Public procurement notice: Voluntary Ex Ante Transparency Notice
Published: 2018-06-05
Buyer: Department for Work and Pensions
Country: UK
Contract type: Services
Procedure: Contract award without prior publication
CPV classification: 72223000: Information technology requirements review services
Estimated value: 89250000 GBP

Technical requirements: The Supplier currently provides managed IT services to the Authority under a contract due to expire on 28.2.2020 (the Medical services IT Contract and alternatively, the Contract). The Contract supports the Authority’s separate contract for health and disability assessment services (the HDAS Contract) for a range of Social security benefits (including employment and support allowance, Universal Credit and other benefits).
The Contract was awarded on 9.6.2014 without prior publication of a contract notice following the publication of a voluntary transparency notice on 24.4.2014 which was due to the then ongoing procurement of the HDAS Contract for which the Authority was seeking a new assessment services provider. The technical requirements of the IT services to support the HDAS Contract meant that another supplier would not have been able to build, test and deliver new IT services in time for the HDAS Contract without there being an unacceptable level of service transition and delivery risk failure that could have prevented the Authority complying with its statutory duties or cause market failure in the procurement of the new assessment services provider.
The Authority is now planning to transition the IT services under the Contract to a successor IT system. Whilst the Authority is actively taking steps to transition to a successor IT system, it is required to modify the Contract to:
a) to implement additional upgrade projects which are necessary to safeguard the stability of the underlying systems and infrastructure that enable the provision of the IT services during the contract term (the Additional projects) in order to safeguard the continued delivery of the IT services and support the planning for the transitioning of the current IT services to a successor IT system; and
b) include a unilateral option to extend the Contract by up to 2 further 1 year extensions (the final extension, if exercised, to expire on 28.2.2022) (the Optional extension rights) in order to safeguard the continued delivery of the IT services and support the transitioning of the current IT services to a successor IT system.
The Additional projects and Optional extension rights (together the Proposed amendments) are necessary to minimise the otherwise unacceptable level of risks of service transition and delivery failure of the Contract which are critical to the administration of the HDAS Contract and the Authority’s compliance with its statutory duties in relation to the administration of benefits under the HDAS Contract.
For the reasons set out below in Annex D1, the Authority considers the Proposed amendments are permitted under the Public Contracts Regulations 2015 (as amended) (the PCR) and in accordance with Regulation 99(3) of the PCR, the Authority is publishing this voluntary transparency notice. The Proposed amendments will not be made before the end of a period of at least 10 days beginning with the day after the date of publication of this notice.
The initial value of the Contract in year 1 was estimated to be approximately 10 000 000 GBP plus any additional costs of change (i.e. the actual year 1 costs). The value of the Contract in subsequent years was to be determined based on the actual year 1 costs. The overall value of the Contract consisting of the original Contract term, the Additional Projects and the Optional extension rights is estimated to be 89 250 000 GBP. The increase in price arising out of the Optional extension rights does not exceed 50 % of the value of the original Contract.
Regulation 72(1)(b): The Optional extension rights have become necessary for the reasons set out in II.2.4) above. A change of supplier:
(i) cannot be made for technical reasons due to the complexity of the legacy IT systems and knowledge and expertise of the Supplier required to manage the IT services. The technical requirements include hardware, software (including historical applications no longer available to purchase) and premises and mean that another supplier would neither be able to replicate the current services nor support the transitioning of the current IT services to a successor IT system; and
(ii) would cause significant delays to allow for delivering new IT services and substantial duplication of costs for the Authority as the managed IT services would be required to be replicated to the extent possible by a new supplier to support the transitioning to a successor IT system.
The increase in price arising out of the Optional extension rights does not exceed 50 % of the value of the original Contract.
Regulation 72(1)(e): In the alternative, the modification of the Contract for the Additional projects is not substantial within the meaning of Regulation 72(8) as the Additional projects do not render the Contract materially different in character from the one initially concluded, the modification does not change the economic balance of the Contract in favour of the Supplier in a manner which was not provided for in the original Contract and the modification does not extend the scope of the Contract considerably as the Additional projects fall within the scope of services previously provided by the supplier.
Regulation 32(2)(b): In the alternative, the delivery of the managed IT services, including the Proposed amendments under the Contract, can be supplied only by the supplier for technical reasons due to the complexity of the legacy IT systems and knowledge and expertise of the supplier required to manage the IT services. In short, competition is absent for technical reasons. The technical requirements include hardware, software (including historical applications no longer available to purchase) and premises and mean that another supplier would neither be able to replicate the current services nor support transitioning to a successor IT system. Due to the complexity of the legacy IT systems, no reasonable alternative/substitute supplier exists.


Winner: Atos IT Services UK Limited
Award value: 89250000