Ordinary Council Meeting - 07 August 2008


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L††††††† General Manager Report

L.1†††† Alliance Tender for the Provision of a Corporate Software System

Ordinary Council Meeting

7 August 2008

General Manager's Report

ITEM L.1††††† SF484††††††††††††† 070808†††††††† Alliance Tender for the Provision of a Corporate Software System


AUTHOR/ENQUIRIES:†††† Chris Mattick, Manager Information Technology; Michael Coulter, General Manager †††††††




Council has to consider replacing its corporate software at some point in time.Its software provider, Fujitsu has been acquired by a rival company Civica, who has stated that whilst it will maintain the Fujitsu software for an indefinite period, it will discontinue development of the software.In time this will mean that the software will not meet basic compliance requirements.


It is proposed that Council consider the options for replacing the software via an alliance tender with 5 other Fujitsu serviced Councils being Bega, Ballina, Bathurst, Gunnedah and Upper Hunter.Council has complete discretion in accepting or not accepting any tenders or taking itself out of the process at any time.





That Council proceed with the proposed alliance tender for the supply, installation, training and annual maintenance of a corporate software system.







Council has the option of participating in the tender or not participating.There would seem to be no risks associated with participating in the tender but the opportunity to achieve a discount on implementation and training which would otherwise not occur.Therefore there is no real option other than to participate.





Councilís major corporate software includes its property information system, applications system, rating system, payroll and all financials.The software is integrated in that Council staff have the ability to readily move between its different applications.The software was purchased from a firm called ICL Australia in 1990 which was subsequently taken over by Fujitsu Australia.Along with purchasing the software Council enters into a support and annual maintenance agreement which in 2008/2009 will cost $60,000.The agreement provides for the rectification of any faults and for the on-going development of the software to ensure legislative compliance.In the past there have been on average 4 new software releases per year.


In terms of corporate software Nambucca Shire Council has been served well by the Fujitsu product.Fujitsu also provide corporate software to about 43 other Councils, mainly in NSW.


Fujitsu Australia has now been taken over by a competing local government software provider, Civica.Civica have advised that they will maintain the Fujitsu software for an indefinite period but have advised they will not undertake significant development of the software.This means that over time it will become increasingly difficult to ensure compliance with legislative change and emerging requirements.


Council through its Manager Information Technology is in the fortunate position of being a member of LOGITA which stands for Local Government Information Technology Alliance.The LOGITA group is essentially six medium to large Fujitsu supplied Councils being Bega, Bathurst, Ballina, Nambucca, Gunnedah and Upper Hunter.The LOGITA group have been concerned for some time about the direction of Fujitsu in terms of software development.Now that Fujitsu has been sold, Ballina Council with support from the other member Councils has prepared on behalf of the LOGITA group Councils a request for tender for corporate software solutions.


The tender will provide, for each Council, as follows:


i.                COUNCIL reserves the right to:


a.             reject any or all Tenders;


b.             waive any irregularities contained in any Tender; or


c.             accept any Tender even though that Tender may be less favourable financially to††† †††††††††††††††††† ††COUNCIL than a Tender submitted by some other Tenderer.


ii.         Council reserves the right to consult with one or more of the Tenderers after the close of tenders in order to clarify the contents of any tender and/or discuss minor design amendments that do no substantially alter the original tender submission.


iii.        During the tender evaluation period Council may consult with a Tenderer to vary the Tenderers proposal either on the grounds of technical capability, its cost and effectiveness, or matters relating to the combination of the tender with another part of the tender.


iv.       Without limiting its rights at law or otherwise, Council reserves the right in its absolute discretion at any time todo one or any combination of the following:


a.        Evaluate Tenders as Council sees appropriate in the context of its requirement for the Project;


b.        Cease to proceed with any process outlined in this Request for Tender or any one or more steps referred to in this Request for Tender or any subsequent process;


c.          Suspend or vary, including extend, the Request for Tender process or any part of it;


d.        Determine in accordance with the Request for Tender the level of compliance demonstrated by particular Tenderers.


e.        Deal separately with any of the divisible elements of any Tender, unless the relevant Tender specifically states that those elements must be taken collectively.


v.         In the course of the evaluation process, the Council may request additional information by way†††† of clarification or otherwise.The cost of providing any additional information must be borne by the Tenderer.


vi.       Tenderers are advised that the Council reserves the right to seek clarification, verification and additional information from third parties, and the Tenderer authorises the Council to do so.


vii.       Council is not bound to appoint a Preferred Tenderer or enter into a formal contract.


viii.      The fact that a Tenderer is appointed a Preferred Tenderer does not guarantee that Council will proceed to enter into a contract with the Preferred Tenderer.


ix.        Council may, at any time (whether before or after appointment of a Preferred Tenderer) and in its absolute discretion, elect:


a.             Not to proceed with the proposed contract; or


b.             To proceed with the proposed contract on the basis of a scope of work of a different††† nature and size and otherwise on terms different from that set out in this Request.


The draft tender is 150 pages in length and the General Manager can make a copy available to any Councillors who may wish to view it.At the date of preparing this report the other participating LOGITA Councils were consulting on its finalisation.Until it is finalised it cannot be made available for general public viewing.


In summary, notwithstanding that Council is part of the LOGITA group, it has absolute discretion and authority to act on its own behalf but does retain the significant advantage of being able to consult with the other tendering Councils and to combine with a minimum of four of those Councils to achieve a discount on implementation and training.There are also opportunities to share costs in a joint solution in that implementation problems such as data conversion will be solved for participating Councils instead of one.There is also potential for economies in training resource sharing.


Given on-going concerns about the future of the Fujitsu software, Council has had a reserve in place for its replacement.By 30 June 2008 the reserve will have a balance of $184,500.From discussions with software providers, the tenders may propose different costing models with either higher up front establishment costs and lower annual recurring costs; or lower establishment costs and higher annual recurring costs.Besides considering the software product, Council will also need to consider the most desirable financing arrangement.Whilst Council has to follow a tender process, there is confidence that the reserve will be adequate.


Council has nothing to lose in participating in the alliance tender and has the real potential to achieve a long term corporate software solution at a discounted price.





The Manager Information Technology is in communication with the other 5 LOGITA Councils.The Manager Information Technology and General Manager have discussed the strategic issues in introducing new corporate software.







There are no implications for the environment.




There are no social implications.




There are no economic implications.




The impact on the organisation in introducing such software cannot be underestimated.There will be a significant commitment required from the whole organisation to encompass a change of this magnitude.There are always unforeseen risks in the installation of such major software, usually in training and application.On the other hand new software will provide enhanced capabilities to what Council currently has with the Fujitsu system.


Conversely there are risks in doing nothing, in that Council may lose any cost advantage in acting with the LOGITA group and be burdened with its existing software which will over time not be able to meet the increasing expectations of both internal and external customers.Eventually the software will become obsolete.




Direct and indirect impact on current and future budgets


This report has no impact on current and future budgets.


Source of fund and any variance to working funds


This report has no impact on working funds.



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