ESA Information Systems Department Directorate of Operations ESA’s Information Systems Infrastructure and User Support Services Tender - Information Session

ESA Information Systems DepartmentDirectorate of Operations

ESA’sInformation Systems Infrastructure and

User Support Services Tender-

Information Session for IT Outsourcing Industry

30th June 2005 ESA ESRIN

Conference Room Magellan


Tendering Rules and Tendering Rules and Principles

Tender Process:Tender Process: ScheduleSchedule Milestones Milestones Interaction PointsInteraction Points

Communications with ESACommunications with ESA

How to do business with ESAHow to do business with ESA

Sergio Benetti - Contracts Officer


ESA Outsourcing Information Session 30.06.2005

ESA tendering principlesESA tendering principles

Two of the principal provisions of the ESA's Council Contracts Regulations Two of the principal provisions of the ESA's Council Contracts Regulations establishing the basic rules read as follows:establishing the basic rules read as follows:

ARTICLE 4ARTICLE 4 establishes that establishes that ‘Provisions in these Regulations and in any other ‘Provisions in these Regulations and in any other instructions concerning the placing of contracts shall always be interpreted so instructions concerning the placing of contracts shall always be interpreted so as to ensure the most economic and effective employment of the Agency’s as to ensure the most economic and effective employment of the Agency’s resources,'resources,'

ARTICLE 5ARTICLE 5 (Chapter II) establishes that: (Chapter II) establishes that: 'Open competitive tender shall be the 'Open competitive tender shall be the normal procedure for the placing of contracts', normal procedure for the placing of contracts',



Selection ProcessSelection Process

STEP 1

ESA selects 2 bidders for Due Diligence

Incumbent offer kept

closed

Tender documentation ready

Tender published

Offers Received

Other offers distributed

Evaluation by ESA

2 offers selected



Confirm / update proposals and convert price

Due Diligence

Revised offers

Confirm / update proposals and convert price

DUE DILIGENCE




Evaluation by ESA

One winning bidder recommended

Negotiation with 2 or 3 bidders

Evaluation by ESA

1 winning bidder recommended

Final negotiation and contract Kick Off

STEP 2 Revised offers received

Contract signed




Step 1

30/09

Offers in

.

Bidders Briefing

3rd/4th Quarter 2006

Due Diligence

Step 2

ITT Issue

.

ESA Evaluation

28/02

End DD

Revised Offers

in

20052006

Tender Prepa

Evaluation and Selection scheduleEvaluation and Selection schedule

30/11

30/04 30/05

ESA Evaluation

End Negotiation

ESA Selects Winning Bidder

Contract Kick-Off

StartDD

Contract Signed



Communications with Bidders (1)Communications with Bidders (1)

Communications with potential tenderers shall be formal, in writing, and Communications with potential tenderers shall be formal, in writing, and restricted to what is necessary to ensure clarity of the Agency’s requirements restricted to what is necessary to ensure clarity of the Agency’s requirements and to preserve fair competition. Any communications shall be issued through and to preserve fair competition. Any communications shall be issued through the local Procurement Division/Service.the local Procurement Division/Service.

For this tender: For this tender: Sergio Benetti Sergio Benetti

Tel: +39 06 94180387Tel: +39 06 94180387Fax: +39 06 94180382Fax: +39 06 94180382

The Agency may issue clarifications or amendments to the ITT. In accordance The Agency may issue clarifications or amendments to the ITT. In accordance with the tender conditions, any questions from potential tenderers shall be with the tender conditions, any questions from potential tenderers shall be submitted in writing to the local Procurement Division/Service. Only questions submitted in writing to the local Procurement Division/Service. Only questions concerning the understanding of the Agency’s requirements will be answered. concerning the understanding of the Agency’s requirements will be answered. Amendments and questions and the answers thereto if of possible interest to Amendments and questions and the answers thereto if of possible interest to other potential tenderers, shall be distributed in writing.other potential tenderers, shall be distributed in writing.



Communications with Bidders (2)Communications with Bidders (2)

Tenderers who have not been selected for the placing of a contract will, as a matter of Tenderers who have not been selected for the placing of a contract will, as a matter of routine, be notified thereof by the local Procurement Division/Service, after a final routine, be notified thereof by the local Procurement Division/Service, after a final decision has been taken. Upon request of a tenderer, the contracts officer may, decision has been taken. Upon request of a tenderer, the contracts officer may, together with the initiator, explain to such tenderer the reasons why this tender has not together with the initiator, explain to such tenderer the reasons why this tender has not been accepted. Explanations shall be limited to the findings of the TEB on the tender in been accepted. Explanations shall be limited to the findings of the TEB on the tender in question, and shall not cover the quality or contents of other tenders.question, and shall not cover the quality or contents of other tenders.

"Tenderers are not entitled to contact Agency staff during the evaluation and selection "Tenderers are not entitled to contact Agency staff during the evaluation and selection period..." and further: "..The Agency reserves the right to eliminate from the evaluation period..." and further: "..The Agency reserves the right to eliminate from the evaluation a tenderer contravening this provision."a tenderer contravening this provision."



To know more about ESA tendering:To know more about ESA tendering:

http://emits.http://emits.esaesa..intintclick onclick on

““How to do business with ESA”How to do business with ESA”



How to be a registered user of EMITS:How to be a registered user of EMITS:

http://emits.http://emits.esaesa..intint

click onclick on

Registration RequestRegistration Request





Coffee Break30 minutes


ESA’s IT Outsourcing:ESA’s IT Outsourcing: Subject and ScopeSubject and Scope ObjectivesObjectives SituationSituation ModelModel

Baseline / Delta / OptionalBaseline / Delta / Optional

How to commit workHow to commit work

Eric Schreyers – Head of IT Division



3800 Desktop seats (1100 laptops) – 85 servers

4100 Lotus Notes accounts – 100 servers

100 applications – 70 servers4800 Local Area Network connections

ESACOM Wide Area Network

• 15 ESA Intranet sites

• 15 Extranet sites (partners)

• 6 Internet connections



(excluding application users that are not on ESA sites)

3.700 Service Desk Users

ESTEC (NL)52%

Other Sites8%

ESA-HQ (F)10%

ESRIN (I)13%

ESOC (D)17%



Other Sites: 312 Service Desk Users

67

41

29

16

1610 6 3

124 Villafranca (E)

European Astronaut Centre, Köln (D)

Toulouse (F)

Redu (B)

Brussels (B)

Kourou (French Guyana)

Pasadena-JPL (USA)

Moscow (RU)

Washington (USA)



ObjectivesObjectives

Match ESA’s IS needs with the offerings on the Match ESA’s IS needs with the offerings on the marketmarket

Improve / extend IS services and reduce their costImprove / extend IS services and reduce their cost

Increase organizational flexibility to new IS service Increase organizational flexibility to new IS service models and practicesmodels and practices



ESA’s first structured IT outsourcing started in ESA’s first structured IT outsourcing started in 19991999

20 contracts were managed separately in 199820 contracts were managed separately in 1998

Achieved since then:Achieved since then: Rationalised and centralised management of IT service Rationalised and centralised management of IT service

contractscontracts ‘‘Service’ approach as opposed to a ‘Support’ approachService’ approach as opposed to a ‘Support’ approach Increased scope, size and functionality of IT services Increased scope, size and functionality of IT services Biggest contribution to ESA’s IS cost reductionBiggest contribution to ESA’s IS cost reduction

(complement and obligations)(complement and obligations)



Procurement StatusProcurement Status

Multi-sourcing:

Main Services & Engineering contract

WAN & Mobility Services

Application Maintenance and Functional Support

Additionally:

Third line support

Third party maintenance

Hardware and software

14 companies

250 procurements per annum

with 60 different suppliers

Serco Serco ((VitroCisetVitroCiset))

11 companies11 companies

EquantEquant

Multi-sourcing:

Main Services & Engineering contract

WAN & Mobility Services

Application Maintenance and Functional Support

Additionally:

Third line support

Third party maintenance

Hardware and software

14 companies

250 procurements per annum

with 60 different suppliers

Serco Serco ((VitroCisetVitroCiset))

11 companies11 companies

EquantEquant



Outsourcing StatusOutsourcing Status

Greatest part of service delivery coordination, Greatest part of service delivery coordination, interfaces & coherence management and supplier interfaces & coherence management and supplier management are taken care by ESA: too many ‘lead’ management are taken care by ESA: too many ‘lead’ and coordination processes remain with ESAand coordination processes remain with ESA

Coordination frame: bilateral mechanisms between Coordination frame: bilateral mechanisms between each individual providers and ESA each individual providers and ESA

‘‘One-size-fits-all’ approach alleviated with ‘delta-One-size-fits-all’ approach alleviated with ‘delta-services’ & ‘tailor-made’ support approachservices’ & ‘tailor-made’ support approach

ITILPRINCE2



Outsourcing Model (1)Outsourcing Model (1)

Establish a Prime Contractor in charge of service delivery, Establish a Prime Contractor in charge of service delivery, service coherence and service quality managementservice coherence and service quality management

Prime selects and manages IS service providersPrime selects and manages IS service providers

Extend ‘Managed Service’ concept: outsource complete Extend ‘Managed Service’ concept: outsource complete and coherent service packages and related end-to-end and coherent service packages and related end-to-end processesprocesses



Outsourcing Model (2)Outsourcing Model (2)

1.1. De-fragment the management (Prime Contractor)De-fragment the management (Prime Contractor)

2.2. Include sustaining engineeringInclude sustaining engineering

3.3. Service providers own hardware and softwareService providers own hardware and software

4.4. Prime and service providers commit to deliver service Prime and service providers commit to deliver service improvements and cost savingsimprovements and cost savings

5.5. Develop / promote Service Catalogue and customer Develop / promote Service Catalogue and customer fundingfunding

6.6. Improve ESA’s Sourcing ManagementImprove ESA’s Sourcing Management



ScopeScope

Service Desk

Engineering and Project Support

Desktop

Messaging

Networks Security Mobility

Applications Infrastructure

(Maintenance & Functional Support)

Service Desk

Engineering and Project Support

Desktop

Messaging

Networks Security Mobility

Applications Infrastructure

(Maintenance & Functional Support)



Desktop - Distributed Computing Infrastructure

Messaging - Distributed Computing Applications

Additional Optional Work

Mobility

Service Desk

Networks

Security

Service Delivery and Support

Capacity Management

Availability Management

Service Continuity

Release Management

Incident Management

Problem Management

Configuration Management

Change Management

Service Level Management

Project Management

Asset & Innovation Management

Supplier Management

Transition Management

Risk Management

Governance

Performance Management Measurement & Reporting

Service & Project Portfolio

Financial Management

Application Infrastructure

Desktop - Distributed Computing Infrastructure

Messaging - Distributed Computing Applications

Additional Optional Work

Mobility

Service Desk

Networks

Security

Service Delivery and Support

Capacity Management

Availability Management

Service Continuity

Release Management

Incident Management

Problem Management

Configuration Management

Change Management

Service Level Management

Project Management

Asset & Innovation Management

Supplier Management

Transition Management

Risk Management

Governance

Performance Management Measurement & Reporting

Service & Project Portfolio

Financial Management

Application Infrastructure



Some DefinitionsSome Definitions

Baseline ServicesBaseline ServicesBasic services that are available for all eligible ESA users Basic services that are available for all eligible ESA users

Corporate fundingCorporate funding Included in the requirements – to be quoted Included in the requirements – to be quoted

Delta ServicesDelta ServicesServices that cater for specific needs (not common for all users)Services that cater for specific needs (not common for all users)

Customer fundingCustomer funding Included in the requirements – to be quoted Included in the requirements – to be quoted

Optional WorkOptional WorkAdditional work that might be contracted through Contract ChangesAdditional work that might be contracted through Contract Changes

Corporate or Customer fundingCorporate or Customer funding NotNot included in initial requirements included in initial requirements



How to commit work (1)How to commit work (1)

Contract duration: 5 years + 2 years extension riderContract duration: 5 years + 2 years extension rider Delta services are a significant part and cannot anymore Delta services are a significant part and cannot anymore

be treated as a marginal add-on in year-by-year Contract be treated as a marginal add-on in year-by-year Contract Changes (= current practice)Changes (= current practice)

Start tender with a Start tender with a forecastforecast of 90 M€: of 90 M€: corporate funding for the baseline services covering the first 5 corporate funding for the baseline services covering the first 5

years of the contractyears of the contract customer funding for the delta services covering the initial 3 yearscustomer funding for the delta services covering the initial 3 years

In Q4 2005, agree and negotiate with each customer the In Q4 2005, agree and negotiate with each customer the initial 3 years commitment for delta servicesinitial 3 years commitment for delta services

CommitCommit at contract start: at contract start: baseline services - corporate funding (5 years)baseline services - corporate funding (5 years) delta services - negotiated and agreed customer funding (3 delta services - negotiated and agreed customer funding (3

years)years)




After 3 years running of the contract, After 3 years running of the contract, commitcommit the the remaining 2 years of delta services / customer fundingremaining 2 years of delta services / customer funding

Introduce Introduce optional workoptional work at pace and conditions that suit at pace and conditions that suit ESA:ESA: Application maintenance and functional supportApplication maintenance and functional support Synergies with Ground Segment OperationsSynergies with Ground Segment Operations Project workProject work

If baseline / delta services are successful, optional work If baseline / delta services are successful, optional work will add up to substantial amountswill add up to substantial amounts

After 5 years of running of the contract, After 5 years of running of the contract, commitcommit the 2 the 2 years extensionyears extension




Baseline

Delta Delta

Baseline

Optional Work

2007 2010 2012 2014

Delta

At contract start Rider after 3 years Rider after 5 years Contract Changes


Questions and Answers Questions and Answers

Documents

ESA Information Systems Department Directorate of Operations ESA’s Information Systems Infrastructure and User Support Services Tender - Information Session