Report of: Karen Robinson, Building Schools for the Future Project Director
Subject: BSF Gateway Review 3 - ICT Health Check
rdDate: 3 June 2008
PURPOSE OF THE REPORT
1. The purpose of this report is to inform the Executive of the:
th; outcome of the 4ps Gateway 3 ICT Health Check which took place on 19 March
2008 and the;
; Action Plan developed to address the recommendations from the review.
2. All BSF projects are required to undergo a Gateway 3 review at the point just ahead of
contract award. The purpose of the review is to ensure that the investment decision can be
3. Middlesbrough‟s BSF programme is unusual in that it comprises of two separate
procurement exercises; Design and Build and ICT. These separate procurement exercises
have different dates for contract award. Therefore advice was taken from the 4ps on the
best way to proceed with the Gateway 3 Review. The 4ps advised that Middlesbrough
should undertake a full Gateway 3 Review for the Design and Build contract and a smaller
„Health Check‟ for the ICT contract.
4. The process followed for the ICT Health Check was:
; BSF team forwarded relevant documentation to 4ps
; BSF team gave a presentation on the overall project but particularly focused on the
ICT procurement process and contract
; 4ps review team challenged the BSF team on key issues arising from the
documentation submitted and the presentation.
5. The 4ps ICT Health Check found that the ICT procurement outcome meets the business needs of the project and that this is documented within the ICT Final Business Case. The conclusion from the report states:
“The Project has conducted a robust procurement process which is well-placed to
deliver an effective contract for the managed service provision of ICT to the secondary
schools in the area. The project team operates within a clearly defined structure, which
appears to maximise the benefits of the Council‟s decision-making process. Plans are
being developed to ensure that transition to the next phase will be smooth and the
project should deliver the intended benefits.”
6. The full report is attached as Appendix A. The 4ps Review Team made five recommendations for the BSF Team to consider. An Action Plan has been developed to address these and is attached at Appendix B.
ACTIONS TAKEN TO ADDRESS THE RECOMMENDATIONS
7. The five recommendations made by the 4ps were:
i. In respect of value for money, plans are in place to benchmark prices from the ICT
contractor when they begin the process of procuring the necessary hardware for the
operation of the managed service. It is recommended that the Council consider the use
of a market testing exercise in these circumstances especially as robust benchmarking
data for such costs are not yet available.
ii. A protocol for joint working between the ICT and Design and Build contractors in the
operational phase of the project should be produced.
iii. The Council has agreed that the current selected bidder will take the benefit of a
collateral warranty from the M&E sub-contractor attached to the main D&B contract in
relation to its work in the installation of the passive data network. This could involve
detailed negotiation of a Schedule to the ICT contract post close of dialogue and
appointment of selected bidder. In the light of the restrictions on such negotiations now
in place the Council should assure itself of the potential outcomes arising from this
iv. There is an emerging issue associated with the overall management of change issues
and in particular consideration of this at a strategic level to encompass the whole BSF
project within the broader Council change programme.
v. The Council has allocated budget for a Contract Manager within its team and it should
now develop the detailed arrangements for the future management of the contract.
8. Recommendation (i) relates to the need for benchmarking of prices from the ICT contractor. A section has been included in the ICT Final Business Case that details the benchmarking exercises to be undertaken at least four months prior to service commencement for each school. This requirement will be discussed with the selected bidder and included in the ICT contract.
9. Recommendation (ii) relates to a significant project risk - the integration of the ICT and D&B - which features on the BSF risk register. An officer has been identified and is performing the „Integrator‟ role and a protocol to standardise interaction between the ICT and D&B contractors and the Council is currently being produced.
10. Recommendation (iii) has been addressed by requesting specific advice from external legal
advisors, which has confirmed that Middlesbrough Council‟s approach is sound.
11. Recommendation (iv) relates to the projects‟ change management process. This was
detailed in the Outline Business Case and has been cross-referenced with an update in the
ICT Final Business Case. Delivery of the pre-implementation stages of the process is now
complete and work has commenced on the implementation stage.
12. Recommendation (v) relates to arrangements for management of the ICT contract. Funding
has been identified for a contract manager and the CF&L ICT Team are currently developing
detailed management arrangements in consultation with other relevant Council departments.
13. The BSF project faces many risks and these are detailed in the BSF risk register. The
primary purpose of a 4ps Gateway Review 3 is to justify the contract award and in particular
to confirm that a robust procurement exercise has been followed and the contract will deliver
a timely, affordable and achievable outcome. By definition therefore, the Gateway Review
process helps to mitigate many of the procurement related risks facing the award of the ICT
FINANCIAL, LEGAL AND WARD IMPLICATIONS
14. Financial - There are no specific financial implications. The overall BSF financial
implications are documented in the BSF Strategic Business Case, the Outline Business Case,
the ICT Final Business Case and the BSF risk register.
15. Legal - There are no specific legal implications from this process. The overall BSF legal
implications are documented in the BSF Strategic Business Case, the Outline Business Case,
the ICT Final Business Case and the BSF risk register.
16. Ward Implications - There are no direct ward implications arising from this procurement
17. That the Executive note the outcome of the ICT Health Check and the Action Plan that has
been developed to address the recommendations arising from the review.
18. To assist progress in delivering the overall BSF programme, which aims to transform
secondary education across Middlesbrough.
19. No background papers were used in this report.
AUTHOR Rachel Steel, Building Schools for the Future Project Officer Tel No 729 615
Address: BSF Team, Ground floor, Civic Centre, Middlesbrough, TS1 2QQ
APPENDIX A – 4ps Gateway 3 ICT Health Check Report
4ps Health Check – Investment Decision
Version number: Draft 1.0
Date of issue to PO: 25 March 2008
Authority: Middlesbrough Borough Council
4ps Health Check date: 19 March 2008
4ps Health Check Team Leader: Norman Ballantyne
4ps Health Check Team Member: Jim Busby
In order to promote full and frank exchange of views during the review process and for the purposes of deliberation and production of the recommendations contained herein, this Health Check report is confidential to the project owner in their capacity as employee of the procuring authority.
This has been derived from OGC‟s Successful Delivery Toolkit which is a Crown Copyright Value Added product developed,
owned and published by the Office of Government Commerce. It is subject to Crown copyright protection and is reproduced under licence with the kind permission of the Controller of HMSO and the Office of Government Commerce.
The aims of the project:
The Council wants Middlesbrough to be proud to be a learning community where all have access to high quality education and training, which meets their needs and aspirations and gives them the skills, knowledge and vision to develop a vibrant local and national community.
The aim of the BSF project is to provide buildings, ICT and infrastructure to ensure the delivery of the Education Vision. New and refurbished buildings appropriate to a 21st century curriculum can motivate staff and students to achieve a step-change in educational standards.
All Middlesbrough‟s secondary education school estate is being dealt with as part of this single BSF wave and no further schemes are required to be undertaken.
The driving force for the project
Middlesbrough‟s corporate vision has the education and care of young people at its foundation. The Mayor‟s Reduction Agenda sets out 20 improvement priorities and Building Schools for the Future will make a major contribution to these. This ambitious local agenda has been linked to the national Every Child Matters priorities through Middlesbrough‟s planning processes and through its key strategic partnership arrangements.
The procurement status:
The project has reached Selected Bidder status following an EU compliant competitive dialogue process and is currently awaiting the signature and return of the Selected Bidder letter.
Purposes of the 4ps Health Check
The primary purpose of this 4ps Health Check is to confirm the business case and benefits plan now that the bid information has been confirmed and check that all the necessary statutory and procedural requirements were followed throughout the procurement process. The detailed purpose statement is contained within appendix A.
This 4ps Health Check was carried out on 19 March 2008 at the Civic Centre in Middlesbrough at the request of The Project Owner. The team members are listed on the front cover.
The Health Check consisted of a limited document review by the members of the Health Check Team, prior to a project update/presentation by the project team, which also included the opportunity for further question and probing by the review team.
The Project has conducted a robust procurement process which is well-placed to deliver an effective contract for the managed service provision of ICT to the secondary schools in the area. The project team operates within a clearly defined structure which appears to maximise the benefits of the Council‟s decision-making process. Plans are being developed to ensure that
transition to the next phase will be smooth and the project should deliver the intended benefits.
Areas of good practice include:-
; The campus approach to ICT provision. This reflects the fact that Middlesbrough has a
number of smaller establishments which will need to take advantage of a more networked
approach to the managed service provision; the “virtual school” model. This illustrates how
ICT provision can be tailored to the needs of individual authorities within the broad
framework laid down by PfS.
; Forward planning from the Council in drafting the OJEU requirements widely and in such as
way as to allow considerable flexibility in awarding further work to the preferred bidder in
areas such as the primary programme.
; Well organised and efficiently managed procurement process with healthy bidder interest.
This has allowed the Council to retain the competitive nature of the bidding process up to
the close of Dialogue.
Findings and recommendations
1: Business case and stakeholders
The project meets the business needs and this is confirmed within the FBC.
The Draft FBC as reviewed appears to be robust, largely complete and follows PfS guidelines in all respects. PfS have been intrinsically involved in the project at all stages, have reviewed the FBC and offered some minor areas for enhancement.
There is no significant opposition to the proposals for secondary school provision under the BSF project and it is generally viewed positively and supported – in particular, the Mayor regards it as a
major priority for the town.
There are some TUPE issues arising out of the transfer to the new managed service provision but these are recognised and are being addressed.
Some additional detail in the area of transition/change management which will be required as project moves to next phase may be of benefit to the project.
In respect of value for money, plans are in place to benchmark prices from the ICT contractor when they begin the process of procuring the necessary hardware for the operation of the managed service.
It is recommended that the Council consider the use of a market testing exercise in these circumstances especially as robust benchmarking data for such costs are not yet available.
2: Assessment of the proposed solution
The solution as proposed does not follow the PFI/LEP route as result of the relatively small size of the overall programme and is the choice of the Council. However the approach appears to be effective and should deliver the required procurement. The compromise has been that this format will not provide refresh or local choice facilities, but the area-wide campus approach enables unified outcomes to be achieved. The separate procurement of ICT has however increased interface risks between this and the main BSF accommodation project (see section 3).
The project team has produced an operational interface matrix (including issues) which has been agreed with the ICT selected bidder. It has been further discussed with both final bidders for main BSF contract and will play a key part in the integration of ICT hardware into the Building design. A detailed list of interface issues between the ICT provider, the D&B contractor and the Schools/FM provider has been developed. A protocol for joint working in the operational
phase of the project should be produced.
As a result of contractual negotiations during the Dialogue phase the Council has agreed that the current selected bidder will take the benefit of a collateral warranty from the M&E sub-contractor attached to the main D&B contract in relation to its work in the installation of the passive data network. This could involve detailed negotiation of a Schedule to the ICT contract post close of Dialogue and appointment of selected bidder. In the light of the restrictions on such
negotiations now in place the Council should assure itself of the potential outcomes arising from this approach.
The new ICT contract has been drafted to include a facility to extend provision into primary schools to further integrate the Council‟s ICT offering across the whole spectrum.
3: Review of current phase
The project team have conducted a robust procurement and appear to have addressed all the issues raised. Consequently they have retained a low risk of any challenge to the process and should conclude a successful procurement.
The intrinsic links to the main BSF project are well understood and seem to be controlled and reasonably well managed.
An effective governance structure exists and appears to serve the project needs well.
4: Risk management
Risk management is recognised as a key part of the overall project management process and is addressed with an efficient process which contributes to the corporate system.
Key risks are monitored and reviewed regularly with the risk log updated appropriately.
There is a continuing risk in relation to the fact that two of the schools intended to become operational within the contract do not yet have Governing Bodies in existence as they are to be created out of the amalgamation of four currently separate schools. There was broad agreement in the Council that the risk of either school refusing to sign up to the required financial commitment in the Governing Body Agreement is low; In this respect, the Council should continue to take such action as is necessary to mitigate this risk. It is noted that the Council have already included a contingency in the project budget to cover the situation where one or both schools fail to sign. The other significant risk to the project is that of interface management between the main BSF D&B project and this ICT contract. This is understood and has been addressed with the recruitment of an “Interface Manager” (see section 2 above).
5: Readiness for next phase – readiness for service
There is an acceptance of need for a contract management approach as the ICT contract commences, but the detailed arrangements have not yet been developed. It is intended that the Council will use internal resources with skills gained during the contract with the current service provider to manage the new contract.
Funding/budget provision for the next phase (contract award and implementation) has been made available and there are plans for managing the perceived risks.
The new contract addresses future training requirements for staff and the full range of users.
There is an emerging issue associated with the overall management of change issues and in particular consideration of this at a strategic level to encompass the whole BSF project within the broader Council change programme.
The Council has allocated budget for a Contract Manager within its team and it should now
develop the detailed arrangements for the future management of the contract.
Purpose of 4ps Health Check: Investment decision
; Can the benefits in the business case be delivered by the contract?
; Has the procurement been appropriately managed?
; Is there continuing stakeholder support?
; Is the business ready for implementation?
; Are the contract management procedures satisfactory?
; Is sufficient funding available?
; Has all of the appropriate project documentation been produced in accordance with