Gigaclear Delays (November 2018)
Q. How long is the delay?
A CDS does not yet know the extent of the delay. This will be part of the details presented in the Remedial Plans at the end of October to CDS for review.
Q. Why has CDS allowed this to happen? When were CDS aware Gigaclear were not delivering the contracts? Why haven’t remedial plans been put in place sooner?
A CDS has been holding Gigaclear to account for the contracted targets and performance required. Gigaclear’s first contracted targets and payment dates needed to be delivered by 30 September 2018. Delays were apparent at the beginning of the year and CDS required Gigaclear to communicate these to the affected communities and provided updates on the programme at this time to stakeholders.
Disappointingly, Gigaclear was not able to recover the situation and what a further review of the programme highlighted were more fundamental issues existed including management of subcontractors, build methodology and capacity within the team.
CDS Board met with the new owners and management team of Gigaclear in September where the gravity of the situation was explained for the first time and we have been working on a resolution position since this time. This work has culminated in the announcement made today.
Q. Why have we not been told about the delay sooner?
A The gravity of the situation was explained for the first time during our CDS Board meeting in September where the new owners of Gigaclear and management team attended. We have been working on a resolution position since this time. This work has culminated in the announcement made today.
Q. What has caused the delay?
A There were significant issues related to ensuring the right number and type of staff were in place. In addition to this, issues related to local roads had more impact than Gigaclear expected. Gigaclear apologise and acknowledge mistakes were made, but with a new owner and management team in place focused on reducing delays and minimising disruption, Gigaclear are committed to effective delivery of the programme.
Q. Is this further delay created by the collapse of Carillion telent?
A No. There have been issues over Gigaclear securing, managing and expediting the right levels of subcontractor resources into the programme. The collapse of Carillion telent did impact the programme earlier in the year, and there were also delays to Gigaclear bringing in a second tier one contractor, McNicholas, due to the acquisition of McNicholas by the Kier Group.
Gigaclear acknowledge these failings, and have new and binding contracts in place with both Kier and telent. Tactical contractors MGM and Avonline have also been deployed on the project.
Q. Why should we believe that the next set of plans from Gigaclear are deliverable given previous remedial plans were not?
A The complexity and challenges of building a new fibre broadband network in rural areas means that issues will be encountered which may result in delays or changes to coverage. There are processes set out in the contracts with Gigaclear on how any changes need to be agreed. CDS in assessing the remedial plans will consider the risks and confidence it can place in the deliverability of a revised deployment plan in each LOT. This will be a key consideration in agreeing a way ahead. Absolute certainty on contractor resource will be one element CDS will be seeking along with improved contractor management, control over the whole build process and increased engagement and communications to communities.
Q. The Gigaclear website no longer has dates on it for the roll out of my area, is this correct and when will revised dates appear?
A This is correct. CDS required Gigaclear to remove any misleading information on their website in light of the announcement made on the delays. Once Remedial Plans are agreed and signed off, new deployment dates will be published on the site, although these will remain as indicative dates.
The contract terms and roll-out:
Q. What remedies are being considered by CDS?
A Gigaclear is considering a different build approach which would potentially accelerate delivery to some communities. At this stage the full extent of the remedies being considered by Gigaclear are not known to CDS.
Q. Will any revised plan lead to premises within the current contracts being removed, either in favour of other eligible premises, or reductions in overall coverage?
A CDS currently do not have the answer to this. CDS has however made Gigaclear aware that it expects the same premise level coverage to be offered in the Remedial Plans.
Q. Do CDS have to accept Gigaclear’s revised plans?
A CDS is under no obligation to accept the Remedial Plans offered by Gigaclear.
Q. If CDS doesn’t like the proposals offered by Gigaclear what are the alternatives?
A Alternative options are being explored whilst we wait for the plans from Gigaclear.
Q. Can CDS choose to end the contract with Gigaclear and seek an alternative provider to come in and deliver more quickly?
A In theory, where we agree we cannot proceed with the contracts held by Gigaclear we can bring these to a close. Where our funders agree we could relaunch a new procurement. This alternative does not necessarily address a quicker deployment being secured or guarantee a new provider can deliver the same levels of coverage.
Q. Can CDS stop some of the contracts and continue with others where the offer is better?
A This may be a possibility and is one of the options that CDS is exploring, although CDS remains committed to delivering superfast broadband across all of Devon and Somerset.
Q. Was your procurement process fit for purpose in allowing Gigaclear to be awarded such a sizeable contract?
A The original procurement process, in full compliance with the Public Contracts Regulations 2015, was fit for purpose and tested the methodology and deliverability of the contract, the financial standing of Gigaclear and tested value for money.
Q. Do CDS have sufficient skill and capacity to handle a project and contracts of this size?
A The CDS team have a broad range of contract management skills and experience of managing capital programmes. This is supplemented by external advisors on technical assurance, procurement and legal issues.
Implications for communities
Q. When will we know what has been decided and how will we told of the decision?
A CDS will not unduly delay making a decision on the way forward. CDS are however committed to making sure that the right decision is taken and the best outcome for communities is achieved. Any decision needs to be taken in conjunction with our main funders. Updates and a final announcement will be communicated to elected members and through the CDS website. Thereafter, there will be ongoing communications with the communities to update them once a recovery plan has been prepared and agreed. This will be additionally resourced by new community liaison staff employed by Gigaclear.
Q. Will a full fibre solution still be offered?
A This is yet to be determined. Solutions provided by Gigaclear need to Next Generation Access and deliver a minimum of 30 Mbps download. CDS has made Gigaclear aware it expects a full fibre solution to be maintained in the Remedial Plans.
Q. How can I get accelerated delivery?
A Given the current situation accelerated delivery is unlikely where a solution to your property was being offered under the Gigaclear contracts. Until the Remedial Plans are finalised and agreed CDS does not know the intended roll out plans and schedules.
Q. My property is not included in the current delayed programme; can I be included under the revised plans?
A CDS expects that the same coverage will be maintained in the Remedial Plans. There may be additional premises offered in time as detailed designs are finalised, however at this stage there is no certainty that the contracts will continue, or what opportunities there may be to add in additional premises and coverage. Gigaclear are keen to add in additional premises where it can.
Q. Will the retail packages offered to me still be the same?
A We do not expect any changes to the wholesale services offered by Gigaclear where these contracts continue and therefore the ability for retailers to offer products and broadband packages would not be impacted.
Q. Will I be able to claim a CDS voucher or a Gigabit voucher while I wait for delivery of connections?
A This is under consideration by the CDS Board as part of the way ahead decision.
Q. What about the other programmes such as Community Hubs and a proposed Challenge Fund? Will it impact those?
A There is provision in the five contracts held by Gigaclear to develop at least one community hub solution. Once a way ahead has been agreed and the contracts continue this requirement will be expected to be delivered. Separately, the programme is piloting a community challenge scheme, and once the outcomes from these pilots is assessed it is hoped a Challenge Fund will be launched. This is not dependent on the way forward for the Gigaclear contracts.
Q. Can I be de-scoped and benefit from a different solution?
A At this stage we do not believe there will be any change to the intended coverage presented by Gigaclear in the Remedial Plans. Until we have an agreed position it is not possible to confirm the contracts will proceed or any changes to premises planned to be delivered to.
Q. Can I have funding awarded to Gigaclear to support a community fibre partnership approach instead?
A Any public investment that is contracted with Gigaclear remains within the contracts and cannot be withdrawn and offered to support a community solution. Where a decision is taken to proceed with the Gigaclear contracts, there is a requirement for Gigaclear to work with at least one community to develop a ‘Community Hub’. This requirement will remain. CDS is also considering launching a Community Challenge Fund, which may support communities develop their own solutions, where they are not within a publicly subsidised programme.
Q. I am in Northern Devon and Airband are delivering to my area, is there any impact on this contract?
A No there is no impact on the Airband contract.
Q. How can I find out answers about my community?
A The best way is to contact the CDS team on firstname.lastname@example.org
Q. What are Gigaclear doing to engage with Parish Councils?
A We will be contacting Parish Councils now to clarify the impact of these delays. Thereafter, there will be ongoing communications with the communities to update them once a recovery plan has been prepared and agreed. This will be additionally resourced by new community liaison staff employed by Gigaclear.
Implications for Gigaclear
Q. Have you put them into breach, if not why not?
A In three of the contracts – LOT1, LOT2 and LOT5 Gigaclear has not achieved its targets required for the 30th September. CDS has written to Gigaclear and confirmed that it is in default for these three contracts but has not formally issued a default notice. CDS is reserving its position to do so and can consider this after the Remedial Plans have been presented.
Q. What penalties can be applied for these delays?
A The CDS contract does not include any financial penalties for the delays. Equally no funding is provided to Gigaclear until such time as the milestones have been met. The contracts provide for default notices to be issued and options to close the contracts. These are alternatives being considered by CDS as part of making a decision on the way forward.
Q. Are other Gigaclear programmes in delay, or is this unique to the CDS area?
A Gigaclear is having delivery challenges in a number of other areas, however none of the other areas are subject to the delays which the CDS programme has experienced. All of their resources are currently prioritised to re-energise and accelerate the programme and they will continue to look to deploy lessons learnt from the CDS rollout across the other delivery programmes for Gigaclear.
Q. How come Gigaclear keep winning awards but seem to be performing so badly in the CDS area – what are CDS doing that is making it difficult for Gigaclear?
A We do not believe that there is anything different about the approach that CDS takes in managing its contracts than in other areas. Certainly the size and scale of the contracts for our region are much larger than those held by Gigaclear in other locations in the UK. The ability to attract civil capability into the South West has been cited as a challenge which has had some bearing on the deployment of the new network and the delays we are now experiencing. Gigaclear have indicated that the review and revised plans they are presenting to CDS will form a blue print for future contracts and ways of working with other local bodies.
Q. How many people have connected to Gigaclear networks across the country?
A Gigaclear currently have 16000 customers connected.
Q. What extra costs will this mean for the programme and who pays for this?
A Any overspend is the contractors responsibility. The contracts have been awarded under what is known as a gap-funded model. This limits the public subsidy to the amount offered under the contract and cannot be increased. Any cost over runs on the programme are borne by the contractor, in this case Gigaclear. There are options for CDS to increase the available subsidy however this would be expected to increase coverage and be matched by the contractor’s own investment. Any additional funding would not be used to support any overspend.
Q. What happens if the funding awarded to CDS cannot be spent in time?
A The public funding for the CDS programme comes from a variety of sources. Each has specific timescales and conditions applied to it. The key funding sources are from BDUK, EU funding through Ministry of Housing, Communities and Local Government and the Heart of the South West Local Enterprise Partnership. Conversations are ongoing with these partners to identify the flexibility to extend these timescales, should this be required in order to accept the proposals within the Remedial Plans from Gigaclear.
Q. Can Gigaclear still put in their money to these contracts?
A Yes. CDS has met with representatives from the new owners of Gigaclear, Infracapital, and has had every reassurance that they are prepared to put in the required funding to deliver these contracts.
Q. Are there grounds for a viable legal challenge from businesses who may suffer from this delay? Could compensation be paid?
A CDS is not in a position to advise on this issue, except to confirm that there are no terms in the contract between CDS and Gigaclear that cover this. Businesses should take their own advice on this subject.
Q. Is Gigaclear in financial difficulty?
A No. CDS has been assured by Infracapital the owners of Gigaclear that they remain committed to deliver the five contracts and can provide the available funding needed to achieve this.