1. ESA Information Systems Department Directorate of Operations ESA’s Information Systems Infrastructure and User Support Services Tender - Information Session for IT Outsourcing Industry 30th June 2005 ESA ESRIN Conference Room Magellan

2. ESA Information Systems Department Directorate of Operations Tendering Rules and Tendering Rules and Principles Tender Process:  Schedule  Milestones  Interaction Points Communications with ESA How to do business with ESA Sergio Benetti - Contracts Officer

3. ESA Information Systems Department Directorate of Operations ESA Outsourcing Information Session 30.06.2005 ESA tendering principles Two of the principal provisions of the ESA's Council Contracts Regulations establishing the basic rules read as follows: o ARTICLE 4 establishes that ‘Provisions in these Regulations and in any other instructions concerning the placing of contracts shall always be interpreted so as to ensure the most economic and effective employment of the Agency’s resources,' o ARTICLE 5 (Chapter II) establishes that: 'Open competitive tender shall be the normal procedure for the placing of contracts',

4. ESA Information Systems Department Directorate of Operations ESA Outsourcing Information Session 30.06.2005 Selection 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

5. ESA Information Systems Department Directorate of Operations ESA Outsourcing Information Session 30.06.2005 Confirm / update proposals and convert price Due Diligence Revised offers Confirm / update proposals and convert price DUE DILIGENCE Selection Process

6. ESA Information Systems Department Directorate of Operations ESA Outsourcing Information Session 30.06.2005 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 Selection Process

7. ESA Information Systems Department Directorate of Operations ESA Outsourcing Information Session 30.06.2005 Step 1 30/09 Offers in. Bidders Briefing 3 rd /4 th Quarter 2006 Due Diligence Step 2 ITT Issue. ESA Evaluation 28/02 End DD Revised Offers in 2005 2006 Tender Prepa Evaluation and Selection schedule 30/11 30/0430/05 ESA Evaluation End Negotiation ESA Selects Winning Bidder Contract Kick-Off Start DD Contract Signed

8. ESA Information Systems Department Directorate of Operations ESA Outsourcing Information Session 30.06.2005 Communications with Bidders (1) o Communications with potential tenderers shall be formal, in writing, and restricted to what is necessary to ensure clarity of the Agency’s requirements and to preserve fair competition. Any communications shall be issued through the local Procurement Division/Service. For this tender: Sergio Benetti Tel: +39 06 94180387 Fax: +39 06 94180382 o The Agency may issue clarifications or amendments to the ITT. In accordance with the tender conditions, any questions from potential tenderers shall be submitted in writing to the local Procurement Division/Service. Only questions concerning the understanding of the Agency’s requirements will be answered. Amendments and questions and the answers thereto if of possible interest to other potential tenderers, shall be distributed in writing.

9. ESA Information Systems Department Directorate of Operations ESA Outsourcing Information Session 30.06.2005 Communications with Bidders (2) o 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 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 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. o "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 a tenderer contravening this provision."

10. ESA Information Systems Department Directorate of Operations ESA Outsourcing Information Session 30.06.2005 To know more about ESA tendering: http://emits.esa.int click on “How to do business with ESA”

11. ESA Information Systems Department Directorate of Operations ESA Outsourcing Information Session 30.06.2005 How to be a registered user of EMITS: http://emits.esa.int click on Registration Request

12. ESA Information Systems Department Directorate of Operations ESA Outsourcing Information Session 30.06.2005

13. ESA Information Systems Department Directorate of Operations ESA Outsourcing Information Session 30.06.2005 Coffee Break 30 minutes

14. ESA Information Systems Department Directorate of Operations ESA’s IT Outsourcing: o Subject and Scope o Objectives o Situation o Model Baseline / Delta / Optional How to commit work Eric Schreyers – Head of IT Division

15. ESA Information Systems Department Directorate of Operations ESA Outsourcing Information Session 30.06.2005 3800 Desktop seats (1100 laptops) – 85 servers 4100 Lotus Notes accounts – 100 servers 100 applications – 70 servers 4800 Local Area Network connections ESACOM Wide Area Network 15 ESA Intranet sites 15 Extranet sites (partners) 6 Internet connections

16. ESA Information Systems Department Directorate of Operations ESA Outsourcing Information Session 30.06.2005 (excluding application users that are not on ESA sites) 3.700 Service Desk Users

17. ESA Information Systems Department Directorate of Operations ESA Outsourcing Information Session 30.06.2005 Other Sites: 312 Service Desk Users

18. ESA Information Systems Department Directorate of Operations ESA Outsourcing Information Session 30.06.2005 Objectives o Match ESA’s IS needs with the offerings on the market o Improve / extend IS services and reduce their cost o Increase organizational flexibility to new IS service models and practices

19. ESA Information Systems Department Directorate of Operations ESA Outsourcing Information Session 30.06.2005 ESA’s first structured IT outsourcing started in 1999 20 contracts were managed separately in 1998 Achieved since then: o Rationalised and centralised management of IT service contracts o ‘Service’ approach as opposed to a ‘Support’ approach o Increased scope, size and functionality of IT services o Biggest contribution to ESA’s IS cost reduction (complement and obligations)

20. ESA Information Systems Department Directorate of Operations ESA Outsourcing Information Session 30.06.2005 Procurement Status

21. ESA Information Systems Department Directorate of Operations ESA Outsourcing Information Session 30.06.2005 Outsourcing Status o Greatest part of service delivery coordination, interfaces & coherence management and supplier management are taken care by ESA: too many ‘lead’ and coordination processes remain with ESA o Coordination frame: bilateral mechanisms between each individual providers and ESA o ‘One-size-fits-all’ approach alleviated with ‘delta- services’ & ‘tailor-made’ support approach ITILPRINCE2

22. ESA Information Systems Department Directorate of Operations ESA Outsourcing Information Session 30.06.2005 Outsourcing Model (1) o Establish a Prime Contractor in charge of service delivery, service coherence and service quality management Prime selects and manages IS service providers o Extend ‘Managed Service’ concept: outsource complete and coherent service packages and related end-to-end processes

23. ESA Information Systems Department Directorate of Operations ESA Outsourcing Information Session 30.06.2005 Outsourcing Model (2) 1. De-fragment the management (Prime Contractor) 2. Include sustaining engineering 3. Service providers own hardware and software 4. Prime and service providers commit to deliver service improvements and cost savings 5. Develop / promote Service Catalogue and customer funding 6. Improve ESA’s Sourcing Management

24. ESA Information Systems Department Directorate of Operations ESA Outsourcing Information Session 30.06.2005 Scope

25. ESA Information Systems Department Directorate of Operations ESA Outsourcing Information Session 30.06.2005

26. ESA Information Systems Department Directorate of Operations ESA Outsourcing Information Session 30.06.2005 Some Definitions Baseline Services Basic services that are available for all eligible ESA users Corporate funding  Included in the requirements – to be quoted Delta Services Services that cater for specific needs (not common for all users) Customer funding  Included in the requirements – to be quoted Optional Work Additional work that might be contracted through Contract Changes Corporate or Customer funding  Not included in initial requirements

27. ESA Information Systems Department Directorate of Operations ESA Outsourcing Information Session 30.06.2005 How to commit work (1) o Contract duration: 5 years + 2 years extension rider o Delta services are a significant part and cannot anymore be treated as a marginal add-on in year-by-year Contract Changes (= current practice) o Start tender with a forecast of 90 M€: ä corporate funding for the baseline services covering the first 5 years of the contract ä customer funding for the delta services covering the initial 3 years o In Q4 2005, agree and negotiate with each customer the initial 3 years commitment for delta services o Commit at contract start: ä baseline services - corporate funding (5 years) ä delta services - negotiated and agreed customer funding (3 years)

28. ESA Information Systems Department Directorate of Operations ESA Outsourcing Information Session 30.06.2005 How to commit work (2) o After 3 years running of the contract, commit the remaining 2 years of delta services / customer funding o Introduce optional work at pace and conditions that suit ESA: ä Application maintenance and functional support ä Synergies with Ground Segment Operations ä Project work If baseline / delta services are successful, optional work will add up to substantial amounts o After 5 years of running of the contract, commit the 2 years extension

29. ESA Information Systems Department Directorate of Operations ESA Outsourcing Information Session 30.06.2005 How to commit work (3) Baseline Delta Baseline Optional Work 200720102012 2014 Delta At contract startRider after 3 yearsRider after 5 yearsContract Changes

30. ESA Information Systems Department Directorate of Operations Questions and Answers