Wards Affected: All Wards ITEM 9 CABINET PROCUREMENT COMMITTEE 5 AUGUST 2014 AWARD OF CONTRACT MAINTENANCE AND UPGRADE OF THE HIGHWAYS ASSET MANAGEMENT SYSTEM (REF: CU2373) Author: Rachael Kingsley, Head of Highways, Tel: (01908) 252411 Assistant Director: John Pryor, Assistant Director Public Realm: Tel: (01908) 254258 Executive Summary: This report is seeking approval to award the contract for the Highways Asset Management software package Confirm including an upgrade to reach Enterprise licence status, to Pitney Bowes. The contract is key to maintaining the current operational effectiveness of the system which supports the asset management of our Highways. This report is seeking approval to award the contract for an initial duration of 5 years to April 2019. This will allow the service to review and enhance the system while ensuring it continues to meet the service needs. The total value of this contract will be 237,547.00 (over 5 years), which delivers a saving of 12,000 over the projected 5-year cost of the current arrangements. This saving is 9,000 per annum from removing Symology and 3,000 per annum on Confirm maintenance costs. 1. Recommendation(s) 1.1 That the contract for the upgrade and maintenance of the Highways Asset Management System be awarded to Pitney Bowes. 1.2 That a maximum contract length of 5 years be agreed with a review in April 2019. 2. Context 2.1 The asset management system is currently used across the Public Realm Service Group. It holds our asset information and has links through to external contractors as well as Customer Contact Portal (CCP) and National Street Gazeteer. 2.2 The system has developed over the past ten years and this year upgrades and additional modules have become available. In order to keep up with the service demands and in particular to interface with our new Highways contractor we require more functionality within the system. 2.3 Performance of the highways contract and all Public Realm Customer Service Enquiries come through Confirm. This allowed the new contract to be set up with timely responses forming part of the contract that are monitored through CPC, ITEM 9 5 AUGUST 2014 PAGE 1
agreed KPI s. The system there allows for a timely response and operational notes to be visible at service level but also via our helpline and front end system CCP. 2.4 Our New Roads and Streetworks Team currently operate a software package Symology. This software is currently used for utility companies and other contractors to notify the team of proposed maintenance works by applying for the appropriate notice to work upon the Highway. A systems review across the Public Realm Service Group identified that Symology could be incorporated into the Confirm system. 3. Background 3.1 A Public access review took place in 2012/13 with a lean review forming part of the way the new highways contract specification has been produced. This Public Access review and links to the helplines CCP was based on Confirm being the system of choice therefore investment has already been made into the Confirm system. 3.2 The new Highways Term Service Contract has utilised the Asset Management system we have in place to mobilise the Highways Inspectors and Operational workforce, thus allowing work to be allocated to staff that are currently on site. The tender submission from the new contractor supports the requirement to interface with our Confirm system. 3.3 The Council is corporately identifying areas where systems can be rationalised. It has been recognised that there is the potential to replace the functionality of Symology with in our current Confirm Asset Management System. 3.4 If the enterprise licence is not purchased the service would still need to transfer the functionality of Symology across to Confirm. This will require an expenditure of 46,802. 3.5 If we upgrade Confirm to the latest modules and also the Enterprise licence the cost will be 64,000 rather than 46,802. The invest to save will provide us with the new functionality offered to operate our street works notices and permits. 3.6 The invest to save of 64,000 will provide the service with a saving of approximately 9,000 annual maintenance cost for Symology once the functionality has transferred. 3.7 The Confirm annual licence and support cost would also reduce from the present figure of 35,000 (pay per module) to 32,000 (enterprise licence) saving 3,000 annually from current Confirm costs. A total annual saving of 12,000 is therefore feasible if the report recommendations are agreed. 3.8 As well as financial saving it will also provide all future modules at no extra cost, instead of purchasing each module or sub module as an when required by the service. CPC, ITEM 9 5 AUGUST 2014 PAGE 2
The 5 year agreement is shown below: Users Fee Year 1 Year 2 Year 3 Year 4 Year 5 Total 24 Software 64,225.00 0.00 0.00 0.00 0.00 64,225.00 Additional Maintenance 0.00 0.00 0.00 0.00 0.00 0.00 Maintenance Total 32,000.00 33,280.00 34,611.00 35,996.00 37,435.00 173,322.00 Total 96,225.00 33,280.00 34,611.00 35,996.00 37,435.00 237,547.00 3.9 Consultation 3.9.1 The specification and evaluation criteria for this contract were developed following consultation with key stakeholders and also formed part of the mobilisation of the Highways contract and identified as the required IT interface requirements during Highways Term Service Contract tender. 3.9.2 This process highlighted that the current asset management system was still the preferred option, most economical and also gave sufficient scope to rationalise systems in the coming months to produce additional annual savings. 3.10 Market Engagement and Lessons Learnt 3.10.1 The previous contract for the provision of this software package has remained on rolling annual renewal and therefore formalisation of a 5 year contract would provide an appropriate contract package, maintenance agreement and also cost saving opportunities in future years. 3.10.2 There are other Highways Asset Management systems providers on the market. There has however been a large investment already made by Milton Keynes Council and potential implication of not having the high specification that we currently have would be a high risk and high impact to the service. The impact would also be met by the Council s new Highways contractor based on their investment into our software package during mobilisation. 3.11 Contract Management 3.11.1 The Senior Client Officer for this contract is Head of Highways Service. The key governance processes include: Monthly performance review meetings with the supplier s designated contract manager. Six-weekly health-check conference calls where required with the supplier s senior contract manager to review system performance and issues arising. Half yearly review meetings with the supplier s senior contract manager. CPC, ITEM 9 5 AUGUST 2014 PAGE 3
4. Implications 4.1 Policy By our Ability to better manage our Asset the award of this contract will progress the following priorities/outcomes within the Corporate Plan 2012-16: World Class MK: Our ambition is to increase the international and national standing of Milton Keynes in several areas including our economic success, thriving communities and a high quality environment. Living in MK: Ensuring people are satisfied with Milton Keynes as a place to live, and to support them effectively through the provision of high quality and efficient public services. Visiting MK: Aim to make Milton Keynes a highly regarded visitor destination with a safe and effective transport system which is easily accessible regionally, nationally and internationally. Cleaner, greener, safer, healthier MK: Improve health and well-being, reduce health inequalities and work with partners to reduce crime and disorder to improve quality of life in MK. This will also support the Highways Term Service Contract delivery, performance, financial savings and corporate IT system rationalisation project. 4.2 Resources and Risk 4.2.1 The costs of the contract are already contained within the Highways service budget for the 5 year duration. 4.2.2 This contract will deliver savings of 12k per year. 4.2.3 The one off installation costs of 64k will be met through identified resource allocation within the Highway Contract set up costs and the setting up of Permit Scheme for which additional resource has been set aside, and will be recovered through permit charges. 4.2.4 Delivery of savings will be monitored by Head of Highways 4.2.5 The Risk Assessment for this contract will be built into the new list of risks being prepared for implementation into GRACE. The current risks in GRACE are mobilisation risks. 4.2.6 This contract will secure the opportunity to bring together separate systems into a single agreement that delivers better value. It is assessed that the delivery of this contract provides a high likelihood CPC, ITEM 9 5 AUGUST 2014 PAGE 4
that it will secure the opportunity defined, providing MKC with a high positive impact. 4.2.7 The key THREATS for this contract have been assessed as: Risk Likelihood Mitigation Likelihood after mitigation Insufficient resource in contract management L Resource already in place as part of the new Highways term service contract suitably trained in contract planning and management L Resources and Risk Implications Y Capital Y Revenue N Accommodation Y IT Y Medium Term Plan Y Asset Management 4.3 Carbon and Energy Management The use of an electronic system eliminates the increasing use of paper and storage requirements. A new central HUB allows for mobile working for all operatives via handheld devices with jobs sent direct to staff over the air. The new work processes and system upgrades will allow for more efficient end to end workflows. In the first two months this has included a reduction in mileage between each repair site for operatives. Further service measures that are not contractual KPI s are also being recorded including carbon and energy reduction measures. 4.4 Legal This report seeks approval to award a software contract to facilitate the Council s duties under the Highways Act 1980; to maintain highways maintainable at public expenses. The Services under this contract fall under part A of the Public Contracts Regulations 2006. This means that the full EU procurement regime would be expected to apply to the procurement of this contract, including an advertisement in the Official Journal of the European Union (OJEU), as well as the Council s Constitution, Contract Procedure Rules (CPR). CPC, ITEM 9 5 AUGUST 2014 PAGE 5
The estimated value of the contract over the proposed five year period is 237,547. The Council s Contract Procedure Rules require that all contracts with a value in excess of 100,000 are advertised via the Council s system Intend. The EU Regulations and the Council s Contract Procedure Rules further require that all contracts with an estimated value that meets the EU threshold are advertised in the OJEU. The current EU threshold for services is 172,514. Under CPR 21, an exemption may be sought from complying with the Council s Contract Procedure Rules where exceptional circumstances exist. The procedure for obtaining such an exemption is specified. Where the value of the contract is above 100,000, approval to waive can only be granted by the Section 151 officer in consultation with the relevant lead Cabinet Member following advice from the Head of Strategic Procurement and AD Law and Governance where necessary. A waiver under the above provisions has been sought and obtained accordingly to enable the award of this contract to the named Contractor. There is some risk in relation to the award process followed for this contract. The Council s Constitution further requires that all the Cabinet Procurement Committee approves the award of all contracts with a value of 100,000 and above. This report therefore seeks approval to award the contract in accordance with the constitution. Other Implications - N Equalities/Diversity Y Sustainability N Human Rights Y E-Government Y Stakeholders N Crime and Disorder Y Carbon and Energy Policy Background Papers: None CPC, ITEM 9 5 AUGUST 2014 PAGE 6