Agenda item

RESOLVED:

To approve a contract variation, to extend by a maximum period of six (6) months, the current contract for Modern Tools for Housing software development services.

REASONS FOR DECISION & OPTIONS APPRAISAL

The proposed contract variation is essential to enable continued delivery of essential software tools for housing services and ensuring an effective transition to in-house delivery and support.

The cyber-attack of October 2020 has impacted significantly on the Modern Tools for Housing programme because that meant that the previous housing system (Universal Housing) became unavailable and it was therefore no longer possible to deliver a phased migration from the old system to new software. As a result, teams in housing services have been required to use interim solutions to deliver services while new software is delivered.

Following the decision to commission a strategic review of the housing service’s technology needs it was necessary to identify the best value approach for continued delivery of current work in progress while the review takes place and ongoing direction is agreed. Variation of the current contract is recommended on the grounds that:

·  The work required covers critical functionality required by the housing service;

·  The variation includes transition to the in-house ICT team for support and further development of essential functionality pending the completion of the strategic review. No further variation of this contract will be required;

·  Variation of the current contract removes the requirement for transition / handover, so the pace of delivery is uninterrupted while the strategic review is in progress.

Variation of this contract is permitted under Regulation 72 which states:

72(1)(b) for additional works, services or supplies by the original contractor that have become necessary and were not included in the initial procurement, where a change of contractor—

(i) cannot be made for economic or technical reasons such as requirements of interchangeability or interoperability with existing equipment, services or installations procured under the initial procurement, and

(ii) would cause significant inconvenience or substantial duplication of costs for the contracting authority,

provided that any increase in price does not exceed 50% of the value of the original contract

The proposed variation is 50% of the original contract value. Changing contractor is not considered viable for the reasons set out in 5.3 (above). Specifically, a change of contractor would:

·  Delay the delivery of essential functionality required by Housing services, whose legacy system was rendered unavailable by the criminal cyberattack of October 2020;

·  Incur additional costs and significant inconvenience through requiring transition to a new contractor and delaying the transition to the in-house support and development model;

·  Incur duplication of costs through otherwise unnecessary handover prior to the transition to in-house support and development;

·  No further variation will be required once the transition to the in-house model is complete.

The Director of Climate Homes and Economy Finance has confirmed that this additional expenditure can be funded from within their existing budgets and no other additional funding will be required.

ALTERNATIVE OPTIONS (CONSIDERED AND REJECTED)

In October 2022, when the original contract was approaching its end, the option of conducting a new procurement exercise was considered. This was rejected on the grounds that:

·  The strategic review was in progress, so it was not possible to define a clear specification and requirements for a new procurement at that time.

·  Transition to a new provider would have required on boarding and handover that would have delayed delivery of urgently needed requirements.

The option of making a transition to an exclusively in-house model was also considered. This was agreed as the longer term direction pending completion of the strategic review. There were, however, urgent requirements that need to be delivered which exceed the current in-house capacity and transition and handover is also required to ensure a sustainable change in approach.

The ICT team has worked with colleagues in Corporate Procurement and Legal Services to assess the options. As the strategic review was ongoing at that point, and the outcome of that review was expected within a short timescale, it was considered to be prudent to continue with the existing TPXImpact contract under a variation - as set out in this report.

9.1  The Strategic Director, Customers and Workplace introduced the report,

 highlighting the following:

·  A supplementary paper on this matter had been circulated to members of the Committee;

·  The contract variation was to replace the previous outdated software with a transition to in-house support and to enable further delivery for products that had been developed in the context of the strategic review;

9.2  Councillor Kennedy referred to the fact that the funding for the extension

was in the housing capital budget and asked for clarification in relation to the length of the previous contract.

9.3  Councillor Woodley asked for confirmation that the work was now aligned with the strategic review and that there would be no other requests for extensions to the contract. 

9.4   The Strategic Director, Customers and Workplace confirmed that work had been carried out with the Housing Department on this matter with provision made within the Capital Housing budget for the contract extension. Further, there was provision in the current contract for an extension to that contract with a report to the Committee because of the transfer to the in-house team. He confirmed that there would be no further extensions to the contract.

RESOLVED:

To approve a contract variation, to extend by a maximum period of six (6) months, the current contract for Modern Tools for Housing software development services.

REASONS FOR DECISION & OPTIONS APPRAISAL

The proposed contract variation is essential to enable continued delivery of essential software tools for housing services and ensuring an effective transition to in-house delivery and support.

The cyber-attack of October 2020 has impacted significantly on the Modern Tools for Housing programme because that meant that the previous housing system (Universal Housing) became unavailable and it was therefore no longer possible to deliver a phased migration from the old system to new software. As a result, teams in housing services have been required to use interim solutions to deliver services while new software is delivered.

Following the decision to commission a strategic review of the housing service’s technology needs it was necessary to identify the best value approach for continued delivery of current work in progress while the review takes place and ongoing direction is agreed. Variation of the current contract is recommended on the grounds that:

·  The work required covers critical functionality required by the housing service;

·  The variation includes transition to the in-house ICT team for support and further development of essential functionality pending the completion of the strategic review. No further variation of this contract will be required;

·  Variation of the current contract removes the requirement for transition / handover, so the pace of delivery is uninterrupted while the strategic review is in progress.

Variation of this contract is permitted under Regulation 72 which states:

72(1)(b) for additional works, services or supplies by the original contractor that have become necessary and were not included in the initial procurement, where a change of contractor—

(i) cannot be made for economic or technical reasons such as requirements of interchangeability or interoperability with existing equipment, services or installations procured under the initial procurement, and

(ii) would cause significant inconvenience or substantial duplication of costs for the contracting authority,

provided that any increase in price does not exceed 50% of the value of the original contract

The proposed variation is 50% of the original contract value. Changing contractor is not considered viable for the reasons set out in 5.3 (above). Specifically, a change of contractor would:

·  Delay the delivery of essential functionality required by Housing services, whose legacy system was rendered unavailable by the criminal cyberattack of October 2020;

·  Incur additional costs and significant inconvenience through requiring transition to a new contractor and delaying the transition to the in-house support and development model;

·  Incur duplication of costs through otherwise unnecessary handover prior to the transition to in-house support and development;

·  No further variation will be required once the transition to the in-house model is complete.

The Director of Climate Homes and Economy Finance has confirmed that this additional expenditure can be funded from within their existing budgets and no other additional funding will be required.

ALTERNATIVE OPTIONS (CONSIDERED AND REJECTED)

In October 2022, when the original contract was approaching its end, the option of conducting a new procurement exercise was considered. This was rejected on the grounds that:

·  The strategic review was in progress, so it was not possible to define a clear specification and requirements for a new procurement at that time.

·  Transition to a new provider would have required on boarding and handover that would have delayed delivery of urgently needed requirements.

The option of making a transition to an exclusively in-house model was also considered. This was agreed as the longer term direction pending completion of the strategic review. There were, however, urgent requirements that need to be delivered which exceed the current in-house capacity and transition and handover is also required to ensure a sustainable change in approach.

The ICT team has worked with colleagues in Corporate Procurement and Legal Services to assess the options. As the strategic review was ongoing at that point, and the outcome of that review was expected within a short timescale, it was considered to be prudent to continue with the existing TPXImpact contract under a variation - as set out in this report.