2.21 The Department assessed ICL's offer to be affordable and value for money. Before awarding the contract to ICL, the Department considered the alternatives. It believed that starting the procurement process again was too high a risk as the response to the original procurement had been limited. The Department had no confidence that new bidders would be attracted by a second procurement. On balance, the Department decided that the lowest-risk approach was to award the contract to ICL, particularly as Unisys was taking a risksharing stake in the deal and would be heavily involved in the development of the application. ICL and Unisys both had experience of magistrates' courts as they supplied two of the legacy systems.
11 |
| Comparison between ICL's bids and a public sector comparator | ||||
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| ICL original bid £m | Public sector comparator £m | ICL revised bid £m | Revised public sector comparator £m |
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| Bid | 146 | 174 | 184 | 178 |
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| Project/contract management | 10 | 5 | 9 | 5 |
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| Total costs | 156 | 179 | 193 | 183 |
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| Readily realisable benefit (note 1) | (131) | (142) | (138) | (133) |
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| Risk and residual value (note 2) | 1 | (7) | 1 | (6) |
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| Net cost | 24 | 30 | 56 | 44 |
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| Net Present Value (note 3) | 15.7 | 30.1 | 37.7 | 39.2 |
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| NOTES 1. Readily realisable benefits include savings on existing IT software and hardware support and maintenance; on IT equipment and software; on IT staff; and on the time spent and cost of entering case information and collecting statistical information. 2. Risk is the Department's estimate of the risk of overrun on the project. Residual value is the value of the assets left with the Department after the project has been completed. 3. The net present value of the contract price represents the amount that would have to be invested at the start of the contract to fund the expected cash payments which would need to be made to the contractor. Source: Lord Chancellor's Department | ||||