Summary of Proposed CCN050
Purpose of this Document
As a response to an imperative from Peter Neyroud, Northrop Grumman was
asked in November 2007 to provide a proposal for up to 2,500 Lantern Units
for a 3 year period of performance. This proposal was received in the form of
Change Control Note 050 (“CCN050”) on 12 February 2008.
The purpose of this document is to summarise the terms of CCN050 and to
recommend a way forward for clarification.
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The Covering Letter
The scope of services is for up to 2,500 units for a 3 year period that
would be deployed in England and Wales.
The proposal is valid for 60 days with
and
authorised to negotiate its terms.
It is based on 11 assumptions and conditions.
The recommendation is that these assumptions and conditions are
ratified.
2
Attachment B1 Description
The proposal describes:
• Additional MFRs from SAGEM
• Spares
• Warranty service
• Customised software
• Expansion of central facilities
• Details design, development, integration, implementation and
support
• Additional capacity
• High level architecture
• Approach
• Implementation
• Computer based training
The recommendation is that a far more detailed functional description
is ratified.
3
Attachment B2 Schedule
The schedule states that the units could be deployed to forces in
approximately 12 months.
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Attachment B3 Pricing Model
The description says that the pricing model is divided into fixed and
variable costs.
The fixed costs take into account project activities such as technical
engineering, development and programme as well as non-re-occurring
activates associated with expanded deployment.
The variable costs include the MFRs themselves as well as the
infrastructure for correspondingly higher numbers of searches and
labour for deployment.
The cost per unit on higher numbers is said to be the result of
economies of scale, greater amortisation of fixed costs and discounts
from sub-contractors.
Total Units
500
1000
1500
2000
2500
Service expansion
£926,064
£926,064
£926,064
£926,064
£926,064
MFR Service Increments
£3,984,332
£7,306,585
£10,519,164
£13,442,550
£16,065,471
Variable
£624,678
£694,086
£771,207
£856,896
£952,107
Total cost
£5,535,074
£8,926,735
£12,216,435
£15,225,510
£17,943,642
Service price (3 years)
total cost divided by total
units
£11,070
£8,927
£8,144
£7,613
£7,177
Service price per annum
£3,690
£2,976
£2,715
£2,538
£2,391
Reduction on total cost
for quantity
19%
26%
31%
35%
The recommendation is that far more transparent pricing is obtained and
negotiated. Northrop Grumman must accept that this is the only way
forward if it is to demonstrate that it offers the optimum value for money.
5
Draft Changes to Schedule C: Definitions
Page 14 includes a new definition of “Lantern Service Expansion”.
6
Draft Changes to Schedule E: Pricing
Annex E-14 is added to incorporate the new baseline charges.
The recommendation is that the schedule should reflect more
transparent pricing.
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Draft Changes to Schedule H: Acceptance Procedures
Significant changes are made to Clause 5.4, Deliverable
Documentation, whereby the current clauses would not apply and
would be replaced by an obligation on the Authority to notify Northrop
Grumman if the Documents were not “Fit for Purpose” within 10
Working Days. This follows the precedent set for the Lantern Pilot
Phase 2.
An addition is made to give the Lantern Service Expansion its own set
of Milestones, Acceptance Events and Evidence.
The recommendation is that these are reviewed for
reasonableness.
8
Draft Changes to Schedule O
Appendix O-3 states the Document Deliverables for the Lantern
Service Expansion.
The recommendation is that these are reviewed for
reasonableness.
9
Draft Changes to Schedule S: Software, IPR and Third Party
Contract
Under Clause 4, Contractor Software and Contractor Material after the
Effective Date, these additions are made:
Description
Third Party Software
MFRs, Matcher Software and
SAGEM
Licences
Software
Time sync 2.0
Software
Concord System Agents
The recommendation is that the Authority has visibility of
Northrop Grumman’s contracts with its sub contractors.
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Draft Changes to Schedule V: Authority’s Responsibilities
Clause 5 allocates to the Authority responsibility for all CFE/CFI
requirements including:
• All C&W SRAS deliverables, including approved SRAS software,
• Provision of all C&W Certificate Authority capability for Lantern,
• Liaison with the Police Forces, and
• All Force GPRS hardware and software for GPRS connectivity.
The recommendation is that these are reviewed for
reasonableness.
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