All reports. 1. Governance Service receive draft report Name of GSO DPR

Transcription

1 DELEGATED POWERS REPORT NO. SUBJECT: Wireless Concession Contract Award Control sheet All of the following actions MUST be completed at each stage of the process and the signed and dated report MUST be passed to the Governance Service for publishing All reports Governance Service receive draft report Name of GSO DPR Date 26/04/ Governance Service cleared draft report as being constitutionally appropriate 3. Finance clearance obtained (report author to complete) Name of GSO Andrew Charlwood Date 29/04/2013 Name of Fin. officer Michael Miller Date 23/04/ Staff and other resources issues clearance obtained (report author to complete) Name of Res. officer Date N/A 5. Strategic Procurement clearance obtained (report author to complete) 6. Legal clearance obtained from (report author to complete) 7. Policy & Partnerships clearance obtained (report author to complete) 8. Equalities & Diversity clearance obtained (report author to complete) 9. The above process has been checked and verified by Director, Head of Service or Deputy 10. Signed & dated report, scanned or hard copy received by Governance Service for publishing 11. Report published by Governance Service to website Name of SPO Kevin Bates Date 24/05/2013 Name of Legal officer Philomena Jemide Date 30/04/2013 Name of P&P officer Andrew Nathan Date 07/05/2013 Name of officer Andrew Nathan Date 07/05/2013 Name Bill Murphy Date 01/05/2013 Name of GSO Andrew Charlwood Date 24/06/2013 Name of GSO Andrew Charlwood Date 28/06/ Head of Service informed report is published Name of GSO Andrew Charlwood Date 28/06/2013 Key decisions only: 13. Expiry of call-in period Date 05/07/ Report circulated for call-in purposes to Business Management OSC members & copied to Cabinet Members & Head of Service Name of GSO 28/06/2013 Date

2 ACTION TAKEN BY CABINET MEMBER (EXECUTIVE FUNCTION) Subject Cabinet Member Wireless Concession Contract Award Cabinet Member for the Environment Date of Decision 21 June 2013 (Published 28 June 2013) Date the decision comes into effect Summary Officer Contributors Status (public or exempt) Wards affected Enclosures Reason for exemption from callin (if appropriate) Key decision 5 July 2013 The Council has been involved in a joint London Boroughs procurement process to award concessions for the provision of an outdoor wireless (WiFi) network within the Borough as well as exclusive permission to use the Council s street furniture, such as lamp columns, for the installation of small cell equipment in support of 4G telecommunications. The conclusion of a competitive dialogue process has resulted in the selection of Arqiva as the Council s preferred bidder as it is the most economically advantageous tender. This report provides authorisation to Award and Accept a Wireless Concession Contract with Arqiva. Adam Driscoll, Infrastructure Planning and Delivery Manager Public with exempt part All None N/A Yes Contact for further information: Adam Driscoll, Infrastructure Planning and Delivery Manager, , adam.driscoll@barnet.gov.uk Serial No. 2027

3

4 1. RELEVANT PREVIOUS DECISIONS 1.1 Cabinet Resources Committee 7 th November 2012, Decision Item 6 resolved amongst others that: Authorisation is given to participate in the London-wide procurement process to let a wireless concession contract for constrained use of Council facilities and/or street furniture for the installation of appropriate wireless equipment to provide Wifi and potentially 4G services within the borough Provided the contract award is for a period of no longer than 10 years and is to be granted to the tenderer who submits the most economically advantageous tender, the Cabinet Member for Environment be authorised to Accept the contract on behalf of the Council. 1.2 Cabinet 3 April 2006 Decision 15 (Street Lighting Private Finance Initiative) approved the completion of an agreement to secure long term investment and management of all street lighting equipment within the Borough through a PFI contract. This means any future decisions or changes to the use of the equipment must be with the agreement or authorisation of the PFI provider. 2. CORPORATE PRIORITIES AND POLICY CONSIDERATIONS 2.1 The Wireless Concession will help support families and individuals through the provision of universal 30 minutes free daily WiFi access as well as the white listing of key public services from an outdoor network operating in various parts of the borough, supporting people when they are out and about. Furthermore the guaranteed income secured can be used to support delivery of digital inclusion measures within Barnet. 2.2 The Wireless Concession will also improve the satisfaction of residents and businesses with the London Borough of Barnet as a place to live work and study because it will improve the capacity of telecommunications signals and deliver outdoor WiFi connectivity in key borough locations. Further it will enable improved ability for existing face-to-face and telephone interactions with the Council to shift to web interactions. 2.3 The Wireless Concession will lastly support the objective to promote responsible growth, development and success across the borough by providing additional means and mechanisms for businesses and residents to interact with one another, as well as providing a new income stream to the Council and the ability to reduce costs.

5 3. RISK MANAGEMENT ISSUES 3.1 The risks of choosing not awarding the contract to the preferred bidder is that the opportunity to drive economic growth now through developing new forms of local wireless services is lost in favour of a more ad hoc, slower and less equitable licensing process; as well as losing the opportunity to secure a guaranteed ten year income stream. 3.2 Risks related to participating in the project have been managed effectively through the competitive dialogue process, but those requiring ongoing risk management are detailed below: Risk Detail Risk Management Contracting risk (i) from Street Lighting Contract: The Street Lighting PFI Contract transferred all risk, under licence, to the PFI Service Provider and therefore there is a contractual requirement for all attachments to the borough s street lighting assets to be approved by the PFI Service Provider. No approval is required if the installation is carried out by the PFI Service Provider. The preferred bidder is proposing to utilise this approach wherever possible. Contracting risk (ii) from Street Lighting Contract Contracting risk (iii) from Street Lighting Contract Indemnity from the preferred contractor against interference with the wireless operation of the CMS equipment the Borough provides under the PFI Contract. Frequency cross-over poses an interference risk to one or both systems which is likely to incur a fee from the PFI Service Provider for inspecting the WiFi attachment installations on completion. Liability for consequential costs of repair/replacement of WiFi equipment must be retained by the WiFi equipment owner, e.g. in the event of vehicular damage to the street light asset without an identified liable party with whom to make an insurance claim. Bidder has committed to ensuring there is no frequency crossover, and has significant experience of providing frequency management including for the London 2012 Olympic Games. Bidder has committed to meeting all consequential costs.

6 Risk Detail Risk Management Contracting risk (iv) from Street Lighting Contract Energy for the Borough s street lighting assets is managed through the PFI Contract. Therefore energy supply and consumption for the WiFi assets must be accounted for separately from the street lighting assets and will need agreement. Bidder has committed to making an annual payment plus administrative costs equivalent to the average cost of energy from each asset. Financial risk from not achieving the key benefits Reputational and equity risk from not achieving borough wide coverage Reputational risk of a public perception of the network as free WiFi. Full engagement in a borough specific session during the competitive dialogue process will enable the Council s key objectives to be set down as contract requirements. It is quite likely that the contract will not achieve 100% borough-wide coverage. As a concession contract, delivery of the network entirely depends on market conditions and providers are likely to focus on areas of high footfall and commercial user demand. It will therefore be necessary to manage public expectation as the network may be informally recognised as the council s WiFi network. The contract is only likely to guarantee a minimum level of free WiFi access, so it will be important to manage public expectations from outset. Most economically advantageous tender was selected and this has delivered on all requirements. This risk was treated and will continue to be treated very seriously to ensure that network branding and public information focuses on ensuring the resulting product is meaningful to residents and local businesses and is seen as a positive benefit to the local area. To require a bidder to offer more than a de minimis level of free internet access could be deemed a notifiable State Aid matter under EU procurement rules. This is because it could be viewed as undermining the ability for fixed broadband and indoor WiFi provision to operate in competition.

7 Risk Detail Risk Management Legislative and financial risk from nonremoval of equipment at end of the contract period The contract requires the bidder to remove all assets installed at the end of the concession period, or transfer them to the Local Authority s ownership. The contractor could potentially be able to claim rights under the Telecommunications Act 1984 (the Code), so that at the end of the contract the Council would need a court order to enforce the removal of equipment. Legal advice has been sought by LB Camden and the relevant provisions will be incorporated into the main contract. There could also be financial reparation costs for damage caused to street lighting assets by extended installation and/or poor removal techniques if they damaged the assets or their protective coating. The PFI Service Provider is likely to require the contract to include a fee for inspecting all affected assets. This cannot completely prevent any issue arising as Counsel Opinion has confirmed we cannot contract out of some provisions within the Telecommunications Act, and therefore issues with the existing PFI contract could arise and will need to be appropriately managed. Reputational and legislative risk if young people are not safeguarded through use of the network The Council will need to be seen to make every effort to ensure that the network is safe. It must be set up with adequate protections to avoid minors from accessing or receiving inappropriate material or social contact via the Council s wireless network. This risk will be mitigated through discussions during the competitive dialogue process and ensuring the resulting contract provides appropriate safeguards. The preferred bidder has confirmed compliance with all codes of practice and furthermore they will allow the Council to define restrictions it wishes to see applied to the borough s own SSID.

8 Risk Detail Risk Management Reputational risk if delays to contract commencement due to planning concerns The equipment is unlikely to be considered de minimis and will therefore require separate planning permission. To minimise the risk of this approval process delaying matters, a suitable procedure will be developed to ensure the design of the equipment provides suitable options for both residential and conservation areas. Engagement between Planning Officers and the preferred bidder will begin upon contract award. The design of equipment is proposed to minimise visual intrusion, including provision of solutions for managing the visual impact in conservation and other sensitive character areas. 4. EQUALITIES AND DIVERSITY ISSUES 4.1 Digital Exclusion is both a cause and a symptom of social exclusion and approximately 15% of the Country, circa 6 million people, are identified as both socially and digitally excluded 1. Individuals and communities can quickly be left behind if they do not have the means to access the shared digital spaces upon which our lives are increasingly dependent for employment, social networking, entertainment, information and accessing public services. 4.2 Providing an alternative to 3G networks will be a step towards digital inclusion including a small amount of free usage that should enable financially excluded people to get online outside of a public library without access to a credit or debit card. Secondly income from the concession could be utilised to widen the commercially viable network to deliver broader outdoor coverage if this was required to enable other areas to also have a WiFi network. 4.3 This concession contract allows the Council to shape this new market as it comes forwards to ensure this opportunity to access wireless services comes to less commercially viable areas in parallel with the deployment of WiFi equipment to the most commercially beneficial areas. If the Council does not open up its street furniture to support wireless access then ad hoc commercial services will end up coming forwards more slowly and only in the most viable areas. 4.4 Corporate equalities policies were assessed at the Pre Qualification Stage by the Wireless Concession Project Board (which included Barnet). The six companies selected to pass through to the dialogue stage and final tender have therefore all demonstrated an ability to comply with public sector equality duty as set out in the Act. 1 Digital Inclusion: An Action Plan for Consultation, 2008

9 4.5 The opportunities for digital inclusion have been explored during the dialogue process and will continue through the implementation stages. The allowance of three white-listed websites will enable the Council to provide permanent access to some public websites. 4.6 The bids were scored on the basis of 60% price and 40% quality, with two components of the quality assessment being (a) coverage and (b) customer access, digital & social inclusion. 5. USE OF RESOURCES IMPLICATIONS (Finance, Procurement, Performance & Value for Money, Staffing, IT, Property, Sustainability) 5.1 Approval of the award of contract will formally close the dialogue and tendering process, enabling the Council to move onto implementation discussions with the preferred bidder. 6.2 The dialogue element of the procurement process has utilised just over half of the a 60,000 allowance from contingency (non-recurring) funds set aside for the concession and due to be repaid from the concession fee and guaranteed income linked to this concession. 6.3 Actual income that will accrue from the contract is set out in the exempt report and will depend on the overall profitability from the network once in operation as it is based on a combination of concession fee, guaranteed income and profit share. There will be no cost to the Council in the provision of this service, with all costs in relation to the service funded by the operator as part of their concession. 6.4 The implementation of this contract will incorporate staff support from a number of Council Service Delivery Units from DRS planning, street scene PFI lighting team, NSCSO - finance, procurement and property services, HB Public Law - legal services, Adult Social Care and the Children s Service. For all these services this will be through usual application / casework processes, except in relation to discussing and identifying ways to maximise delivery of digital inclusion. 6. LEGAL ISSUES 6.1 As the contract is to be let as a services concession contract, the procurement is exempt from the Public Contracts Regulations 2006 as per regulation 6(2) (m). However it is subject to Treaty principles of transparency, fairness and non-discrimination and therefore the procurement process followed normal public contracts practice with an OJEU advert, followed by a pre-qualification questionnaire, and then the formal tender process.

10 6.2 The Electronic Communications Code (the Code) is set out at Schedule 2 to the Telecommunications Act 1984 (as amended by, inter alia, the Communications Act 2003). Article 2 of the Code allows an electronic communications operators designated by Ofcom under section 106 of the Communications Act 2003 to enter into agreements with landowners to, inter alia, keep electronic communications apparatus installed on, over or under that land. Article 5 of the Code allows a designated operator who has failed to agree such installation with a landowner to apply to court for an order requiring the landowner to permit such installation. On that basis, it is possible that any exclusivity obligation that the Council undertake in respect of the affixing of WiFi equipment to public assets by Concessionaires may be undermined by a contrary order of the court under Article 5 of the code. The advice form Counsel is that any exclusivity granted under the proposed Contract be expressly subject to contrary legislation or court order. 6.3 Operation of the contract is subject to the contract which the Council already has with its PFI Street Lighting partner, and the contract has therefore been drafted to fully address the interrelationship. 7. CONSTITUTIONAL POWERS 7.1 On 12 November 2012, the Cabinet Resources Committee delegated responsibility for acceptance of the contract to the Cabinet Member for the Environment. 7.2 Council Constitution Part 3 Responsibility for Functions sets out powers delegated to the Cabinet Member for the Environment. This includes all matters relating to the development and management of the environment, including: the street scene including pavements and all classes of roads; parks and open spaces. 7.3 Council Constitution, Part 3, Responsibility for Functions, Section 4.3 provides that Cabinet Members are authorised to accept tenders or quotations in accordance with the Contract Procedure Rules. 7.4 Council Constitution, Contract Procedure Rules, Appendix 1 Table A Authorisation and Acceptance Threshold provides for Cabinet Member acceptance of contract value of 500,000 and above. 8. BACKGROUND INFORMATION 8.1 The opportunity for letting of a WiFi concession contract arose through the Society of London Treasurers ICT Project Board that set up five key projects to support improved services and council income. The London Borough of Camden has led on the procurement process; with twelve

11 other Councils alongside Barnet, including the neighbouring boroughs of Brent and Haringey, each separately providing a wireless network concession under separate lots within the overall joint procurement process. 8.2 The preferred bidder will deliver and maintain a commercial wireless network in areas of high footfall (town centres, transport nodes and stadia) operating a wholesale model but including a publicly accessible WiFi network for all users with a simple login process and daily access charges outside of an initial free period of 30 minutes. In the coming years they will also install 4G small cells on behalf of telecoms providers to address capacity problems in mobile network coverage maps, and as an alternative to installation of additional 4G mobile phone masts around the borough. 8.3 Delivery of a borough-wide WiFi network offers the possibility to increase channel shift of customers to online services and also to develop a parallel secure network for staff to use wherever they are within the borough. For example customer / defect information could be directly recorded and staff could access their own s without incurring a 3G data cost. 8.4 The contract term will be 10 years, which is the most suitable approach for securing the best price as technology will develop and the value per MB of data will go down, but we are still guaranteed a minimum sum within an overall envelope of 20% of the profits accrued. 8.5 The preferred bidder has committed to be responsible for all costs and work in relation to installation, operation and maintenance of the wireless network, owning all risks and responsibilities of operating the variety of services that could be delivered through this technology including 3G data traffic offload, 4G traffic, and smart metering. 8.6 The Telecommunications Act 1984 provides a requirement that removal of equipment be notified and agreed with telecoms providers, which is a risk that Barnet cannot transfer as its street lighting that is intended to be used for the WiFi equipment and small cell equipment is already under a PFI contract that gives the operator significant freedoms over maintenance and operation of the columns without the requirement for notice. 8.7 Potential conflicts with the Apparatus Licence transferred to the PFI Service Provider under the Street Lighting PFI Contract have been fully explored and measures are in place to enable contract award, although a small measure of risk cannot be contracted out through the process, relating to the Telecommunications Act This risk is being mitigated in three ways: i) Provisions within the contract to manage the relationship between the preferred bidder, PFI contractor and the Council.

12 ii) The proposed use of the PFI contractor for installation of the WiFi and small cell equipment. iii) The requirement that at the end of the contract all equipment is either removed by the contractor, or in default transferred to the ownership of the Council. 8.7 The procurement process was focused on the most economically advantageous tender, based on a 60:40 ratio of price to quality; the preferred bidder scored highest on both price and quality, meaning that the Council has confidence in the effective delivery of the proposed benefits of the concession detailed in the exempt report. 8.8 Income received from the concession is anticipated to be used to support the Council s capital strategy in order to link the income from letting Council assets to related priorities for investment including digital inclusion, business engagement, town centre improvements and support for the street lighting contract. 9. LIST OF BACKGROUND PAPERS 9.1 None 10. DECISION OF THE CABINET MEMBER I authorise the following action: 10.1 The award of contract for Lot 4 (Barnet) of the Wireless Concession joint London Borough procurement to Arqiva Support and engagement throughout the lifetime of the contract in maximising the benefits arising from the concession including through delivery of increased coverage, digital inclusion measures, and provision of support for local businesses with digital engagement. Signed Councillor Dean Cohen Date 21 June 2013 Cabinet Member for Environment