The Commercial Case

Overview

The Commercial Case sets out how the preferred metering solution will be procured, contracted, and delivered in a way that is both commercially sound and attractive to the market. It ensures the delivery model balances competitive tension with risk management, provides confidence to suppliers, and delivers long-term value for the organisation and its customers.

Procurement Strategy

A well-structured procurement strategy underpins the success of any universal metering programme. It helps to ensure the chosen solution is commercially sound, technically proven, and delivers long-term value for money. For large-scale rollouts, an open and transparent market process remains the most effective way to test technology maturity, supplier capability and dependability, and capacity.

A staged procurement approach, typically progressing from Market Sounding to Registration of Interest (ROI) and then to Request for Proposal [JF3] [MC4] (RFP), allows providers to give clear signalling to the market, refine requirements, shortlist credible suppliers and contractors, and rigorously evaluate solutions before contract award. This process builds confidence in both the commercial and technical foundations of the programme and provides traceable assurance to elected members and auditors [JF5] that due process has been followed.

The procurement strategy should reflect each provider’s context, capability, and long-term service objectives. [JF6] Many factors influence the approach and the balance between in-house and externally procured delivery.[JF7] 

Understanding your context

• • Scale and Readiness - The size of the rollout, existing meter coverage, and presence of meter-ready connections will determine whether a single supplier or a phased, multi-contract model is most efficient[JF8] . Smaller councils may benefit from shared procurement to achieve economies of scale, [JF9] while larger networks might pursue framework agreements to manage complexity.

  • Partnership and Collaboration Opportunities - Regional or joint procurement can strengthen bargaining power and achieve economies of scale, achieve consistent technical standards, and streamline data integration—particularly where councils expect future aggregation under shared service models.

  • Internal Capability and Resilience – Councils should assess their capacity to manage procurement, implementation, and ongoing operations. Some functions, like customer engagement or data validation, may remain in-house, while others—such as meter supply, AMI operation, or field services—are better outsourced. The goal is a delivery model that’s reliable and sustainable without overstretching internal resources.[JF10] 

Market Offering

• • Market Depth and Service Availability - Understanding supplier capability and technology maturity is essential. Early market sounding helps test interoperability, delivery capacity, and innovation potential. Councils should guard against locking into proprietary systems that limit future flexibility, instead favouring open standards and modular solutions where possible.

  • Supply Chain and Delivery Logistics - Global supply constraints and limited installation capacity can affect timing. Strategies may include advance purchasing of long-lead components, staged rollouts, or framework agreements that allow supplier substitution or scaling if delays arise.

Compliance and risk

• • Regulatory and Governance Frameworks - Procurement must comply with the Government Procurement Rules [JF11] and align with council probity and audit requirements. Upcoming economic regulation and information disclosure frameworks under the Local Water Done Well reforms may require flexibility in contracts to accommodate new reporting or performance obligations.

  • Risk Allocation - Risk should sit with the party best placed to manage it. Over-transferring risk to suppliers inflates bid prices, while retaining too much risk exposes councils to delivery, operational or financial shocks - particularly so with the immediacy in relation to customer impacts that characterises metering projects. Key risk areas include meter accuracy, data integrity, cybersecurity, and continuity of service. Clear risk allocation and monitoring frameworks build trust and accountability.

Funding and long-term sustainability

• • Funding and Affordability - How the programme is financed, whether it be through capital budgets, loans, or service models, directly affects contract structure. Options range from traditional capital procurement to long-term “metering-as-a-service” models that draw on operational funding. Early financial modelling should consider life-cycle costs and ensure affordability across both installation and long-term operations.

  • Sustainability and Whole-of-Life Value - Sustainability is now a core element of value for money. Councils should consider meter material choices, recyclability, battery life, embodied carbon, and end-of-life recovery. Service models should support upgrades and component reuse rather than full replacement.

The optimal procurement strategy will likely blend in-house functions with contracted delivery and service components. [JF12] What matters most is securing a stable, reliable service model that balances risk appropriately to ensure reliable, on-going technical performance, acceptable levels of service, commercial sustainability, and organisational resilience.

By tailoring the approach to local context, while maintaining transparency, competitiveness, and a clear line of sight to long-term outcomes, councils can confidently deliver universal metering programmes that provide enduring value for communities.

Procurement model

The procurement model should align with the complexity of the rollout. Councils may bundle related activities such as meter supply, installation, and data management into integrated packages or use separate contracts to manage risk and maintain flexibility.

Delivering a successful metering project requires a multi-disciplinary team with a diverse mix of skills, such as:

• • Project and logistics management

  • Communications and engagement

  • Technical engineering

  • Civil construction and field installation

  • Product supply, device and data management deployment and setup

  • Digital communications and software [JF13] integration

  • Finance and billing configuration and management

  • Customer service and account management

Due to the large array of skills required, the procurement model for the meter project will require careful structuring. Related or complementary skill sets will likely be bundled into separate contracts to ensure efficiency and clarity of responsibility.  [JF14] 

For example, one package could cover civil construction and field installation, while another could encompass smart meter supply, communications infrastructure, and data management system setup.  This approach enables access to specialist expertise while maintaining control of key interfaces.

If elements such as communications infrastructure or data management platforms are delivered by separate providers, it is essential to establish clear SLAs and performance measures covering data quality, uptime, and maintenance responsibilities.

A single end-to-end contract may be preferred, where one lead supplier is responsible for the full rollout, from meter supply and installation through to communications, data integration, and customer systems. This can simplify coordination and reduce integration risks but also increases reliance on a single vendor and may limit flexibility for future changes.[JF15] 

The final procurement structure would likely be informed by the outcomes of market sounding, which would clarify supplier capabilities, delivery models, and the most commercially and technically viable configuration.

Pilot and Staged Rollout Options

A pilot or staged rollout lets councils prove their metering approach in the real world before scaling up. It validates technology, installation methods, data integration, and customer communication under controlled conditions — avoiding costly rework later.

Pilot rollout: Typically, 500–2,000 meters [JF20] are installed in representative zones to verify installation techniques, network connectivity, data quality, and customer messaging. A good pilot exposes issues early and fine-tunes processes before full deployment.

Staged rollout: Applies the same discipline across the full network in planned phases. Early stages target areas with high demand, easier installs, or strong communications coverage; later stages incorporate lessons learned to boost efficiency, manage supply-chain and workforce constraints, and smooth funding requirements.

Key Considerations:

• • Ensure clear governance and feedback loops so pilot results directly inform the full rollout.

  • Establish metrics to assess performance early and ensure they are properly monitored — e.g. installation productivity, connectivity success rate, customer satisfaction, and data accuracy.

  • Select pilot areas that reflect a range of property densities, terrain, and network configurations.

  • Standardise installation and commissioning procedures to ensure learnings are transferable.

  • Retain flexibility to adjust technology configuration or supplier processes between stages.

  • Ensure clear governance and feedback loops so pilot results directly inform the full rollout.

By combining targeted testing with progressive scaling, a pilot or staged rollout builds confidence, improves delivery quality, and ensures a smoother transition to universal metering.

In Summary

By addressing the elements described above early, the Commercial Case provides a clear roadmap for engaging the market, structuring contracts, and managing delivery risk — turning a sound investment plan into a commercially viable, deliverable metering programme.

Alternative Procurement models

Alternative procurement models can also be considered, each offering distinct advantages depending on project complexity, market maturity, and the desired balance of control, flexibility, and risk.

• • Early Contractor Involvement (ECI) - ECI brings key suppliers or integrators into the project early to help shape design, staging, and risk management before full tender or contract award. It enables practical delivery input and helps de-risk complex installations, such as smart metering network integration. ECI is particularly effective when project scope is evolving and early market insight adds value. It can also stimulate innovation if run effectively.

  • Turnkey (Design–Build) Delivery - A turnkey or design–build approach engages a single supplier or consortium to design, supply, install, and commission the complete metering system. [JF16] It provides clear accountability, streamlined delivery, and strong integration between technology and installation. However, it offers less flexibility once contracted and relies on rigorous upfront due diligence to ensure value for money.

  • Metering-as-a-Service (MaaS) and Data-as-a-Service (DaaS) - Service-based models shift the focus from asset ownership to purchasing outcomes such as accurate reads, reliable data, and system uptime. The provider installs, operates, and maintains the metering infrastructure and associated data platforms, while the council pays an ongoing service fee. These models can lower upfront capital costs and transfer performance and technology risks to the supplier, but require long-term financial planning, clear service level agreements, and strong data governance to protect customer interests and ensure continuity of service.

Each model offers a different balance of control, risk, flexibility, and cost, and can be tailored or combined to suit the council’s scale, capability, and long-term objectives.[JF17] 

The Other Business Cases