Private Sector Involvement in Delivering Disciplined Departments’ Services Selected Case Studies Nicholas Brown 28 Octo

1. Private Sector Involvement in Delivering Disciplined Departments’ ServicesSelected Case Studies Nicholas Brown28 October 2005

2. Private Sector Involvement in Delivering Disciplined Departments’ ServicesSelected Case Studies Defence Fixed Telecommunications Service ProjectThe Met’s Gravesend Firearms and Public Order Training FacilityThe Met’s First & Second wave outsourcing of IT/IS telecommunications

3. Case Study OneThe Defence Fixed Telecommunications Service Project • Authority: UK Ministry of Defence (‘MoD’) • Service Provider: British Telecommunications (‘BT’) • Site: multi-site • Value: (First wave) £1.5 billion; (Second wave) £3 billion • Model: PPP • Term: (Second wave) five years (2005 -2010)

4. Case Study OneDefence Fixed Telecommunications Service Project – First wave outsourcing • In 1997, BT was awarded the outsourced contract for the operation of the MoD’s fixed telecommunications services, providing MoD’s 250,000 civilian and military staff with an secure communications service in 13 countries • Key achievements: • The achievement of major cost savings, worth £15m per year, • through rationalization of the telecoms service, • In particular, the consolidation of 46 distinct services, provided by four separate agencies, into six core solutions managed by BT from one location

5. Case Study OneDefence Fixed Telecommunications Service Project – Second wave outsourcing • Challenges: • An accelerated procurement timeline • Obtaining a cost reduction in conjunction with service improvements • Securing stakeholder support throughout the project • Guaranteeing a competitive contract despite having only one bidder

6. Case Study OneDefence Fixed Telecommunications Service Project – Second wave outsourcing • An extended £3bn contract for BT, providing the MoD with: • The introduction of new technology • £120m new secure core digital network • New Network benefits to contribute to operational effectiveness and future capabilities • Customers bandwidths will be expanded from 2MBs to 140 MBs • Consolidation of telephony and data services • The ability for the MoD to integrate different defence infrastructures • A more efficient, scaleable and flexible network

7. Case Study OneDefence Fixed Telecommunications Service Project – Second wave outsourcing • MoD focus: • Strengthening the existing contractual provisions • Addressing issues raised by the National Audit Office • Timely procurement: • Extended contract negotiated in advance of the 1 April 2005 deadline, thus ensuring continuity and stability

8. Case Study OneDefence Fixed Telecommunications Service Contract – Features • Technological innovation • Gradual migration of Defence Fixed Telecommunications Service services to new digital core network • New network provides necessary security and redundancy features to meet MoD’s business and operational requirements • Network may support VOIP solutions for possible future implementation • Price challenge provisions • Financial transparency and protection in a fast changing telecom pricing environment

9. Case Study OneDefence Fixed Telecommunications Service Project – Features • “No service, no pay” provision • Reinforces the value for money offered under the contract • Congruent with PFI and PPP principles • Inclusion of detailed and robust exit management provision • To enable a full re-procurement process towards the end of the contract

10. Case Study TwoMetropolitan Police Authority (‘The Met’) – Firearms and Public Order Training Facility, Gravesend • Authority: The Met • Sponsor and Service Provider: Equion plc • Site: Gravesend, Kent • NPV Value: £55 million • Model: contractor-debt PPP • 25-year concession

11. Case Study TwoMet – Firearms and Public Order Training Facility – the background • Police firearms training being undertaken in various locations, which created inefficiency • The Met was unsuccessful in obtaining the right to continue training at the existing Lippet Hill facility • Lippet Hill and Hendon facilities were outdated • The Hendon site was inconveniently located within a residential area and on highly valuable land • Need for new best of kind training facility

12. Case Study TwoMet – Firearms and Public Order Training Facility – The new facilities • State-of-the-art facilities in one location • The opportunity to simulate emergency situations through the use of: • mock roads, houses, shops, a bank, a pub, a night club, a football stadium • a life-size section of plane • mock underground stations with full-size carriages • Live fire training on pistols, carbines and rifles with ranges up to 600 metres outdoor

13. Case Study TwoMet – Firearms and Public Order Training Facility – The services Cont’d… • laser ranges • Indoor and outdoor ranges • Petrol bombs and bricks • Classrooms and lecture theatres • An abseil tower • Stables for 10 police horses • Accommodation for 300 officers at a time • The opportunity to book accommodation and time on the ranges directly via phone with Service Provider

14. Case Study TwoMet – Firearms and Public Order Training Facility – key challenges • Land acquisition • A planning inquiry • s106 agreements with the Gravesend Council • Party wall agreements with neighbouring land owners • Overage and profit sharing arrangements • Third party agreements • Securing vacant possessions from existing occupiers • Redevelopment of surplus land • Rights of way issues • Crane over-sailing rights

15. Case Study TwoMet – Firearms and Public Order Training Facility – Land acquisition issues • Planning • Issues over noise level, safety and security • Temporary closure of a public foot path that crossed over the Milton ranges next to Gravesend • Due to the closure a temporary protocol was agreed with the planning authority

16. Case Study TwoMet – Firearms and Public Order Training Facility – Land acquisition issues • Property: • Acquiring a lease of the Milton ranges from the Royal Society for the Protection of Birds • Prolonged time needed to come to an agreement that would both preserve wildlife and allow the military to continue carrying out training • Obtaining overshoot rights for the outdoor ranges from various adjoining landowners

17. Case Study TwoMet – Firearms and Public Order Training Facility – Land acquisition issues Cont’d… • No adjacent or adjoining public highway • Obtaining easements from the Railtrack for installation of additional services to the Milton site.

18. Case Study TwoMet – Firearms and Public Order Training Facility – Land acquisition issues • Service level specification • Unique technical requirements • For example – minimal atmospheric lead residue on the ranges

19. Case Study ThreeMet – First & Second wave outsourcing of IT/IS telecommunications – Background • First Wave outsourcing: • 1999 review of all non-core services • How best to structure single outsourcing procurement package? • Which parcels suited to the programme? • Four parcels identified for non-computing service: accommodation and vehicular maintenance

20. Case Study ThreeMet – First & Second wave outsourcing of IT/IS telecommunications – Background • Five parcels (comprising the bulk of the procurement in terms of value) identified for information services and telecommunications: • Radio • telephony • command and control • crime reporting information systems – remote access • Corporate desk-top system

21. Case Study ThreeMet – First & Second wave outsourcing of IT/IS telecommunications – Issues • First time these services had been outsourced as managed service. • Appropriateness of outsourced services, for example car fleet maintenance • The inventory of information services was not ascertained. The managed service provider did not know on day one how many desktops there were across the many sites managed by the Met.

22. Case Study ThreeMet – First & Second wave outsourcing of IT/IS telecommunications – Issues • The time scale of the project made it impossible to conduct a stock take. The tenderers made assumptions as to volume. • A resulting emphasis and distortion of change control provisions. • Where a single contractor has day-to-day management of the vast array of services, proactive and skilled contract management is essential

23. Case Study ThreeMet – First & Second wave outsourcing of IT/IS telecommunications • Second wave outsourcing • Fresh procurement exercise undertaken in 2004 • Contract will consolidate the desktop support and networks management contracts with telephony and crime reporting system • Recognizes the convergence of technologies – e.g. voice and data convergence • Maturing of know how within the Met in relation to best practice in the managements of ISIT, i.e. to get wise to the habits of some IT outsourcing contractors

24. Case Study ThreeMet – First & Second wave outsourcing of IT/IS telecommunications • Recognizing the impact of technology economics on contractual risk allocation • For example – hand-held radio damage risk - protective casing versus disposables. • Recognizing the sharing of unmanageable risk • For example – Radio reception service levels • Contract management training after the contracts are signed

25. Selection of relevant experience Wiltshire Communic’n Centre Wiltshire Joint Emergency Services United Kingdom Louis Trichardt PPP prison South African Correctional Services Republic of South Africa Wattisham Serviced Accommod’n Wattisham Housing Authority United Kingdom Bloemfontein PPP prison South African Correctional Services Republic of South Africa Defence Animal Centre UK Ministry of Defence United Kingdom Sandwell & West Birmingham Ambulatory Care Unit Sandwell & West Birmingham Hospitals NHS Trust United Kingdom Harrogate Army Foundation College UK Ministry of Defence United Kingdom Firearms and Public Order Training Facility Metropolitan Police Authority Kent United Kingdom Combined Emergency Services Control Scheme Cleveland Police Authority United Kingdom Project Inspire UK Ministry of Defence United Kingdom