Oracle - Agreement with Knowsley Metropolitan Borough Council - follow up to f2016.09.2696

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Dear Knowsley Metropolitan Borough Council,

Thank you for your response to f2016.09.2696, published on September 26th 2016. Please accept my apologies for my late acknowledgement.
****In view of a new foi, reference F2016.09.2748 being opened in relation to my queries to I have submitted my queries on a separate document to allow for ease of reading. I trust you will ensure the number F2016.09.2748 will be allocated to this request.****
However, based on your answers I wish to clarify a couple of points. I have reproduced your responses and placed my questions below to make the process easier.
· When was Oracle™ implemented by KMBC? 1996
· What organisation is contracted to provide Oracle™ services to
KMBC? Oracle DBA support (for Oracle Financials but also other council
Oracle database applications) is part of a larger managed service, which
also covers hardware leasing, management and operating system support.
Application support (access to upgrades, patches and technical support) is
included in the annual renewal of technical support services with Oracle
Corporation.
Was a cost analysis and business case presented in relation to lease versus buy options for hardware leasing?
· How was the contract advertised? Procurement of the managed
service was conducted using Further Competition using Crown Commercial
Service framework RM 1054 Technology Products Lot 1, so was advertised to
all eligible suppliers on that framework.
How many vendors are on Service Framework RM1054?
How many vendors responded to the advertisement?
How many vendors were shortlisted to provide a presentation , as to their capability to perform services for KMBC?
How many KMBC employees made up the project team?
Was a procurement professional the lead on the project team?
· What was the evaluation process, including weightings? The
Further Competition was evaluated in line with the requirements of the
RM1054 framework.
Are the weightings available for public viewing?
· What is the annual value, in English pounds, of the Oracle™
contract? The Oracle DBA support is part of a larger ‘platform’ managed
service, which also covers hardware leasing, management and operating
system support and therefore costs cannot be provided exclusively for this
element.
Based on this answer am I to assume that a “lump sum” is paid for services each month and KMBC do not have each element of the contract clearly identified in a payment schedule?
How can VAT be apportioned correctly?
Surely ORACLE has the capability to provide “catalogues” allowing for all contract items to be clearly identified and allow for a full audit trail on costs?
· What is the term, in months, of the Oracle™ contract? The
managed service contract containing the DBA service is for 60 months.
· How many contract reviews are scheduled to be performed per
annum? The managed service contract requires 4 contract reviews per annum
to be scheduled.
· How many contract reviews are actually performed per annum? The
managed service contract delivers 4 contract reviews per annum.
· Does the contract contain a minimum service specification, such
as a Service Level Agreement*? The managed service contract includes an
SLA.
If the contract has a SLA, why aren’t payments released in accordance with the services provided, as opposed to being “lumped together?”
· What is the notice period, for either party, to terminate the
contract? The managed service contract is fixed term for 5 years.
If I am correct you are stating that this contract does not have any clauses allowing either or both parties to repudiate or terminate the contract. Surely that cannot be correct?
By definition, the termination date of the contract would be at the end of the sixty (60) month term. I would expect this to be inserted into a contract, regardless of what the parties to the contract assume.
· When is the Oracle™ contract scheduled to be re-advertised? The
managed service contract is scheduled to be re-advertised in 2019.
When in 2019? There should be a project plan already in place for the procurement, or will this be actioned in 2019?
· How many Oracle™ licences are utilised by KMBC? 120 concurrent
for the Oracle Application Suite modules.
· How many Oracle™ users are registered by KMBC? 1350 named users
of Oracle database / application server.
· What is the annual spend on maintenance** on the Oracle™ system?
Application maintenance is included in the technical support services
annually renewed with Oracle Corporation (last year’s renewal was
£0.031m), DBA support costs are included in a managed service contract and
cannot be separated.
Why can’t costs be separated? Surely KMBC operates a transparent procurement function and as such, each segment of a contract should have a value attributed to it. How else would any person reviewing a contract understand if they are achieving value for their end users.
· What is the projected downtime*** per annum for the Oracle™
system? 0.05%
Has the Oracle system exceeded the downtime projection?
If yes, what liquidated damages are inserted into the contract and available to KMBC to impose on the contractor?
· Under current United Kingdom legislation Value Added Tax
(VAT)**** is set by Her Majesty’s Revenue and Customs (HMRC) and is
generally paid as an additional cost for goods and services that may be
provided from one party to another.
o In view of this:
§ Does KMBC reclaim any VAT from HMRC for services provided under the
Oracle™ contract? Yes
How? If KMBC does not segregate costs, how can KMBC reclaim VAT?
§ If VAT is reclaimed, how does KMBC reinvest the reimbursement? The
Council does not budget for VAT as the amounts reclaimed are cost neutral,
we are merely reclaiming vat expenses already paid.
I am aware that VAT is cost neutral. However, the funds do return, so where do they go, in terms of KMBC funding streams?

Yours faithfully,

Wayne Tully