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TELSTRA WHOLE OF GOVERNMENT AGREEMENT

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TELSTRA WHOLE OF GOVERNMENT AGREEMENT

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									                                                                                          Agenda Item 5.6
COUNCIL REPORT

                                                                                       26 September 2006

TELSTRA WHOLE OF GOVERNMENT AGREEMENT


Committee         Finance and Governance


Presenter         Cr Shanahan


Purpose

1.     To seek Council approval of the Telecommunications Purchasing and Management Strategy
       (“TPAMS”) Agreement with Telstra for the provision of data services under the Umbrella TPAMS
       agreement between Multimedia Victoria (“MMV”) of the State of Victoria and Telstra.


Recommendation

2.     That Council:

       2.1.   enter into a contract (“Telstra Contract”) for the provision of data services with Telstra, in its
              capacity as a Government Approved Telecommunications Supplier under the terms of the
              Telecommunications Purchasing and Management Strategy (“TPAMS”) Non-Crown Body
              Agreement, for a period of 3 years with a further option to extend of one year;

       2.2.   enter into the TPAMS Non-Crown Body Agreement (“TPAMS agreement”), agreeing to be
              bound by the terms of the TPAMS Head Agreement and Data Service Agreement between
              Multimedia Victoria (“MMV”) and Telstra, and to appointing MMV as an agent to act on
              behalf of the Council in accordance with the terms;

       2.3.   by instrument of delegation sealed by the Council under section 98(1) Local Government Act
              1989 (“the Act”) delegate to the Chief Executive Officer, or the persons from time to time
              acting in that position, the authority to enter into the arrangements referred to in paragraphs
              2.1 and 2.2 above including executing all necessary documents and to do all things incidental
              and ancillary to the same; and

       2.4.   under section 98(3) of the Act, authorise the instrument of delegation to the Chief Executive
              Officer, or the person from time to time acting in that position, to empower him or her to
              delegate any power, duty or function delegated to him or her under the paragraph above, to a
              member of Council staff.




Council Report Attachment:
1.    Finance and Governance Committee, Agenda Item 5.2, 12 September 2006
                                               Page 1 of 6



FINANCE AND GOVERNAN CE COMMITTEE                                                        Agenda Item 5.2
REPORT

                                                                                      12 September 2006

TELSTRA WHOLE OF GOVERNMENT AGREEMENT


Division       Finance


Presenter      Craig Liddy, Chief Information Officer


Purpose

1.   To seek Council approval of the Telecommunications Purchasing and Management Strategy
     (“TPAMS”) Agreement with Telstra for the provision of data services under the Umbrella TPAMS
     agreement between Multimedia Victoria (“MMV”) of the State of Victoria and Telstra.


Recommendation from Management

2.   That the Finance and Governance Committee recommend that Council:

     2.1.   enter into a contract (“Telstra contract”) for the provision of data services with Telstra, in its
            capacity as a Government Approved Telecommunications Supplier under the terms of the
            Telecommunications Purchasing and Management Strategy (“TPAMS”) Non-Crown Body
            Agreement, for a period of 3 years with a further option to extend of one year;

     2.2.   enter into the TPAMS Non-Crown Body Agreement (“TPAMS agreement”), agreeing to be
            bound by the terms of the TPAMS Head Agreement and Data Service Agreement between
            Multimedia Victoria (“MMV”) and Telstra, and to appointing MMV as an agent to act on
            behalf of the Council in accordance with the terms;

     2.3.   by instrument of delegation sealed by the Council under section 98(1) Local Government Act
            1989 (“the Act”) delegate to the Chief Executive Officer, or the persons from time to time
            acting in that position, the authority to enter into the arrangements referred to in paragraphs
            2.1 and 2.2 above including executing all necessary documents and to do all things incidental
            and ancillary to the same; and

     2.4.   under section 98(3) of the Act, authorise the instrument of delegation to the Chief Executive
            Officer, or the person from time to time acting in that position, to empower him or her to
            delegate any power, duty or function delegated to him or her under the paragraph above, to a
            member of Council staff.


Key Issues

3.   TPAMS is a State Government initiative aimed at delivering cheaper telecommunications services
     across Government through the aggregation of demand for the services. It is the State
     Government’s policy for Local Government to be given access to these services.

4.   The Minister for Local Government has exercised her discretionary power under the Act and
     exempted contracts entered into by Councils under TPAMS from the tendering requirements in
     section 186 of the Act.
                                                  Page 2 of 6



5.        The TPAMS agreement covers Voice, Mobile and Data services being provided by a number of
          Government Approved Telecommunication Suppliers.

6.        Telstra is a Government Approved Telecommunication Supplier for data services.

7.        The City of Melbourne currently requires upgrades to 19 of the 22 network links that operate in its
          district. These upgrades are required to support the additional network traffic that is being
          demanded as a result of new systems, greater utilisation of existing systems and the continuing
          demand for greater access to information.

8.        By entering into the Telstra contract for data services under the TPAMS agreement, the City of
          Melbourne will be able to upgrade and provide necessary data services for all sites for a
          significantly lower price than would otherwise have been achievable without access to the buying
          power of the Whole of Victorian Government.

9.        Under the existing arrangements the level of service would be insuffic ient to meet the needs of the
          organisation and the cost of the services would escalate above the proposed rates under the
          TPAMS agreement. It is estimated that the increase in costs would be between $300,000 and
          $800,000 per annum.

10.       Upgrading the network links is estimated to be $76,000. Under the Telstra contract and the
          TPAMS agreement the cost of upgrading is waived.

11.       TPAMS is supported by the Municipal Association of Victoria and a number of other local
          authorities have already entered into arrangements through the TPAMS agreement including
          Boroondara, Yarra Ranges, Brimbank and Whittlesea.

12.       The option of tendering either in the City of Melbourne’s name or under Strategic Purchasing was
          rejected based on the volume discounts obtained under the TPAMS agreement.

Coverage of Services

13.       Data services for all City of Melbourne sites are covered by this agreement, including:

      o    Artplay                                               o   Melbourne City Child Care Centre

      o    North Melbourne Meat Market                           o   North Melbourne Children’s Centre

      o    Council House                                         o   North Melbourne MCHS

      o    Melbourne City Baths                                  o   Powlett Reserve MCHS

      o    North Melbourne Town Hall                             o   Fawkner Park MCHS

      o    Sinclair’s Cottage                                    o   Docklands Hub

      o    Archives Repository                                   o   Lost Dogs Home

      o    Carlton Family Resource Centre                        o   Cooks Cottage

      o    Central Carlton Children’s Centre                     o   Fish Market

      o    Kensington MCHS                                       o   Building Maintenance Office

      o    Lady Huntingfield Children’s Centre                   o   Melbourne Visitor Booth


                                                                                                                 2
                                                Page 3 of 6



Time Frame

14.     Upon approval from Council and execution of the Telstra contract and TPAMS agreement, Telstra
        will immediately schedule works to upgrade the links.

15.     The term of the Telstra contract and TPAMS agreement will require Council to commit to the
        arrangement until 2010.

Relation to Council Policy

16.     Council aims to deliver quality services that are responsive to business and community expectations,
        demonstrably cost-effective and subject to public accountability. Council is committed to delivering
        its services equitably and in a way that meets customer needs, minimises costs and recognises
        Council accountability.

Government Relations

17.     The TPAMS agreement appoints MMV to act exclusively on behalf of the City of Melbourne for
        the purpose of acquiring TPAMS Products and Services including:

        17.1. representing the City of Melbourne in negotiating and preparing the Telstra contract and
              providing any notice or instruction required under the Telstra contract;

        17.2. resolving any disputes with Telstra; and

        17.3. representing the City of Melbourne if any dispute arose between the City of Melbourne and
              Telstra.

18.     Being part of the Whole of Government approach to telecommunications provides an opportunity to
        benefit from economies of scale, aggregate services and strengthened bargaining power. Working
        together will achieve significant price reductions in telecommunications. A minimum of 5,000 sites
        will be covered by the arrangements with Telstra, including all State Government departments.

Finance

19.     The estimated cost of data services is $400,000 over the 4 year life of the Telstra contract, or
        $100,000 per annum.

20.     Whilst the majority of City of Melbourne network connections will increase in size, annual costs are
        expected to remain the same as current network charges paid by City of Melbourne.

21.     Under the arrangements, Telstra prices are expected to decrease by 5% per annum after an initial
        18 month period.

Legal

22.     The Minister for Local Government has exercised her discretionary power under section 186 of the
        Act, allowing the Council to enter into the arrangement without being first required to give public
        notice and invite tenders. Legal advice has and will continue to be provided as required in respect to
        the subject matter of the report.




                                                                                                             3
                                              Page 4 of 6



Comments

23.   The MMV have gone to tender for the TPAMS services and have received exemption from the
      Minister for Local Government by demonstrating that appropriate procurement procedures were
      followed and that significant value has been achieved.


Background

Current Arrangements

24.   All data services are currently provided by Telstra, at Local Government rates, on a month by
      month basis.

Proposed Arrangements

25.   Under the proposed arrangements:

      25.1. all data services will be provided by Telstra;

      25.2. these services will be upgraded based on the needs of the business areas; and

      25.3. the City of Melbourne will receive the advantage of the Whole of Government rates for data
            services as negotiated with Telstra under the TPAMS agreement for up to the next four
            years.

Rationale for entering into this arrangement

26.   To continue to build the City of Melbourne relationship with the State Government in relation to
      Information Technology and Communications.

27.   The upgrades will facilitate increased productivity to remote sites linking to Council House such as
      Artplay, City Baths, North Melbourne Town Hall, Sinclair’s Cottage, Docklands and Carlton Family
      Resource Centre. If the upgrades do not occur then these services will eventually slow to
      unacceptable levels.

28.   The upgrades will reduce the complexity of our network structure and our network routers will be
      replaced by Telstra owned and managed routers. This will reduce the reliance on internally
      maintained equipment and the technical expertise of staff required to maintain the network.

29.   There is no incremental cost to upgrade the data services.

30.   The proposed arrangements will provide access for the City of Melbourne to reduced monthly
      charge rates for the data services required than otherwise would be available to it. Overall the
      State Government tender provides access to significant savings for the City’s data requirements.




                                                                                                         4
                                                  Page 5 of 6

                                                                                        Agenda Item 5.2
                                                                      Finance and Governance Committee
                                                                                     12 September 2006



FINANCE ATTACHMENT



TELSTRA WHOLE OF GOVERNMENT AGREEMENT



The financial implications are contained in the body of the report.




Joe Grohe r
Manager Financial Services
                                                 Page 6 of 6

                                                                                       Agenda Item 5.2
                                                                     Finance and Governance Committee
                                                                                    12 September 2006



LEGAL ATTACHMENT



TELSTRA WHOLE OF GOVERNMENT AGREEMENT



Legal advice has and will continue to be provided as required in respect to the subject matter of the
report.

Section 186 of the Local Government Act 1989 (“the Act”) provides that before a Council enters
into a contract for the purchase of goods or services, or for the carrying out of works, to the value of
$100,000 or more it must give public notice of the purpose of the contract and either invite
expressions of interest or tenders from any person wishing to undertake the contract.

However, section 186 provides for exemptions from the above requirements in certain circumstances
including if:

         “the contract is entered into in accordance with arrangements approved by the
         Minister for the purposes of this sub-section;”

The Minister for Local Government has exercised her discretionary power under section 186 of the
Act, issuing an exemption from tendering for contracts entered into under the TPAMS arrangement.




Kim Wood
Manager Legal Services

								
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