Public procurement notice: Voluntary Ex Ante Transparency Notice
Published: 2019-08-06
Buyer: Department for Work and Pensions
Country: UK
Contract type: Services
Procedure: Contract award without prior publication
CPV classification: 85000000
Estimated value: 227000000 GBP

Technical requirements: The contract relates to the provision of 'social and other specific services' within the meaning of Schedule 3 of the Public Contracts Regulations 2015 (PCR) and is critical to the provision of statutory ‘ESA’ and Universal credit welfare and other benefits. DWP intends to enter into a variation of the contract for HDAS (the contract variation) with the incumbent supplier following a minimum period of 10 calendar days from the date of publication of this voluntary notice. The contract variation provides for an extension of the contract for a period of 17 months.
On 2.4.14 DWP advertised the contract in the Official Journal of the European Union (OJEU) (reference 2014/S 065-111189) for an initial period of 3 years with an option to extend for a further 2 years. The service delivery commenced on 1.3.15 and DWP exercised its option to extend by 2 years, with the variation being signed on 22.9.2017 and due to expire on 29.2.2020. The expiry of this further contract variation will be 31.7.21
The current contract with the contractor expires on 29.2.2020. DWP originally intended to re-procure the contract by publishing a contract notice in the OJEU in October 2018. However, following the formation of DWP's Health Transformation Programme (HTP), whose remit and vision is to transform the delivery of functional assessment services, the previous procurement strategy was re-evaluated and updated to deliver the HTP strategy.
The task of HTP is to transition the currently separate Work Capability Assessments (WCA) for Employment Support Allowance, Universal Credit and other benefits delivered under the contract and the Personal Independence Payments (PIP) assessment services, which are delivered under separate contracts, into one unified, integrated assessment service from August 2021.
To enable an integrated service, DWP is seeking to extend the contract, which includes the delivery of WCA for 17 months, to align it with the HTP vision and the duration of the extended PIP contracts to July 2021. An integrated approach will allow for a more joined up claimant experience across these benefits which takes account of multiple interactions an individual may have with DWP and will also allow for a safe and stable service now, and as DWP transitions to the new integrated service. A stable WCA assessment service is vital to the delivery of statutory benefits and improvements to the overall service and the HTP vision.
In addition, DWP is constantly looking at ways to continuously improve the services and quality of assessments under the contract. In order to effect continuous improvement, DWP is introducing an updated charging mechanism (via ‘Additional Services’ contemplated and catered for under the original contract and therefore not subject to this voluntary notice). The updated charging mechanism for the additional services replaces the previous rate card mechanism. The additional services are likely to be used for one-off time limited initiatives to improve the authority’s continuous improvement agenda covered by the original scope of the contract. Digital delivery of training for newly recruited healthcare professionals, increased performance measures and other measures to achieve financial savings are separate from the additional services and are other elements of continuous improvement which DWP will continue to pursue under the contract.
DWP also intends to continue engaging with the market to discuss the future transition of the contract and the future of functional assessment services more broadly. If you would like to participate in our market engagement process please contact integratedhealth.assessmentservices@dwp.gov.uk
For the avoidance of doubt, the contracts finder notice UI_DWP_101014 described the value of the contract as 595 000 000 GBP which related to the first 42 months of the contract only. The aggregate value of the contract of 981 000 000 GBP is the value of the contract including:
(i) the first extension period of 2 years which was originally contemplated by the contract and published in the contracts finder notice UI_DWP_101014 and which will expire on 29.2.2020; and
Regulation 72(1)(b) PCR: for the reasons set out in II.2.4) above, an extension for a period of 17 months has become necessary and a change of provider from March 2020 to July 2021:
(i) cannot be made for economic and technical reasons due to the complexity and substantial duplication of costs and resources involved in transitioning to an interim provider in order to deliver HDAS for a period of 17 months, combined with the overriding need to safeguard continued service delivery to claimants which is vital to the ongoing administration of the ESA, Universal Credit and other welfare benefits during this period. Furthermore, DWP's aims and objectives during that 17 month period is to begin the process of transitioning the delivery of the assessment service as a whole through the implementation of a single, unified digital platform from August 2021. From a technical perspective, the risk of interruption to any existing services, arising from a potential transition to an interim contractor whilst this digital platform is being developed, followed by a further potential transition to any integrated service provider, is materially higher than would be the case where there is az planned and mitigated transition, in 2021, from HDAS, to any newly integrated assessment service provider or providers; and
(ii) would cause significant inconvenience and substantial duplication of costs for DWP, both in terms of any material interruption to the services in securing an interim supplier and furthermore, from the duplication of supplier transitional and procurement costs, that will arise from a change of supplier for a 17 month period, followed by the costs of securing a long term partner for the unified service (a process which DWP in any event intends to commence during the period of the current contract extension). With a view to keeping the market abreast of its longer term objectives, DWP issued a prior information notice in March 2019 (https://ted.europa.eu/TED/notice/udl?uri=TED:NOTICE:112501-2019:TEXT:EN:HTML). A bidder open day in relation to the wider contract opportunity was held on 17.7.2019 (details of which are provided for within the PIN).
The price to be paid for the contract variation does not exceed 50 % of the original value of the contract. DWP will publish a Modification Notice pursuant to Regulation 72(3) of PCR.
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Winner: Maximus Health and Human Services Limited, subsequently novated to The Centre for Health and Disability Assessments Ltd
Award value: 227000000