The project issues
The London Borough of Tower Hamlets (LBTH) undertook an OJEC tendering process for the supply of PCs and laptops to refresh their estate of some 4400 PCs, as part of a high profile XP project. Socitm Consulting won a competitive tender to QA the process and ensure the Council followed the correct procedures and achieved best value.
LBTH were keen to ensure that the ITT process and any resulting contract did not expose them to any unnecessary degree of vulnerability and would safeguard best value. Our initial review was to improve the original ITT sent to suppliers, to make it more robust and easier to measure. To expedite the process, the revised ITT had mandatory Heads of Terms included so that the contract negotiation phase would be quicker.
The Socitm Consulting solution
The ITT was spilt into 3 phases - pilot, supply, and then supply and services, each one requiring sign off before the commencement of the next and governed by a separate contract. This ensured both supplier and LBTH met their deliverables before moving forward, protecting both parties and providing an excellent yardstick.
We took relevant LBTH staff through the Socitm selection criteria framework to ensure all ITT responses were compliant and that comparison and selection were conducted in a fair and transparent manner. This also engaged the LBTH team, ensured they were clear on what process needed to be followed and why, and will also help the ICT team follow best practice in future procurements.
LBTH then decided to lease the hardware, an option stated in the ITT, and we therefore set about ensuring the lease terms were both compliant with the GCAT Schedule and favourable to the Council.
To keep acquisition costs down we also addressed the internal procurement process within LBTH to ensure an end to end approach. The results included:
- A ground-breaking supplier contract that was outcome based and used clear KPIs to measure not only value for money, but quality of service and performance.
- A standard set of items that can be ordered under the lease agreement and that can change within the scope of the contract to ensure they are fit for LBTH’s purposes for the duration of the contract.
- A streamlined internal procurement process with clear sign off points, which gave LBTH the ability to actively manage the contract using pre agreed tools and measurements.
- Communication plans involving all relevant purchasing parties within LBTH, to ensure all are signed up to the new processes.
On taking up his role, LBTH’s new ICT Service Head revisited the XP rollout project and created a programme that saw the whole infrastructure improved. This was a high profile programme led by Paul Ingram. The programme approach added more value to the XP project as all features of the XP solution could be exploited on the new network. The division of the contract into phases meant that these changes could be incorporated without the need for lengthy contract re-negotiation.
We proposed and carried out a ‘lessons learned’ review to aid best practice in the future, by ensuring all parties understood how to maximise leverage and flexibility from future supplier contracts This was a constructive review, which was sensitively led by our procurement specialist. The resulting recommendations were acted upon throughout all levels of the organisation and showed clearly LBTH’s commitment to achieving best practice.
The benefits to the client
Socitm Consulting helped LBTH achieve savings of over 45% on desktop hardware and 26% on laptops compared to the previous per unit costs. This enabled LBTH to meet their strategic aim of moving into the upper quartile of the Socitm benchmarking KPI 4 - Acquisition costs of workstations. Using the process and performance reviews written into the supplier contract, LBTH has increased these savings by a further 4%.
The creation of a streamlined internal procurement process and a robust business case process realised savings of over £40k in the first three months of operation. Savings are also evident in reduced administration time for ordering, with procurement, finance, IT and contract teams working together coherently.
By taking a wider view, we were able to help LBTH strengthen their procurement service, both in terms of process and people. Emphasis was placed on ensuring LBTH staff were positively engaged in the decision-making process, thus putting LBTH in a strong contractual position and engaged with a supplier who is committed and clear about what they are expected to deliver. A key element in this was our input to the legal aspects, which enabled LBTH to let the contract with the confidence that the best value solution had been achieved and that they could show savings from the outset.
Incorporating Socitm benchmarking, but with the addition of quarterly price and service reviews, the resulting contract and lease is a flexible but managed solution that will serve LBTH for the years to come.
The ‘lessons learned’ review assessed all facets of the project including work undertaken by our consultants; this was important to demonstrate that the review would be comprehensive and objective. The experience of our senior procurement specialist who led the review ensured cooperation by all parties, and a genuine desire to aim for clear processes, checkpoints and due diligence in the future.
Contract management is core to any supplier performance and cost assessment, and LBTH has been able to retain Socitm Consulting for the interim Contracts Management role whilst the post is advertised. This ensures consistency in contract knowledge of the supply agreement and no gap in the management of the contract whilst new personnel are found.
Client organisation: London Borough of Tower Hamlets
Client contact: Jim Roberts, Service Head, ICT, 0207 364 5000 firstname.lastname@example.org
Lead consultant: Vikki Wide
Project no: 4830
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