Source · Select Committees · Public Accounts Committee
Recommendation 28
28
Accepted
Department plans non-competitive extension of EE’s ESN contract despite slow infrastructure progress.
Conclusion
In 2015, the Home Office awarded EE a six-year contract to provide the main network infrastructure for ESN. It intended for this contract to be subject to competition in the future, to avoid being locked into a single supplier and to help take advantage of 81 Qq 30, 53–54 (27 March) 82 Q 31 (27 March) 83 Q 10 (26 April) 84 Q 47 (27 March) 85 ESN0001 86 Q 4 (26 April) 87 Q 10 (26 April) 88 Q 11 (26 April) 89 Qq 12, 26 (26 April) 90 C&AG’s Report, para 2.30 91 C&AG’s Report, paras 15, 2.28 92 Q 35 (26 April) 93 Q 15 (26 April) 16 The Emergency Services Network innovations. As part of the 2018 programme reset, the Department extended EE’s contract by three years to December 2024. It currently plans to award EE a new contract, without competition, thereby extending EE’s involvement in ESN. Although EE has made progress on the network infrastructure, its work has proceeded slower than expected and was not complete, with six sites unfinished when the NAO reported in March 2022.94
Government Response Summary
The government agrees with the committee's observation, stating that the new contract with EE will be awarded on an open book basis with a gain share mechanism. Crucially, the contract will be structured to allow for reprocurement of all ESN suppliers around two years after programme completion, enabling future commercial competition.
Government Response
Accepted
HM Government
Accepted
6.1 The government agrees with the Committee’s recommendation. Target implementation date: December 2023 6.2 Home Office commercial officials and Cabinet Commercial Services have reviewed the non-binding heads of terms, and independent economists and commercial lawyers have critiqued these reviews to ensure to the greatest extent possible that a contract based upon these terms represents value for money. 6.3 The new contract with telecommunications company EE will be awarded on an open book basis with a gain share mechanism built in. This will give us visibility over their costs and gross profit margin, with any savings made through, for example, greater efficiency, being shared between EE and the Home Office. 6.4 The new contract will be structured to allow for the Home Office to reprocure all ESN suppliers around 2 years after programme completion. 6.5 The entire programme is being delivered in line with international technical standards. This will enable commercial competition for the supply of all elements at regular intervals.