Issue - meetings

(Report of the Assistant Chief Executive. To be introduced by the Cabinet Member for Finance and Carbon Reduction). The report seeks agreement to award a contract for a managed service for the Council’s SAP system.

Cabinet considered a report, introduced by the Cabinet Member for Finance and Carbon Reduction, which sought approval of an award of contract for the management of the Council’s SAP system to HCL Axon Ltd at a cost of £5,900,045 for six years and a maximum cost over the full ten years (including options to extend) of £8,289,878.

Exempt information pertaining to the report was considered under agenda item 34.

RESOLVED:

1. That the results of the procurement process be noted and in particular the evaluation summary set out in paragraph 1.1 of the exempt report;

2. That the contract would be for an initial period of six years, with options to extend for two further periods of two years, making a potential total of ten years;

3. That the contract for a managed service for the Council’s SAP system be awarded to HCL Axon Ltd at a cost for six years of £5,900,045 and a maximum cost over the full ten years (including options to extend) of £8,289,878; and 

4. That the award be subject to the London Borough of Waltham Forest also approving the recommended award (as the procurement process sought on provider for both boroughs).

Alternative Options Considered

The expiry of the current managed service contact has meant that a procurement process was necessary. To do nothing was not a viable option. The option of procuring solely for Haringey was considered but not expected to provide better value for money.

It was agreed early in the process that the Council would procure a replacement contract jointly with Waltham Forest – please refer to Procurement Committee report dated 28 July 2011 entitled ‘Procurement Approach for SAP Managed Service’.

The original intention was to procure and implement a joint platform i.e. both Councils would operate on the same system. During the Competitive Dialogue process, however, it became apparent that the level of re-implementation costs and resources required to establish a joint platform were much greater than originally anticipated. The business case was not proven and thus the decision was taken to appoint a supplier that could operate on the Council’s existing ‘as-is’ platform; thereby minimising re-implementation costs, particularly important given the on-going austerity programme. The level of disruption for the Council that a wholesale re-implementation would involve was also a factor in the decision.

Reasons for Decision

The Council needs to replace the managed service for its SAP system as the current contract is coming to an end.

The evaluation carried out at the end of the procurement, managed under the OJEU process, indicated the preferred bidder recommended in the report.