On Tuesday, the Department of Energy and Climate Change (DECC) published Contract Notices calling for applications for the contracts for the provision of smart metering data and communications services. This commences the competitive dialogue procurement process for data and communication services that will be contracted through the central Data and Communications Company (DCC). DCC is a special purpose company, yet to be created, which is to handle data communicated to and from smart meters. Separate procurement processes are being undertaken for each of the data and communications service contracts. Bidders should register their request to participate in the competitive dialogue by completing a Pre-Qualification Questionnaire. The deadline is 14 October 2011. This article provides a summary of the contracts that are available for tender and some background to smart metering developments to date.
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On Tuesday, the Department of Energy and Climate Change (DECC) published, in the European public procurement journal Tenders Electronic Daily, Contract Notices calling for applications for the contracts for the provision of smart metering data and communications services. This commences the competitive dialogue procurement process for data and communication services that will be contracted through the central Data and Communications Company (DCC). DCC is a special purpose company, yet to be created, which is to handle data communicated to and from smart meters. Separate procurement processes are being undertaken for each of the data and communications service contracts. Bidders should register their request to participate in the competitive dialogue by completing a Pre-Qualification Questionnaire. The deadline is 14 October 2011.
The contracts on offer
1. The IT Services Contract Notice covers the procurement of
data services for DCC to assist in managing smart meter information
from over 30 million households and businesses across GB. This will
include three main work packages: developing and implementing the
software solutions; IT hosting; and application management
services. It is expected that all three work packages will be
awarded to a single bidder through a single contract with break
clauses between work packages. The term of the contract will be up
to 12 years and the value of the contract could be as much as GBP
240m.
The Wide Area Network Contract Notice covers the procurement of
communications services to connect meters in up to 30 million
households and businesses across GB. The communications services
will be divided into three geographically based lots:
1. northern GB including Scotland;
2. central GB including Wales; and
3. southern GB.
Bidders may bid for one, two or all three lots and multi-lot
discounts will be considered. For each lot bidders will be expected
to: provide communications services for up to 100% of smart meters
in the specified geographic area; supply the communications module
that will allow the smart meter to connect to the communications
service; and connect the communications service to one or more data
centre locations (to be specified). Bidders may also be expected to
take responsibility for communications services to compliant smart
meters already installed within the specified geographic area. The
term of the contract will be up to 20 years and the value of the
contract is stated to be between GBP 330m and GBP 1,525m.
The communication of data to and from smart meters in the domestic
sector will be managed centrally by DCC. DCC will provide a two-way
communications channel between smart meters and a central
communications hub. Smart meter service users (suppliers, network
companies and other authorised third parties) will be granted
access to the data for specified and limited purposes.
The possible installation of some smart-metering equipment is also
anticipated during the foundation stage of implementation, which is
the period before DCC is operational. During the foundation stage,
suppliers opting to install early will be responsible for preparing
their own communications procurement contracts. To provide greater
commercial certainty to these suppliers, the Government will
require DCC to adopt communications contracts relating to compliant
smart metering systems installed during the foundation stage.
Adoption will be subject to the communications contracts meeting
the agreed pre-defined criteria. The Smart Metering Implementation
Programme (SMIP) is currently working to develop appropriate
adoption criteria, but the criteria will be available before any
significant roll-out of compliant smart metering systems. The scope
of the IT Services Contract(s) discussed above allows for the
adoption of communications contracts to the extent that there is a
net benefit and a limit may be applied.
2. Key events in the timeline
27 July 2010: the Government (and the Office of Gas and
Electricity Markets (Ofgem)) published a prospectus containing proposals for the
delivery of electricity and gas smart metering in GB.
- 30 March 2011: the Government (and Ofgem) published the
Government's response to the prospectus.
- 12 May 2011: the Government published the Prior Information Notice (PIN), informing the
markets of prospective opportunities arising from the GB Smart
Metering Implementation Programme.
- 17 June 2011: SMIP launched its Project Information Memorandum
(PIM).
- 18 August 2011: the Smart Metering Implementation Programme
published a consultation on draft licence conditions and
technical specifications for the roll-out of gas and electricity
smart metering equipment. This includes requirements with respect
to In-Home Displays and interoperability. Responses should be
submitted by 13 October 2011.
- 30 August 2011: contract notices published, commencing the process for the competitive procurement of the data and communication services that will be contracted to DCC. Responses should be submitted by 14 October 2011.
If you have any questions about the above article, or would like
to discuss smart meters more generally, please contact us using the
details set out below.
Our market leading smart metering team is a multi-disciplinary
group that includes partners who are leaders in their fields,
including Robert Lane (Head of Energy and Regulatory), Chris Watson
(Head of Technology, Media & Telecommunications; Competition
and Regulatory), Ian Stevens (ICT and Data Protection) and Joanne
Wheeler (Telecoms and Satellite).
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 01/09/2011.