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Several local authorities within the South East, including Thanet District Council, formed a purchasing consortium called the South East Network for Telecommunications (SENT) with the aim of collaboratively holding a “mini competition” and e-auction for the provision of fixed line telephony, primarily covering voice telephone lines and calls.
This procurement exercise saw City, County, District and Unitary Authorities collaborating and in doing so, achieved the “critical mass” necessary to maximise competition, which ultimately achieved economy of scale not achievable on an individual Council basis.
As this exercise was a good example of collaboration in practice, the Office of Government Commerce (OGC) saw fit to fund a reverse e-auction. With the approximate cost of an e-auction in excess of £10K, not surprisingly it would not have been financially viable for authorities to engage on an individual footing. Therefore, this auction was a “first” for all members of SENT and maximised the competitiveness within the supply chain achieving further savings over and above the pricing schedules within tendered submissions.
Bracknell Forest Borough Council acted as the lead authority on behalf of SENT and provided all administration and resources necessary, saving Thanet the cost of this provision and all associated costs.
In order to shorten the timescales and realise savings more quickly, it was decided to utilise the existing OGC Buying Solutions Telecoms Service Framework Agreements. This would avoid the need to go through a full EC procurement whilst ensuring that all suppliers had been fully pre-qualified. Under the new EC Consolidated Procurement Directive, where framework agreements are used, there should now be a mini competition between all framework suppliers. A “broadcast” was therefore sent out through the OGC Buying Solutions and interested parties were subsequently issued the ITT in early June 2005. An e-auction between the tenderers was held in early July 2005.
The tenders were assessed by a cross-departmental Evaluation Team from various authorities. Thanet participated both from a procurement and IT premise with the tender evaluation methodology taking account of a range of service quality issues, including technical capacity, transition and billing services as well as price and cost of change. Prior to tender submission, the cost/quality split had been set at 45%/55%. Based on the results of the evaluation exercise it was recommended to proceed with Global Crossing (UK) Telecommunications Limited as the preferred supplier. Sensitivity analysis revealed no change to the recommendation.
Assuming all of the current SENT Members place orders for their maximum periods, on average 3.2 years after taking account of expiry dates of existing arrangements; this would represent total savings of around 30%, i.e. up to £1.6m. All figures are approximate and assume that the current levels of use continue. Additional Members are expected to join SENT at a later stage thereby increasing the total savings through volume discount.
Currently, Thanet District Council is the only participating Kent authority however, there is growing interest from Kent Buying Consortium members and this is likely to realise further take up within 2006.
Thanet have signed a 2-year contract commencing 1st February 2006.
In February 2004, the Council received the final report from the Audit Commission into a review which had taken place on Risk Management which concluded that:-
"A strategy for the implementation of risk management has not been drawn up. The Council would find this helpful to steer the corporate approach and ensure all the building blocks are put in place for example:
The Council has not yet developed strategies and action plans for assessing, controlling, monitoring and reviewing identified risks at both corporate / strategic and operational levels."
It was identified by officers that, to enable the Authority to monitor and review these risks, Risk Register software is required so that all Officers with responsibility for strategic and corporate risks would be able to access the necessary information, which will be stored within this Register.
A budget was identified for the acquisition of this software, and an Officer Steering Group was established to oversee the acquisition, including representatives from Risk Management, Internal Audit and Information Technology.
The market was researched, drawing on the experience of these and other officers. Due to the specialist nature of the software, three companies who are most widely used and recommended in the Local Authority market were identified.
The identified companies made presentations to the Group on site in Thanet, and were evaluated according to pre-determined criteria.
The Risk 2003 and LACHS 2000 software came in at the cheapest price, and the Group agreed that these packages had room for growth as Risk Management became more embedded within the Authority and awareness was raised.
The necessary CPR exemptions were sought (as only 3 quotes, rather than 4 as required for £10-25k procurements were obtained) sought and the package was acquired and implemented.
Reactive, planned and recurring maintenance services to the Council's housing stock and reactive maintenance only to commercial and municipal properties are currently procured using a term partnering contract.
The award of the service to Mears Ltd. followed evaluation of tenders received on a quality and financial basis (a marked departure from lowest price only). Stakeholder and client department representatives were engaged in the award process and the project provides for process development, establishment of performance targets, their measurement, monitoring and the implementation of predetermined year on year improvements in service delivery.
Thanet District Council and Canterbury City Council worked together on the procurement of a Customer Relationship Management system, which led to a sizeable reduction in costs to both Authorities.
The Customer Services Managers for each Council worked together to draw up a tight system specification for the CRM system. Legal Teams from both Councils shared the checking of submitted tender documents as did the IT departments. The financial checking of Companies selected to tender was also shared by the Audit teams from both Councils.
This joint working didn’t just save money in the final cost of the system but also the sharing of the workload lead to a saving in staff resources required by both Councils to complete the tender specification and selection processes.
Procurement
E-mail: contracts@thanet.gov.uk
Tel: 01843 577111