Hybrid Information Technology Outsourcing RFP Clarification Presentation: MSA Fehmidah Koor 15 March 2019
RFP - MSA • Mandatory requirement- it must be submitted on or before close of tender • The MSA must be duly accepted by the authorised representative • The Tenderer is required to sign the terms without any mark ups • Multi vendor tender- it will be required of all the tenderers to sign the co operation agreement between Eskom and the other third party tenderers at the time of contract award • Section 197 Transaction applies to this transaction 2019/03/16 2
MSA Structure - Schedule A - Definitions - Schedule B - Service Descriptions - Schedule C - Performance Management - Schedule D - Charges - Schedule E - Governance Schedule F – Demand Management - Schedule G – Transition - Schedule H – Transformation - Schedule I – Exit Assistance - Schedule J – Parent Guarantee - Schedule K – Performance Bond - Schedule L – Cooperation Agreement Template - Schedule M – Critical Deliverables - Schedule N – Value And Competitiveness Rider - Schedule O – HR Provisions - Schedule P – POPI Agreement - - Schedule Q- Cloud 2019/03/16 3
Eskom Information Technology Outsourcing MSA Structure Specific alone standing agreement that regulates the The legal terms processing of personal information CONDITIONS POPI AGREEMENT TERMS AND The deal definitional schedules. Define and The standby protect value in the schedules not required deal and provide the other than for specific basis from which purposes evolution and change is made VALUE AND SERVICES COMPETITIVE- - description NESS RIDER - performance - Standards - Cloud HR GOVERNANCE PRICING AND DEMAND EXIT MANAGEMENT MANAGEMENT CO-OPERATION AGREEMENT Security for proper The transient performance by supplier schedules . Required of its obligations over for specific periods the life of the agreement and purposes, and end once the purpose CRITICAL DELIVERABLES is fulfilled. The relationship tool for managing the TRANSITION ongoing contract as it evolves over time Specific alone standing agreement for conclusion between supplier and various Eskom appointed third party suppliers 2019/03/16 4
MSA: Main Schedule (including Structure of Agreements; INTRODUCTION 1 Condition Precedent) (including Term and Service Period, Right to TERM 2 Withdraw Services, Exit Assistance Periods includes all Eskom subsidiaries and its SERVICE RECIPIENTS 3 affiliates SUBCONTRACTORS As per the RFP required to subcontract 4 THIRD PARTY SUPPLIER CO-OPERATION includes – Schedule L 5 AND SERVICE INTEGRATOR INTELLECTUAL PROPERTY RIGHTS AND Deals with both parties IP 6 SOFTWARE CONFIDENTIALITY, ESKOM DATA AND (including Eskom Data) 7 DATA PROTECTION WARRANTIES, REPRESENTATIONS AND (including indemnities) 8 UNDERTAKINGS (including Escalation, Excused Performance LIABILITY 9 and Step-In Rights 10 TERMINATION (including termination for convenience) 11 MISCELLANEOUS (including Anti Bribery and Fraud) 2019/03/16 5
MSA: Legal Terms and Conditions • Term - 5 Years inclusive of both the transition and exit period • Services Recipients - All the subsidiaries and the other affiliates to which Eskom is a party • Subcontracting - As per the specific RFP requirements • Third Party Supplier Co operation – Multi vendor transaction should be read in conjunction with Schedule L • Intellectual Property Rights – regulates the licensing and development arrangements • Confidentiality and Data Protection- Read in conjunction with Schedule P • Warranties – Includes standard warranties for an IT Outsourcing Transaction 2019/03/16 6
Cont. MSA: Legal Terms and Conditions • Supplier Liabilities – Capped to the greater of – 200% of the charges for the contract year or 100% of the charges of all the contract years • Applicable to all the tenders except for IaaS (central and regional) – Capped to the greater of 300% of the charges for the contract year or 100% of the charges of all the contract years • Insurance – Please ensure you complete the table – provide the necessary supporting documents to verify the cover • Termination – Convenience- read in conjunction with Schedule D • Withdrawal of Service – Up to 80% no early termination fee 2019/03/16 7
BBB EE • Eskom criteria for compliance is as per the specific RFP – Submit a valid BBBEE Certificate prior to close of tender • Service Credits will be levied for failure to meet the targets/levels during the term • Changes in legal status or BBBEE ratings/levels – Eskom to be notified otherwise a ground for termination • Annual basis - submit BBBEE Certificate • Audit – read in conjunction with Schedule E • SD&L (Supplier Development & Localisation) - As per the specific RFP. Supplier will be required to meet targets 2019/03/16 8
Schedule C: Performance and Consequence Management Performance Standards Deliverable Qualitative and Services Credits (Transition, KPI’s Quantitative Project and Levels Transformation Measures Performance Standards) Service Improvement Plans and Service Credits Note: Transition to be executed within 3 months or less
Service Credit Methodology Calculation: SC=WFxPLMxCLFxAt Risk Amount (SLP = Service Level Performance) Weighting Performance Service Factor (WF)/ Level Consecutive Failure Level Multiplier Multiplier (PLM) Multiplier (CFM) 1 No single TBD SLP is below Target Level but above 2 consecutive failure in SL > 100% Defective Level - x1 relation to a service level - x2 SLP is below Defective Level but above Material Default Level - x1.5 3 or more consecutive failures in relation to a SLP is below Material Default Level - x2 service level - x4 Critical Default - LDs / Step In / SLP is below Target Termination Service Level for any 4 consecutive measurement periods OR below the Defective Level for any 2 consecutive measurement periods = Critical Service Level Default (StepIn/Termination Damages)
Service Credit Methodology (continue) Calculation: SC=WFxPLMxCLFxAt Risk Amount (SLP = Service Level Performance) Weighting Performance Service Factor (WF)/ Level Consecutive Failure Level Multiplier Multiplier (PLM) Multiplier (CFM) 2 TBD 3 TBD 4 TBD 5 TBD At Risk Capped at Amount: 15% 200% of 15% of Monthly Charges
Deliverable Credits Weighting Calculation Milestone Transition Milestone 0%-100% DC =WFxMonthly Charges for Transition Services Project Milestone 0%-100% DC =WFxProject Milestone Payment Transformation Milestone 0%-100% DC= WFx Monthly Charges for Transition Services At Risk Amount - 15% of Monthly charges of Project 2019/03/16 12
SD&L CREDITS Delay in Date for Achieving Threshold Credit / Remedy 2.5% Monthly Charges for each day of 1 to 180 days delay Further delay (>180) Step In / Termination 2019/03/16 13
Consequence Management: Change and Exceptions Types of Change : • Adding new Service Levels or KPI’s • Deleting Service Levels or KPI’s • Changing Weighting Factors • No single SL’s WF > 100 % Excused Events (failure by Eskom to perform defined Eskom Dependencies): • Relief against Service Credits • Prescribed list of events • Subject to rules and process (Relief Notice) 2019/03/16 14
Schedule O: HR S197 on entry S197 will apply on commencement of the Services following Transition Employee terms and conditions will be provided to bidders during RFP process • Information and consultation process prior to transfer • Collaborative approach to ensure smooth transition Employees falling Successor Supplier: Accrued and unpaid rights to • within the scope of severance/leave etc. services to be - Required to propose values to be agreed and set • automatically intended approach to out in contract transfer employees transferred Accrued rights to transfer in • full • Transferred employees not to be dismissed/retrenched for 12 months after commencement of the services Pensions: Eskom will provide pension details - Supplier to confirm pension arrangements that will apply to transferring employees 2019/03/16 15
HR – S197 on exit S197 will apply on exit from the Agreement (in whole or in part and potentially a withdrawal) Eskom will work with outgoing supplier and incoming supplier to assess employee needs Supplier expected to staff appropriately over life of contract to mitigate risks Incumbent Supplier Successor Supplier of large number of unwanted Transferring Employees. Employees Restriction on amendments to Employee terms and conditions 12 months prior to expiry or upon notice of expiry of the contract 2019/03/16 16
Thank you 2019/03/16 17
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