Cover Letter

September 2011

To Whom It May Concern:

Managed ICT Services Model Agreement - for consideration by Local Authorities when contracting for Managed ICT Services.

Please find at the end of this letter web links to the final version of the Managed ICT Services Model Agreement (MISMA) - for consideration by Local Authorities when contracting for Managed ICT Services. The MISMA is a simplified and shortened form of the pre-existing ICT Services Model Agreement (hereafter referred to as the "Model Agreement") and is intended for use in 2nd/3rd generation outsourcing. We have also developed a document setting out Instructions for Effective and Optimum Use of the MISMA which is also accessible via the web link below.

The MISMA represents consideration of responses from consultees and engagement with the Local and Central Government officers. The development of the MISMA has also been carried out following discussions between Local Partnerships, Cabinet Office and Infrastructure UK. The MISMA has also, where appropriate, drawn from drafting contained in other sector standard forms.

We would like to specifically draw your attention to the following:

1  The target application for the MISMA is a 2nd/3rd generation outsourcing arrangement for Managed ICT Services involving only modest levels of transformation risk. This is a significantly different application to that for the Model Agreement.

2  The development of the MISMA should continue using the approach of maintaining maximum possible alignment with the extant version of the Model Agreement. The MISMA contains the fewest possible optional clauses to counter the possibility of square brackets being removed arbitrarily, leading to the inclusion of inappropriate clauses in the MISMA in practice.

3  The Schedules are only defined to a level sufficient to ensure consistent and correct content. A number of respondents assumed that the content of Schedules (value for money, for example) will be the same as for the Model Agreement. This is not the case. A revised Schedule structure is provided to illustrate the high level content.

4  The operating environment could be a significant due diligence issue in some cases. The baseline assumption will remain that this is not the case but we will provide instructions for projects where it is (allowing the re-introduction of all Model Agreement clauses and, in extremis, use of price varying mechanisms).

5  There may be projects where the added complexity of multiple heads of liability would be desirable in the Limits on Liability provisions. The baseline case will remain a single limit but we will provide instructions for projects where a more complex approach is justified.

6  The Step-in provisions have been removed from the baseline drafting. Supporting documentation will identify situations where re-inclusion might be considered and will suggest that the triggers for Step-in be limited to mitigation of a Health & Safety risk or the need to discharge a statutory duty.

7  We have withdrawn delay payments from the baseline position. We have included within the instructions, the possibility for reinstating it where for example service charges reduce after transformation and/or transformation delivers significant quantifiable financial benefit.

8  The MISMA needed to be able to reflect the need for testing to occur at the end of transition prior to the new contractor assuming full responsibility for the delivery of legacy services. We have provided instruction on the design of the testing regime and the consequences of failure. In terms of drafting, we have used same planning and testing provisions for both transition and transformation phases.

9  It has been recognised that there is the potential for confusion in respect of the MISMA and extant guidance for the original Model Agreement. This is now addressed in the supporting documentation.

The documents can be accessed by registering for free and automatic access to the Local Partnerships Procurement Pack Portal at the following web link:

http://www.affinitext.com/lppp/

We will continue to engage with projects and the market generally and as necessary update the Contract to reflect market wide issues.

If you have any queries in relation to the MISMA please email LPenquiries@local.gov.uk.

Yours sincerely

Amar Qureshi
Corporate Director
Local Partnerships

Local Partnerships

Local Government House l Smith Square l London SW1P 3HZ
Tel: 020 7296 6777
www.localpartnerships.org.uk

Local Partnerships LLP is a limited liability partnership registered in England and Wales with registered number OC346845 at Local Government House, Smith Square, London, SW1P 3HZ