Purpose

The current contract with NEC (previously Northgate) for a Revenues and Benefits hosted solution which commenced in June 2021 for a term of 5 years (with +1 +1 extension option) is coming to the end of the initial term and a maximum approved contract value of £1,350,000. 

The current 5-year contract expires on 31 May 2026. The total extension value is £389,768, this brings the aggregate value to £1,231,238 within the approved maximum value.

Decision

1. 1.1          Approve an extension by way of variation for 2 years for the contract with NEC Software Solutions (formerly Northgate Public Services) for the provision of the hosted Revenues and Benefits IT solution.
2. 1.2          Note that the extension of the contract for a period of 2 years will run from 1 June 2026 to 31 May 2028.
3. 1.3          Approve the total value of the extension of £389,768 (excluding VAT), noting the total estimated contract value of £1,282,683 (excluding VAT) over the full term.

Reasons for the decision

Extend current contract for 2 years to continue to utilise the Northgate Revenues and Benefits hosted IT solution to: -

·       Provide the continued delivery of a statutory service

·       Enable the Council’s income collection through Council Tax and NNDR

·       Avoid a range of capital costs – procurement, implementation/migration and training

·       Avoid the risk of degraded income collection associated with system change or the resource costs of mitigating such losses

·       The terms of the contract enable a 12-month extension and then a further 12-month extension after the first. If we take this option, then there would not be suitable time to reprocure within the first 12 months, and another decision would need to be made with the same outcome. The total 24 months that is proposed in this decision enables the service to run a proper and full procurement.

The Council will have achieved contract savings of £323,890 over the 7-year term which equates to a 19% reduction as there has been no annual indexation for the first five years. Deliver 2 years savings of £113,710 (current 5-year contract savings achieved of £210,180 – total savings with extension £323,890)

Alternative options considered

Re-procurement through open tenders or frameworks has been considered, however, time limits this as an option with a rapidly approaching end of contract deadline even if an alternative supplier were to be selected there would be insufficient time to migrate the service to the new supplier.

However, given the success of delivery, risk of migration and cost of training it wouldn’t be recommended to migrate to another supplier at this time.

There would be large impacts to wider services, including Electoral, various Housing Teams, Recovery functions such as Enforcement Agent parters, integrations to the document management system, Office for National Statistic, Department for Works and Pensions. Migration to another solution, if proven to be cost effective, would take a considerable amount of time – more than is available now to consider an alternative provided.

Even providing there was more time to facilitate a migration to the hidden cost impacts for failing to deliver any one of service delivery items can have significant financial costs, or penalties. This is a significant risk that would have to be carefully considered.