All Divisions. Managed Print Project Decision to award the managed print services contract for Essex County Council

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1 Key Decision Report to Councillor Derrick Louis, Cabinet Member for Transformation and Corporate Services Date of report 12 December 2013 Forward Plan reference number FP/354/10/13 County Divisions affected by the decision All Divisions Managed Print Project Decision to award the managed print services contract for Essex County Council Report by David Wilde - Director for Information Services (Chief Information Officer) Enquiries to: David Wilde Purpose of report 1.1 To seek agreement to award a contract to Xerox to provide a fully managed print solution including secure printing across all council offices. 1.2 This report does not relate to the Council s volume printing requirements which are undertaken under another contract. 2. Recommendations 2.1 Agree to the award of the managed print contract to Xerox following the successful procurement exercise completed under the GPS framework. 3. Background and proposal 3.1 The majority of print costs are incurred on Multi-Function Devices but there exists a degree of locally sourced printing being undertaken which incur additional charges. ECC spent approximately 1.7m per on printing during 2012/13; the associated print volumes were approximately 53 million pages, split as 35 million mono and 18 million colour. The Multi-Function Device (MFD) portion of this spend is estimated at 1.4m.

2 3.2 Predicted print volumes for 2013/2014 are forecast to reduce to 43 million (30 million mono and 13 million colour) compared to 53 million for 2012/13, this is largely due to the introduction of new EUC technology and reduced printing requirements. 3.3 It is anticipated that demand will continue to reduce further in subsequent years as ECC moves to become paperless and implements other ways to drive down the volumes of printing. 3.4 The current method of procuring MFDs is over a number of suppliers. Most of the estate has been leased from Konica Minolta, and this arrangement has been in place for at least five years. A decision was taken earlier this year to procure a new managed service contract via a Government Procurement Service Framework agreement. 3.5 A fully managed print service will mean that the provider supplies all new equipment and consumables. The Council will pay a single charge for each print. The chosen supplier will manage the devices including maintenance in a unified and standardised fashion reducing the variety of models which is currently seen across ECC. 3.6 The cashable savings and efficiencies that the procurement exercise delivers, will be further enhanced through future changes in behaviour, reinforced by a new print policy. The existing behaviours regarding printing across the Council need to change and modernise in keeping with the office improvements and new ways of working staff are now adopting. 3.7 There is currently a high tendency for staff to print off s and documents that could, and should be read on screen. The current printing arrangements make it easy for staff to print documents without retrieving them from the printer, wasting paper, toner and energy. 3.8 Cost reduction can be achieved through the following practical steps enabled through the award of a managed print project: Standardised and cost effective approach to buying goods and services for printing as consumables are included in the contract Reduced charge per page for mono and colour prints. Removal of lease costs Cultural change supporting smarter work practice through change management and through the implementation of a mandated print policy across the council. Creation of a new print policy will include the reduction in the ratio of colour to mono printing from approximately 35% down to 10%. Using a secure print solution - The new provision of devices will support staff in more flexible ways of working and enhance the level of confidentiality when printing documents. This will mean that:

3 o Any document is only printed once the individual enters their unique identity or produces their staff pass (the proposed solution will allow both methods to be used). o Printing will be able to take place from any networked printer o Printing of documents will not occur until the individual is present at the device. o No confidential documents would be vulnerable to being left exposed on printers. o A time period for collection of printing can be set, and printing not collected in that timescale will be deleted. o It is likely that print volumes will be reduced by around 10% o Print jobs can be sent remotely and printed when the employee is next at the printer, facilitating remote and mobile working. 3.9 Other project benefits Climate change/carbon emissions (reduction). Rationalisation of estate. Simplified Invoicing. Improved management information. A member of staff undertaking a piece of work away from their normal base, can print to a central print queue and collect the paper copy from any printer within the network. Opportunity to put in place a printing policy which could encourage cultural change eg if fewer colour printers are available then fewer colour prints will be printed and savings will be increased This procurement exercise was carried out using the Government Procurement Services Framework Agreement for Multifunctional Devices and Services, Managed Print Services and Print Audit Services (RM1599), specifically Lot 3 Managed Print Service. The Contract being used is the calloff contract which was part of the Framework Agreement and was included in the Procurement documents issued to the suppliers. Within a Framework Agreement bidders have already been shortlisted for this relevant Lot. ECC ran a mini-competition to appoint the selected supplier in compliance with the rules of the relevant framework. This procurement process was run by ECC s commercial team and was carried out using the Supplier Portal (Ariba) The Framework has evaluation criteria of 40% Price and 60% Quality. The tender documents were issued to the four suppliers on Lot 3 of the framework and two bids were received. Quality was evaluated by a cross functional team including Information Services, Transformation Support Unit, Libraries, Registrars, IS Security, Purchase to Pay and Procurement (against the specified evaluation criteria) and Finance for Price. Further to completion of the evaluation process Xerox were selected as the successful bidder and is the supplier being recommended for contract award.

4 Managed Print Evaluation Matrix 4. Financial savings Quality (95) Weighted (100) Supplier A - Konica Minolt Weighted Supplier B - Xerox Weighted Questions/Sectio n 9 Technical Questions Section A - Detailed 10% Requirements 9.2 Detailed 40 10% Requirements Section B - Technical Questions 50% 9.4 The Managed Service (7) 35 20% Service Levels 5 10% Secure Print Solution 5 10% Supply and provision of MFD s (1) 5 5% Reporting (1) 5 3% Invoicing (1) 5 1% Training 5 1% (1) 9.11 Situations Information 0% TOTAL (1) QUALITY TOTAL PRICE TOTAL Supplier The present estimated annual cost of MFD related printing is 1.4m against a total estimated printing cost of 1.7m (the difference reflecting paper costs, other consumables and local printing solutions). 4.2 It is anticipated that moving to a new Managed Print Contract will achieve significant savings and improvements to infrastructure through: The reduced costs of printing through improved click per print charges. Changes to corporate print policy leading to significantly reduced demand Minimising wastage through unnecessary printing 4.3 Demand was estimated as follows for the coming years based on reducing volumes: Iteration 1 Year 1 Year 2 Year 3 Year 4 Year 5 Estimated throughput - Mono (m) Estimated throughput - Colour (m) Total Annual Copies (m) The above indicated an organic reduction in demand based on general reductions in printing both through the EUC and proposed changes to staffing levels at the authority. Pending analysis by the CIO, an aspirational target was set against which bidders were asked to price for under a second iteration of the tender documentation:

5 Iteration 2 Year 1 Year 2 Year 3 Year 4 Year 5 Estimated throughput - Mono (m) Estimated throughput - Colour (m) Total Annual Copies (m) Both bidders were asked to submit bids against the volumes. The prices were as follows: Konica Minolta Xerox Price 3.3m 3.7m 4.5 Bidders were asked to indicate how prices would fluctuate pending variations to the specified volumes. Xerox gave a thorough and transparent assessment of how this would be achieved and provided assurance that savings would still be achieved in line with expectations. KM confirmed that their pricing for 43m clicks was based on a reduction of machines in the estate and if this was not the case then a higher rate based on 53m clicks would be applied. As we cannot guarantee a reduction in machines we have used this rate based on 43m clicks to assess Konica Minolta and ensure we are treating bidders equally. 4.6 In securing the preferred bidder and achieving the demand levels specified above, it is anticipated that savings can be achieved as follows: All in 000 s Year 1 Year 2 Year 3 Year 4 Year 5 Actual Cost - Mono Actual Cost - Colour TOTAL COST - Xerox Anticipated Annual Saving: It is anticipated that there is minimal risk of non-delivery of savings through undertaking the managed print project indicated here. However it is anticipated that an inability to meet the demand levels indicated above will affect the overall level of saving achieved. 4.8 Additionally, in migrating all MFDs to a more modern equivalent while rationalising the existing fleet, costs may be incurred in cancelling existing contracts with incumbent suppliers. These are expected to be a maximum of 300k and would be incurred within Year 1 of the project. This is not factored into the savings above. In order to fund any potential exit costs associated with the contract, a draw-down from the transformation reserve has been agreed up to a maximum of 300k to handle any early exit costs. It has been

6 agreed that any drawdowns will be returned to the corporate reserve which will be financed by savings over and above those specified in the original business case. 5. Legal Implications 5.1 It is lawful to procure from a central framework provided the rules of the framework have been complied with. Evaluation of bids must take place in accordance with the published evaluation criteria. 5.2 The Council needs to have an effective means of printing documents in order to ensure that it complies with its statutory duties to publish printed information, since the law still requires significant numbers of documents to be printed. 6. Equality and Diversity implications 6.1 In making this decision ECC must have regard to the public sector equality duty (PSED) under s.149 of the Equalities Act 2010, ie have due regard to the need to: A. Eliminate unlawful discrimination, harassment and victimisation and other conduct prohibited by the Act. B. Advance equality of opportunity between people who share a protected characteristic and those who do not. C. Foster good relations between people who share a protected characteristic and those who do not including tackling prejudice and promoting understanding. 6.2 The protected characteristics are age, disability, gender reassignment, pregnancy and maternity, race, religion or belief, sex and sexual orientation. 6.3 The PSED is a relevant factor in making this decision but does not impose a duty to achieve the outcomes in s.149, is only one factor that needs to be considered, and may be balanced against other relevant factors. 6.4 The procured solution will allow the supplier to provide a range of equipment which will ensure that we can, as far as possible, meet the needs of any users with a disability. 7. Background papers Invitation to tender document. The bids received contain exempt information. David Wilde - Director for Information Services (Chief Information Officer) Terry Osborne Director for Corporate Law and Assurance Approved by 13 December 2013

7 Margaret Lee Executive Director for Corporate Services Cllr Derrick Louis Cabinet Member for Transformation and Corporate Services

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