CABINET - 26 JULY 2011 REPORT OF THE DIRECTOR OF CORPORATE RESOURCES EAST MIDLANDS SHARED SERVICES: PROCUREMENT OF MANAGED HOSTING SERVICE

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1 N CABINET - 26 JULY 2011 REPORT OF THE DIRECTOR OF CORPORATE RESOURCES EAST MIDLANDS SHARED SERVICES: PROCUREMENT OF MANAGED HOSTING SERVICE Purpose 1. The purpose of the report is to: advise Cabinet of progress in the development of the East Midlands Shared Services (EMSS) through the procurement of a managed hosting service; and seek approval to award the contract for a managed hosting service. Recommendations 2. It is recommended: (1) That progress in the current tendering exercise be noted; (2) That the Director of Corporate Resources be authorised to award the contract for a managed hosting service for a period of 4 years extendable up to 8 years (by 1-year increments), following the completion of the current procurement exercise; (3) That it be noted that, subject to the approval of Nottingham City Council's Executive Board, the County Council will be asked to accept a time-limited delegation of the procurement function from the City Council for the purposes of securing consultancy support to assist in the delivery of the managed hosting service. Reasons for Recommendations 3. Shared services provide an opportunity for the County Council and Nottingham City Council to make efficiency savings over the coming years. 4. The operating model for these shared services agreed by both authorities will be underpinned by a managed hosting service, which is being purchased by the County Council on behalf of both authorities. 5. A Memorandum of Understanding has been signed by both authorities to cover the procurement process, costs and early EMSS activities. A partnership agreement 1

2 between the County Council and Nottingham City Council to support shared services is being finalised and will be signed before the contract award. This will include provision for the establishment of a Joint Committee, as agreed by the County Council in September The procurement of consultancy support to assist in the delivery of this managed hosting service will require a time limited delegation of the procurement function from Nottingham City Council to the County Council under Section 19 of the Local Government Act Timetable for Decision 7. Subject to Cabinet approval, the preferred bidder would be identified at the end of July 2011 and the contract for the managed hosting service would be signed in September The managed hosting service would be scheduled to be in operation for the County Council in January 2012 and for the City Council in May The matter will be considered by Nottingham City Council s Executive Board on 19 th July The decision of the Board will be reported to the Cabinet. Policy Framework and Previous Decision 9. On 7 th September 2010, the Cabinet approved the development of a programme of shared services with Nottingham City Council and the creation of the shared service centres for transactional Human Resources (HR) and Payroll and Finance supported by a single Oracle ERP (Enterprise Resources Planning) computer application. 10. On 22 nd September 2010 the County Council agreed to the establishment of a Joint Committee and gave the Chief Executive delegated powers to take all actions necessary to give effect to this. Resource Implications 11. The resource implications for the procurement were set out in the report presented to the Cabinet on 7 th September The estimated initial value of the managed hosting service contract is up to 10m over the term of the contract, depending on the options taken and usage of the system. Costs will be shared between the County and City Councils. 12. The establishment of the shared services, underpinned by this managed hosting service, is expected to generate 2m of savings which will be shared equally between the two Councils. Circulation Under Local Issues Alert Procedure None 2

3 Officers to Contact Brian Roberts, Director of Corporate Resources, T: Fiona Holbourn, Head of Procurement, Corporate Resources Dept. T:

4 PART B Background 12. EMSS is a partnership between the County Council and Nottingham City Council to deliver high quality support services through a common ICT infrastructure and best practice processes in an efficient and cost effective manner. Details of this partnership, including a Summary Business case, were reported to the Cabinet on 7 th September The managed hosting service will provide an ICT platform for Oracle e-business Suite Finance, Procurement, HR and Payroll and their equivalent self-service modules. The ICT platform and shared services model are scalable to enable new partner organisations to share support services and receive standardised quality services at lower costs. 13. Subject to approval by Nottingham City Council s Executive Board on 19 th July 2011, consultancy support to assist in the delivery of the managed hosting service is expected to be provided through the County Council s existing Consultancy Services contract with Deloitte with the City Council delegating its functions in this respect to the County Council. It will be necessary for the County Council to accept a delegation from Nottingham City Council for the procurement of consultancy support. Procurement Process 14. The objective of the procurement is to appoint a third party supplier who will manage a hosted service for the E-Business Platform for the County Council and Nottingham City Council. The County Council is procuring this service on behalf of both Councils, although officers from both Councils, supported by ESPO, have played an active role in the procurement process. 15. A Memorandum of Understanding (MoU) has been signed by the County and City Councils, setting out the responsibilities and obligations of the two authorities during the procurement process and other early activities in the EMSS programme. This MoU lasts for 3 months until 9 th August 2011 or until a more formal Partnership Agreement is established to govern the relationship between the two Councils. Procurement Timetable 16. An accelerated procurement procedure has been followed, in line with the UK Public Contract Regulations and recent EU public procurement guidance. In this case there is a perceived economical advantage to be gained through rapid execution of the managed hosting service contract, in accordance with the EU's fundamental aims of boosting the economy through shortened procurement timescales. Account has been taken of the market's ability to respond and meet the reduced timescales. The 4

5 use of the accelerated procedure will not introduce inequality among potential suppliers who may be interested in competing for this contract. 17. The key dates in the procurement process are as follows: Closing date for submission of tenders 28 th June 2011 Intention to award 27 th July 2011 Standstill period completed approximately 11th August 2011 Contract signed on/after 12 th September 2011 Go Live for hosted platform from January 2012 Independent Review 18. This procurement project has been subject to an independent review by the County Council s corporate Commissioning and Contracts Board (which was also joined by officers from Nottingham City Council). This Board provided assurance that good procurement practice was being followed and that value for money was being delivered. Background Papers Report of the Director of Corporate Resources to Cabinet 7 th September 2010, Shared Services with Nottingham City Council Report of the Cabinet to the Council 22 nd September 2010, 'Shared Services with Nottingham City Council: Establishment of Joint Committee' Relevant Risk Assessments Equal Opportunities Implications Relevant impact assessments will be carried out from proposals brought forward as part of the planning and implementation process Partnership Working and Associated Issues EMMS is a key partnership for the County Council and Nottingham City Council and the Joint Committee governance model is being underpinned by a partnership agreement. This partnership agreement will need to be signed before the contract for the managed hosting service is completed. Risk Assessment The risks associated with the procurement process and deployment of the managed hosting service have been addressed through a risk management approach both at project and programme level and in line with the County Council's risk management approach. 5

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