PAPER B2

43/06

Purpose : For Decision

DECISION UNDER DELEGATED POWERS

DECISION CANNOT BE TAKEN BEFORE MONDAY, 14 AUGUST 2006

Title : Procurement of Strategic Transformational Partner

Short Term Procurement Projects

REPORT TO THE CABINET MEMBER FOR THE ECONOMY, THE CUSTOMER, COMMUNICATIONS, LEISURE AND TOURISM

PURPOSE

1. To formally accept the outline business case produced by PA Consultants as performance of their contract to advise, and as the basis for further developmental work.

2. To appoint PA consultants to undertake work, as proposed by letter dated 26 June 2006, to:

· procure a Strategic Transformational Partner

· improve the corporate procurement function

BACKGROUND

3. The detailed proposal is set out as appendix 1 (confidential).

4. Appendix 2 reproduces a report to Cabinet on the 11 October 2005 and the record of the decision.

5. The October 2005 report sets out the outcome of a procurement exercise to identify advisors for two phases of developing a strategic partner – an outline business case and a procurement exercise.

6. The decision to appoint PA consultants on 11 October was subject to completion of an initial 6 week feasibility study. That study was completed satisfactorily and the outline business case developed during the first quarter of 2006.

7. The outline business case delivered by PA is of a quality which can be accepted both as delivering the brief given, and to be the basis for the procurement of a strategic transformational partner.

8. As an exercise separate from the principal consultancy contract PA consultancy have advised on the potential efficiencies to be delivered through new approaches to corporate procurement.

9. Undertaking two exemplar projects will enable the Strategic Transformational Partnership project to deliver efficiencies during the developmental phase. Activity proposed by the exemplar projects will realise up to £500,000 per annum, on a recurring basis, from the conclusion of the pilot projects. The total cost of the developmental and procurement consultancy is £99,050.

STRATEGIC CONTEXT

10. Three aims set out in Aim High under the Run a High Performing Costs Effective Council objective are:

· Ensure that all services are cost effective and offer maximum value for money

· Create effective partnerships where they improve service delivery, cost effectiveness or community engagement

· Be an exemplar of good practice in the appropriateness and use of central systems and processes

CONSULTATION

11. Staff and trades unions have been engaged in the development of the Outline Business case and no discrete consultation has taken place in relation to the decision to proceed to the next phase, and to undertake a procurement project in parallel.

FINANCIAL/BUDGET IMPLICATIONS

12. The £99,050 cost of undertaking the developmental phase and the procurement project are provided for within a one off reserve earmarked for this purpose. Efficiencies realised from the procurement project will form part of corporate budget and priority setting, and the delivery of the Medium Term Financial plan

LEGAL IMPLICATIONS

13. When procuring the delivery of services the Council is under an obligation to achieve Best Value and to ensure compliance with European Union Procurement Directives.

The Legal Department has assessed the developmental phase of the procurement project and concluded that it forms part of the original remit which the Council specified in its Invitation to Tender. Whilst it is clear that the specific nature of the work has evolved and developed from that originally envisaged by the Council, this is seen as a natural corollary of the evaluation work which was requested of, and undertaken by PA.

The original threshold for the work to be undertaken by PA was £153,000. Once this work contemplated in this report is completed, the cumulative value of work awarded to PA will be approximately £180,000 plus expenses amounting to an additional 10%. The risk to the Council of having exceeded the original threshold is low as this increase is not so significant as to warrant a further tender process.

From this point forward however, the Council will need to be cognisant of the cumulative value of work awarded to PA Consulting and should any further work be proposed beyond that contemplated herein, it will need to be subject to a more robust award process.

OPTIONS

14. Advice from PA, in the form of the outline business case and the procurement diagnostic is that the development of the Strategic Transformational Partner and the parallel delivery of the procurement project will result in the development of a fit for purpose Strategic Transformational Par5nership, which will contribute significantly to the delivery of the Medium Term Financial Plan.

The alternatives to accepting the 26 June proposal from PA are to do nothing or to undertake the development work in a different way, using other advisors. To take either of these options would be to miss the opportunity to make a significant contribution to delivery of the Medium Term Financial Plan with immediate effect.

EVALUATION/RISK MANAGEMENT

15. The efficiencies to be released by the procurement project and by the development of the Strategic Transformational Partnership, are required within the current and subsequent financial years.

16. In order to ensure that the project stays on target, a project group has been formed and will agree and manage the delivery of the proposed consultancy activity as a formal project.

RECOMMENDATIONS

17. To accept the proposal from PA and to deliver that proposal as a project.

BACKGROUND PAPERS

18. Outline Business Case

Proposal

ADDITIONAL INFORMATION

None

APPENDICES ATTACHED

Appendix 1 (confidential) – Copy of the letter from PA Consulting to John Lawson dated 26 June 2006

Appendix 2 – Copy of the report to Cabinet on 11 October 2005 and the Record of Decision

Contact Point : John Lawson ( 823203, email: [email protected]

JOHN LAWSON Director of Partnership, Policy and Performance and Deputy Chief Executive

COUNCILLOR TIM HUNTER-HENDERSON Cabinet Member for the Economy, the Customer, Communications, Leisure and Tourism

Decision : ………………………………………………………………………………………..

Signed : ………………………………………………………………………………………

Date : …………………………………………………………………………………………..