2.8 During 1994 and 1995, the project team held a series of informal briefings with various radio communications companies. These companies researched the technical feasibility of various options for PITO. Radiant, a firm with telecommunications expertise, consulted with the telecommunications industry and concluded in its report that a national procurement was favoured. Indeed, O2 indicated that it would only participate on such a basis. In view of the complexity of the project, the industry also supported the need for bidders to prepare project definition studies in which they would produce detailed designs of their proposed networks.
2.9 PITO received 70 responses to a Prior Information Notice published in the Official Journal of the European Communities in July 1995. Three potential bidding consortia were formed (see Figure 9) after the publication of the project advertisement in January 1996. At this point, conditions were set for a fully competitive procurement.
|
7 |
|
Advisers' costs incurred from 1997 |
This figure shows that, from 1997, PITO spent £1.9 million on external advice.
|
|
£000s |
|
Project management |
337 |
|
Procurement and technica |
201 |
|
Technical (Mason Communications) |
409 |
|
Legal (Dibb Lupton Broomhead/Shaw Pittman) |
619 |
|
Financial (Charterhouse) |
185 |
|
Others |
160 |
|
Total |
1,911 |
|
Source: PITO |
|
|
8 |
|
Key Advisers |
|
Type of Adviser |
Name of Firm |
Notes |
|
Technical |
Mason Communications |
Appointed in 1995. Provided technical expertise to supplement that available from the Home Office's Radio Frequency and Communications Planning Unit. Provided information used in the financial models and constructed the public sector comparator. |
|
Legal |
Dibb Lupton Broomhead/ Shaw Pittman |
DLB was appointed in 1996. However, when a key partner moved to Shaw Pittman PITO elected to retain his services. PITO not only eliminated a potential risk of delay by securing continuity of advice, but also negotiated a lower fee rate from Shaw Pittman. The division of work between the two law firms was distinct enough to avoid expensive duplication of effort. |
|
Financial |
Charterhouse |
Appointed in 1995. Key tasks included checking financial models, assessing the reasonableness of O2's bid and ascertaining the overall value for money of the project. |
|
Source: NAO |
|
|
|
9 |
|
Consortia formed to bid for Airwave |
Consortia | Lead company | Tetra equipment developer | Other primary members |
Consortium 1 | Motorola Limited1 Nokia Telecommunications Limited1 | TRW Integrated Engineering Division | |
Consortium 2 | Racal Network Services Limited | Ericsson Limited2 | Fluor Daniel Limited |
Consortium 3 | NTL | Philips Communication Systems | ICL |
NOTES
1. After being awarded the Airwave contract, O2 appointed Motorola Limited as the sole infrastructure provider.
2. Ericsson Limited withdrew from the TETRA market in 1996.
3. Bosch Telecom withdrew from the TETRA market in 1996.
|
Source: PITO/NAO |