/ Schools Forum / Item 7 /
/ 14 October 2010 /
/ Schools Internet Services – Migration to the Hampshire Public Services Network - 2 (HPSN2) /
/ Report of the Director of Children’s Services /
Contact: Daniel Fearnley, 01962 846359,
7
1 Summary
1.1 The HPSN2 framework contract was awarded to Virgin Media Business (VMB) Ltd (formerly NTL:Telewest Business Ltd) in July 2009 for provision of HPSN2 Services to 16 Hampshire and Isle of Wight partner organisations, with Hampshire County Council as lead authority.
1.2 The order submitted for the capacity of HPSN2 core network was placed based on the network capacity needed to support corporate and schools sites. The views of Hampshire Schools were represented during the procurement.
1.3 Hampshire Schools currently have a contract with Synetrix to provide the Schools Wide Area Network (SWAN) service. The Synetrix SWAN contract is due to expire on 31 August 2012. Legal advice has confirmed that it is not possible to extend the existing Synetrix contract due to procurement regulations, so all Schools need to be on a replacement WAN service by 1st September 2012.
1.4 The purpose of this paper is to confirm to schools that, following a recent review of the business case, the tender undertaken in 2009 for HPSN2 remains the recommended option in terms of affordability, best value and level of risk.
1.5 A decision to progress is required by Schools Forum to ensure there is sufficient time to allow all schools to be migrated off SWAN by August 2012.
1.6 The paper also sets out the financial viability and risks in relation to the number of schools joining HPSN2 and the contract term.
1.7 The preferred option is that all schools join HPSN2 for a period of 5 years. There is, however, a funding gap that needs to be closed. The broad approach to closing that gap is identified.
1.8 In order to achieve the above an order will need to be placed with VMB by the end of October 2010.
2 Introduction
Schools Wide Area Network (SWAN)
2.1 Hampshire Schools currently have a contract with Synetrix to provide the Schools Wide Area Network (SWAN) service. SWAN provides an effective and stable broadband service to Schools. The current SWAN infrastructure does not meet their growing broadband needs and a number of Schools are at network capacity. The Synetrix SWAN contract is due to expire on 31 August 2012 . Legal advice has confirmed that it is not possible to extend the existing Synetrix contract due to procurement regulations, so all Schools need to be on a replacement WAN service by 1st September 2012.
2.2 Each School currently pays an annual fee for their SWAN service based on the number of pupils as presented in the “Broadband Charges for Schools 2010/2011” report (Item 8b) that was approved by Schools Forum at its meeting on 11 December 2009.
Hampshire Public Services Network 2 (HPSN2)
2.3 The HPSN2 framework contract was awarded to Virgin Media Business Ltd (formerly NTL:Telewest Business Ltd) in July 2009 for provision of HPSN2 Services to 16 Hampshire and Isle of Wight (HIOW) partner organisations, with Hampshire County Council as lead authority.
2.4 The scope of this framework contract includes HPSN2 data, voice, internet and content filtering services. This was a significant procurement exercise lasting 18 months and the evaluation teams included staff with the relevant expertise (IT, Finance, Procurement, Legal) from Hampshire County Council and representation from external partners.
2.5 The basic HPSN2 data service is a managed data network over a high bandwidth wide area network that securely links HIOW organisations and their schools, if required. Access to the Internet is part of this basic service. The following additional services can be delivered within the HPSN2 agreement – Web filtering, Telephony, Instant text messaging, Video conferencing, CCTV and Wi-Fi services
2.6 The rollout of the HPSN2 data service to over 200 central Hampshire County Council sites is in progress and will complete in October 2010. HPSN2 has proved very stable. No support calls have been logged for the service for any sites since they migrated to HPSN2. 10 external partner organisations are proceeding with their HPSN2 orders and two partners have expressed interest in placing orders for their Schools (Isle of Wight and Southampton).
2.7 The strategy for HPSN2 is that as more sites take up the service the costs of the HPSN2 core are subsequently shared over a larger number of customers and the service becomes cheaper for all.
2.8 The order submitted for the capacity of HPSN2 core network was placed based on the network capacity needed to support corporate and schools sites. The financial cost model for HPSN2 assumed that all HCC corporate and schools sites would implement the basic HPSN2 data service as a minimum. If Schools do not proceed with HPSN2 service, there will be an impact on the costs of HPSN2 to other Hampshire County Council (HCC) sites and external partner organisations.
3 Aims and objectives
3.1 The aim is to provide Schools with enhanced Wide Area Network (WAN) services at the same or lower costs as their current service before the existing SWAN contract expires, and to allow schools access to a broadband service that is secure, resilient and flexible, offering cost effective additional services and technologies in the future.
3.2 In order to achieve this the following objectives must be met:
· Double the network bandwidth at each school to allow for current capacity issues and future growth, as follows :
o Primary Schools from 2Mb to 4Mb, and from 4Mb to 8Mb, with potential for 10Mb
o Secondary Schools from 20Mb to 40Mb with potential for 100Mb
· To ensure that all schools have continuity of network service beyond the end of the SWAN contract on 31 August 2012.
· To ensure that schools are able to access a resilient and secure Internet service in the most cost effective way.
· To ensure that schools can access a cost effective flexible content filtering solution.
· To allow schools to be on a platform where they can benefit from future savings in the areas of Voice, call charges and Mobile services.
· To allow schools to have the network bandwidth and reliability to benefit from future services and applications provided centrally by HCC (e.g. Centrally Hosted SIMS).
· To provide a common infrastructure for shared services and applications, better ”school to school” access and improved inter-agency access.
· To bring Schools onto the chosen HCC Corporate WAN platform to benefit from the economies of scale that the HCC and partners can bring, for current and future services.
4 Options – summary
4.1 In a recent review of the business case, the following options were evaluated against the aims and objectives.
Option 1 – Migrate to HPSN2
4.2 This option is to migrate all Schools from the existing SWAN service onto the HPSN2 data service under the HPSN2 framework contract with Virgin Media Business (VMB). This will follow a staggered rollout. This option has been fully evaluated and the costs associated with this are understood in detail.
.Option 2 – Procure a schools only service
4.3 This option is to start a new procurement for a Schools only network service. This option includes procurement and project activities, and has been fully evaluated.
Option 3 - Do Nothing
4.4 This option is to remain on the existing SWAN service with network capacity and bandwidth as currently provided. The existing SWAN infrastructure does not meet the growing bandwidth requirements of Schools, and as described above, the existing Synetrix contract ends in August 2012 and cannot be extended. This option has therefore been discounted and has not been evaluated in detail.
Option 4 - Extend SWAN contract via a single tender request
4.5 This option is to extend the existing SWAN service via a single tender request. The value of the existing SWAN contract means that it is not a candidate for extension via a Single Tender Request. This option has therefore been discounted and has not been evaluated in detail.
Option 5 – Individual School Procurement
4.6 This option is for each school to procure their individual broadband service. This option would be more expensive for each school, and especially for smaller schools and those in rural areas and would not allow for a uniform robust network to be in place as is needed. This option has therefore been discounted. However, this issue will be addressed on a high level with schools at regional communication Roadshows and in more detail with those schools who feel that they wish to explore this issue further.
Option 6 – Partner with other authorities
4.7 This option is to partner with other authorities such as Kent, Surrey or Dorset county councils. This would take a significant amount of time and would put at risk all Schools being on a replacement WAN service by August 2012. This option has therefore been discounted and not evaluated in detail.
5 Preferred option
5.1 Options 1 and 2 have been evaluated against the following criteria:
Financial
5.2 The key decision when evaluating the two options is which one will provide the lowest cost over the period of the contract. As the same discount scheme has been assumed in both cases, option 1, Migrate to HPSN2, demonstrates the lowest cost.
5.3 Table 1 compares the costs of both options over a 5 year term.
Option 1 / Option 2Costs / Migrate to HPSN2
(VMB) / Procure a Schools only
Service
£’000 / £’000
One-off / 3,998 / 4,655
Ongoing / 18,499 / 22,417
Total / 22,497 / 27,072
5.4 This illustrates that option 1, Migrate to HPSN2, provides the lowest cost to schools over the term of the contract.
Non financial
5.5 Weighted benefit analysis (WBA) has been used to provide an appraisal of the non-financial elements of each of the options. This is to ensure that whilst an option may be more cost effective it may not be meeting the functional needs of schools.
Table 2, Weighted benefit analysis
Evaluation Criteria / Weight / Option 1 / Option 2Migrate to HPSN2 (VMB) / Procure a Schools only Service
Double the network bandwidth at each school to address current capacity issues and future growth / 15% / 5 / 5
Ensure that all schools are off SWAN by August 2012 / 15% / 4 / 3
Availability of HCC resources in the timescales / 15% / 4 / 3
Access to a resilient and secure Internet service / 10% / 5 / 5
Effective access to the corporate Web filtering solution / 10% / 5 / 5
Benefit from HCC future services and applications provided centrally / 10% / 5 / 4
Platform for Future Telephony Services and associated savings / 10% / 4 / 2
Support overall IT corporate strategy for HPSN2 Programme / 5% / 5 / 0
Ongoing Vendor / Contract management / 5% / 4 / 4
Weighted Score (out of 5) / 4.55 / 3.7
Rank / 1st / 2nd
5.6 The WBA demonstrates that option 1, Migrate to HPSN2 provides greater non financial benefits to schools when assessed against the evaluation criteria above.
Risk assessment
5.7 Based on risk assessments Option 1 – Migrate to HPSN2 represents a lower risk than Option 2 – Procure a Schools only service.
Table 3, Risk assessment
Option 1 / Option 2Migrate to HPSN2 (VMB) / Procure a Schools only Service
Risk Scoring / 16 / 25
Rank / 1st / 2nd
Note : Higher Scoring means Higher Risk. Lower Scoring means Lower Risk.
5.8 Key reasons for the higher risk rating for Option 2 are the length of overall project duration of 22 month, such that there is a high risk that schools would not be off SWAN by the end of the August 2012. There is also a high risk in the availability of IT, Procurement and legal resources to support a procurement of this size at this critical time of change.
5.9 The key risk for Option 1 is that VMB costs for Schools have risen since the main offer was made and while there is now more certainty in the figures, annual costs could rise further to the point that the annual costs to schools would increase.
5.10 Option 1, Migrate to HPSN2, is recommended as the preferred option to meet the aims and objects in Section 3 as it scores better than Option 2 when assessed against all chosen criteria.
6 Financial implications
Funding sources
6.1 Schools Forum agreed to a recommendation in December 2009 to use the standards fund, Harnessing Technology, for the period April 2010 to August 2011 as contribution towards the cost of change for HPSN2. Using this and other one off funding provides a total contribution of £3,025,000.
6.2 The annual income from Schools to cover the costs of providing broadband services is £4,008,600. This includes £150,000 which is set aside to cover in year costs of maintaining the service, such as replacing faulty equipment and dealing with unplanned upgrades. The amount of income that can be used to fund the annual cost is therefore £3,858,600, which is the £4,008,600 minus the £150,000.
6.3 It has been assumed for this paper that schools income will be maintained over the three, four or five year period. However, the impact of schools leaving the service has been considered in 6.14.