Pegasus Applications ITN Ranges Full Business Case

Over the past eighteen months the Pegasus programme (next generation of MPS ICT outsourced contracts and partnering arrangements) has been progressing the requirements and procurement of Digital Policing’s two tower Infrastructure and Applications Services Management strategy, to replace the existing multi-supplier arrangements.

The programme has concluded the procurement of the Applications management services as part of this strategy.

The Purpose of this decision is to:

• Present the Full Business Case for the Applications project based on ‘High Benefit Case’ and ‘Low Benefit Case’ bidder responses at the Invitation to Negotiate (ITN) stage.

• Secure approval from the Deputy Mayor for Policing and Crime for this Full Business Case based on the Low Benefits Case (highest prices submitted at ITN) and so provide the basis for delegation of the signature of the Applications Service provider contract later in the year based on the best and final offer (BAFO) submission.

The Deputy Mayor for Policing and Crime is recommended to approve:

1. Award to preferred bidder of the Applications Services contract for an initial term of five years to the value stated in the exempt part 2 section, with the option to extend for two further one year periods. Also to approve additional headroom in the Applications services contract at the amount stated in part 2, with spend against this headroom based on scheme of delegation.

2. That MPS can initiate and award contracts according to applicable scheme of delegation for work needed on exit and transition related services.

3. Delegation of the approval of the Applications FBC post the identification of the preferred bidder to the Chief of Corporate Services, Director of Commercial Services, Director of Finance and Chief Digital and Technology Officer, on the condition that the benefits lie within the ranges specified in the Approvals, which is detailed in Part 2. Further that the contract for the preferred bidder can be signed by the Director of Commercial Services post approval of that FBC.

1. Introduction and background

1.1. The Full Business Case (FBC) identifies cashable and non-quantifiable benefits and further has established value for money based on research and analysis by a global external technology research and advisory company, Gartner.

1.2. To enable continuity of services until the services are transitioned to the Preferred Bidder and to deliver some transition related activities, MPS is continuing the existing services through current contract mechanisms. This follows a Legal and Commercial risk assessment of options available. Considerations included timescales, risk to service and the prevailing COVID–19 situation and we find there is no alternative but to use the mechanisms within the current contract.

2. Issues for consideration

2.1. The current Applications Management contract was coming to an end and so needed to be replaced – this presented an opportunity for Digital Policing (DP) to take control of the timing for going to market to secure better value, improved control and a commercial and contractual platform that is fit for the future.

2.2. The drivers for the economic case across both cashable and non-quantifiable areas were determined prior to and during procurement. This involved, early engagement with the Digital Policing Board, validation with incumbent providers, market validation with a globally recognised technology research company, the use of a negotiated procedure (CPN) and external benchmarking.

2.3. The economic value being released as a result of the new contract is consistent with the simplification and the management of the contract and reflects advances in technology and process maturity since the current contract was let in 2016.

2.4. In addition to any cashable benefits, other non-quantifiable benefits accrue as a result of operational delivery, commercial management and an improved end user experience. In summary the drivers for these benefits are as a result of the below with greater detail provided in the Part 2;

• Met-led across design and transition

• Alignment to a strengthened retained organisation

• Requirements and contract shaped by those owning the service

• A programme culture and governance of challenge and support

• Simple but powerful performance management

• Negotiated procedure accommodates market, bidder and external (e.g. Gartner) input

• Single supplier accountable for Infrastructure service delivery leads to a streamlined service for applications with fewer hand-offs

• Lessons included from prior contract, the recent infrastructure procurement, wider government (e.g. Outsourcing playbook), market and other large MPS programmes (e.g. Command & Control/Connect)

2.5. The delivery of the new service will be across a single transition phase, allowing MPS to manage risks and the realisation of benefits effectively.

3. Financial Comments

3.1. The costs and savings and the associated funding position for this contract are detailed in the Exempt Part 2.

4. Legal Comments

4.1. The Mayor’s Officer for Policing Crime is a contracting authority as defined in the Public Contracts Regulations 2015 (“the Regulations”). All awards of public contracts for goods and/or services valued at £189,330 or above will be procured in accordance with the Regulations.

4.2. Paragraph 4.8 of the MOPAC Scheme of Delegation and Consent provides that the Deputy Mayor for Policing and Crime (DMPC) has delegated authority to approve business cases for revenue or capital expenditure of £500,000 or above.

4.3. Paragraph 4.13 of the MOPAC Scheme of Delegation and Consent provides that the Deputy Mayor for Policing and Crime (DMPC) has delegated authority to approve all unforeseen variations and extensions to contracts with an original value of £500,000 or above, when the variation or extension is greater than 10% of the original value and/or is for a period of more than 12 months

4.4. Paragraph 4.14 of the Scheme provides that the DMPC reserves the right to call in any proposal to award a contract valued at £500,000 or above.

4.5. Paragraph 7.23 of the Scheme provides that the Director of Strategic Procurement has consent to approve all proposals to award of all contracts with the exception of those called in through the agreed call in procedure.

4.6. Regulation 72 of the Public Contract Regulations 2015 permits contract modifications within specific parameters. In this case the modification required is permitted under Regulation 72.

4.7. The procurement has been conducted in accordance with the Public Contracts Regulations 2015 (as amended), and specifically Regulation 29 which governs use of the Competitive Procedure with Negotiation.

5. Commercial Issues

Required Goods and Services

5.1. The intention is to procure an Applications Management Provider to replace the existing Applications Management supplier. The services provided by this new provider cover the following three areas;

• Applications Management Services (Management, Maintenance, Change, Support)

• Tower Management Services, aligned to the Industry standard ITIL framework

• Security Services, to ensure secure running of the applications estate and integrating with the wider MPS security function.

5.2. Optional services that may be required over the course of the contract covering

• Cloud Hosting Services

• End User Software Services

5.3. Managed Services; a set of contracts that MPS continues to own and which are managed, to differing levels of maturity, by the applications provider.

Procurement approach

5.4. The MPS utilised a compliant procurement process following the Competitive Procedure with Negotiation (CPN) under regulation 29 of the Public Contracts Regulations (PCR). The procurement process was executed with external commercial assistance and validated by external legal counsel (TLT).

5.5. A range of appropriate procurement routes were assessed. For the above services an OJEU Competitive Procedure with Negotiation (CPN) was selected. The basis for this was

• Ensures that the MPS benefit from the best value available in the market; more in-depth negotiation would be required as opposed to just clarification/dialogue as suppliers will have different offerings.

• The applications supplier will deliver a run and maintain services which requires some detailed negotiation as the MPS IT estate is multifaceted.

• This is a complex procurement requiring the need to negotiate and have flexibility in key areas. The route and procedure that has been selected is proportionate to the breadth and complexity of the services required.

• CPN provides MPS the flexibility to break a complex procurement into separate stages (2-4 stages) which take account of the complexity and criticality of the services with the option to negotiate. This enabled the MPS to more deeply interrogate the supplier's bids and to ensure final bids were consistent with the MPS's requirements.

• Based on the Government Outsourcing Playbook rule 6 the merits of the routes to market and lessons learned from previous procurements were considered and it was decided that the preferred option was to procure a new Applications Management services supplier using the CPN process.

• Approval to use the CPN process was sought and received from MOPAC in2020 (PCD 870).

5.6. The OJEU Contract Notice for Applications Services was placed on Tenders Electronic Daily (TED) on the 23rd of October 2020.

5.7. Following this release, sixty five (65) organisations expressed an interest by requesting the SQ documentation via the eTendering portal, Bluelight. Many of these organisations had attended the Virtual Market Engagement event held on 14th August 2020.

5.8. The MPS shared, with the consent of all the attendees, contact details between SMEs and non-SMEs that attended the Virtual Market Engagement. 15 SMEs in total had their details shared. Progression through the procurement pipeline is summarised below;

Key Contract Terms

5.9. The key terms of the proposed contract(s) are as follows:

• The contract will be awarded for an initial period of 5 years, with two 12 month extension options.

• The Applications Contract is heavily based upon the Cabinet Office Model Contract, it represents a fair and balanced approach in delivery of the infrastructure services.

• The Applications Contract has been developed in light of previous procurements with the MPS, notably the Infrastructure procurement carried out in 2020, and takes account of comments received from previous bidders and the market.

6. GDPR and Data Privacy

6.1. The programme does not use personally identifiable data of members of the public, so there are no GDPR issues to be considered.

7. Equality Comments

7.1. As this is an extension of an existing service this work does not change any aspects relating to equality or diversity.

8. Background/supporting papers

8.1. MPS Report.