Programme Delivery Model
Broadband Delivery Programme
Commercial and Procurement Approach
This section sets out:
A description of the main commercial models that local bodies may consider;
A description of the key procurement terms;
A summary of the overall sourcing approach for the pipeline of projects in the Broadband Delivery Programme; and
A description of how State Aid obligations will be managed.
The Broadband Delivery Programme‟s locally led delivery model puts the responsibility on local bodies to secure the best possible project outcome from the private sector. As the contracting authority, local bodies must determine the best value for money route for their circumstances, with BDUK‟s support.
A number of local bodies have expressed that they are seeking for BDUK to streamline the procurement process and provide a standardised default route to simplify the procurement where local bodies do not have specific requirements that drive an alternative approach. Similarly, through market engagement, suppliers are requesting standard procurement requirements and a consistent approach to reduce the overhead of bidding for the pipeline of projects.
Early projects will lead their own procurement processes, and BDUK will work with these local bodies to identify the best ways to simplify and standardise procurement routes. BDUK will seek to put in place a procurement framework for the investment gap funded approach that further projects can call-off from where appropriate. In addition, BDUK will procure a separate framework for local bodies to allow consumers and businesses to access broadband services through satellite where it is not economic to use alternative solutions.
BDUK will seek an umbrella State Aid approval from Europe for the programme of procurement activities, so that BDUK acts as a competency centre assuring the European Commission that individual projects adhere to the principles of the umbrella notification.
BDUK recognises that various different commercial models have been deployed by public sector organisations in previous local broadband interventions that were applicable to their circumstances. These are summarised below:
Local Body investment gap funding: Under this approach a local body would procure broadband infrastructure services from a private sector supplier (a single supplier or more likely a consortium) through a service contract. BDUK will provide funding, through a grant, to the local body as a contribution to the payments made by the local body to the supplier under the contract.
Comment: This approach is the simplest form of model from a BDUK perspective. The model should also allow appropriate risk transfer to the private sector though a services contract between the local body and a supplier. However, under this approach there is