port Phillip City Council to Contract No between Council and TPG Telecom Limited. 2. BACKGROUND 2.1 The Council s current remote office connectivity and internet data service has expired and services are still being provided by Optus Pty Ltd. Tenders have been invited to establish a replacement contract. 2.2 Four organisations on the MAV Telecommunications panel (Contract number: TC ) were invited to respond to the tender. The tender opened on 16/12/2014 and closed on 30/1/2015 and attracted responses from all four organisations. 27

2 2.3 The Tender Evaluation Panel (TEP) comprised the following people: Rebecca Jarvie (Chairperson) Rod Apostol (Manager Business Technology) Michael Pearson (Enterprise Architect) Kim Botherway (Technical Analyst) 2.4 All TEP members signed the standard form indicating they had no conflict of interest to declare and that they would keep the tender information confidential. 3. KEY INFORMATION 3.1 The evaluation criteria and weightings are detailed in Table 1 below. TABLE 1 TENDER EVALUATION CRITERIA Criteria Percentage Weighting Price 40 Capacity to meet the requirements of the specification. 30 Relevant experience and track record. 10 Overall solution 20 Tenders received and Evaluation 3.2 Details of the tender costs received are shown in Table 2 below. TABLE 2 TENDER COSTS No. Tenderer s Name $ Price (Excluding GST) Per month 1. Tenderer A $38, Tenderer B $66, Tenderer C $67, TPG Telecom Limited $28, All tender submissions were prepared in conformance with the specifications and MAV contract conditions and were referred to the TEP for their review and evaluation. 28

3 3.4 The following total scores were agreed against the evaluation criteria and are detailed in Table 3 below: TABLE 3 Evaluation Summary No. Tenderer s Name Score (Out of 100) 1. Tenderer A Tenderer B 3. Tenderer C 4. TPG Telecom Limited The scores for the non price components were based on compliance with over 103 specific business and technical requirements documented by the council in the Request for Quote issued. All tenderer s capacity scores were within a range of each other of 2.4 points (out of 30) and all service providers were capable of delivering a solution to meet the council needs. Price was the main factor to determine best value. 3.6 All vendor submissions listed relevant experience satisfactory to council requirements. 3.7 The final weighted score which takes into account all of the evaluation criteria (including price) has been used to determine the contractor recommended by the TEP. 3.8 On the basis of best value, it is recommended that Council engage TPG Telecom Limited for the delivery of remote office connectivity and internet data services over 3 years and if still competitive with the market, with an option to extend a further 2 years at the agreement of both parties. Council agreement would be subject to service costings representing best value. 3.9 The value of this contract is in excess of $1 million over a four year period (including the proposed option to extend) and Council approval is required to award, enter into and sign a contract of this financial magnitude The expected annual cost of the contract ($344,388 plus GST) is less than the current budget of $519,036. The net savings are expected to be $174,648 plus GST per year Service transition is not considered onerous in terms of cost and time. The TPG Telecom Limited monthly costs include the cost of establishment of the new service Reference checks were conducted for TPG and found to be satisfactory. Reference sites checked were: 29

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5 FURTHER SUPPORTING INFORMATION ALIGNMENT TO COUNCIL PLAN AND COUNCIL POLICY 4.1 The remote office connectivity and internet data services supports and enables Council to deliver the following strategies in the Council Plan : Achieve a reputation for organisational and service excellence CONSULTATION AND STAKEHOLDERS 5.1 Council has undertaken an initial consultation with key stakeholders within the business. The consultation process has assisted with the development of the specification and ensures the project will meet or exceed the stakeholder and community expectations. Design workshops have been conducted with key stakeholders to ensure quality deliverables have been included in the service proposal. 5.2 The contract manager and project sponsor shall ensure the key stakeholders will be updated at the key project milestones. LEGAL AND RISK IMPLICATIONS 6.1 An effective and accurate remote office connectivity and internet data service is required to enable Council to meet its statutory obligations. TPG Telecom Limited is well resourced with experienced personnel and this should ensure that Council avoids risk that may lead to financial loss or have a negative impact on the Council s reputation. 6.2 All tenderers operate a fully endorsed OHS system, in accordance with the contract terms and conditions. 6.3 All tenderers complied with the insurance requirements of $10,000,000 public liability and $10,000,000 professional indemnity. SUSTAINABILITY Triple Bottom Line 7.1 ENVIRONMENTAL IMPLICATIONS Not Applicable 7.2 SOCIAL & CULTURAL IMPLICATIONS Not Applicable 7.3 ECONOMIC IMPLICATIONS Not Applicable 8. FINANCIAL IMPLICATIONS (all values listed are ex-gst) 8.1 The expected gross cost of using the preferred contractor over the next 5 years is $1,721, The tendered price of $344,388 per year from TPG Telecom Limited represents a decrease of $174,648 per year (or $873,240 over 5 years) based on the current spend. 8.3 The tender from Contractor TPG Telecom Limited provides the best value for Council and all costs fall within current operating budgets. 31

6 IMPLEMENTATION STRATEGY 9.1 TIMELINE After contract signing, TPG Telecom will require 40 days lead time to arrange for connections to their network. TPG Telecom will provide a project management team to implement the solution, which should be in place before the end of August The St Kilda and South Melbourne Town Halls will be connected first, followed by 2 priority sites (St Kilda Library and South Melbourne Market), then a rollout to the remaining remote sites will occur. 9.2 COMMUNICATION In accordance with the MAV Contract Conditions, the TPG Customer Contract will be executed by both parties. The Contracts and Procurement Unit shall notify all unsuccessful tenderers. The Contract Manager shall invite debriefs from all unsuccessful tenderers. OFFICER DIRECT OR INDIRECT INTEREST 10.1 No officers involved in the preparation of this report have any direct or indirect interest in the matter. 32