Contract award notice
Results of the procurement procedure
Section I: Contracting
authority
I.1) Name and addresses
Department for Work and Pensions
Hartshead Square
Sheffield
S1 2FD
UK
Telephone: +44 1142590207
E-mail: LUCY.WATERFALL@DWP.GSI.GOV.UK
NUTS: UK
Internet address(es)
Main address: https://www.gov.uk/government/organisations/department-for-work-pensions
I.2) Joint procurement
The contract is awarded by a central purchasing body
I.4) Type of the contracting authority
Ministry or any other national or federal authority, including their regional or local subdivisions
I.5) Main activity
Health
Section II: Object
II.1) Scope of the procurement
II.1.1) Title
Personal Independence Payments (PIP) Assessment Service — Contract Extension — Lot 3
II.1.2) Main CPV code
85000000
II.1.3) Type of contract
Services
II.1.4) Short description
DWP intends to negotiate extensions to the Personal Independence Payment (PIP) Assessment Services Lots 1, 2 and 3 Contracts (the Contracts) with the incumbent suppliers. The proposed extensions will each have a term of approximately 2 years. This notice refers to Lot 3 only. Separate notices are published for Lot 1 (2018/S 108-247009) and Lot 2 (2018/S 108-24708). Contracts were awarded pursuant to the Health and Disability Assessment Services Framework Agreement (referenced DWP_100255) which commenced in 2012 and expired in 2016. The Framework Agreement was procured pursuant to the Public Contracts Regulations 2006 as a Part B service. Each Contract has a term of 5+1+1 years and is due to expire on 31.7.2019. The Contracts relate to the provision of “social and other specific services” within the meaning of Schedule 3 of the Public Contracts Regulations 2015 (SI 2015/102) (PCR) and are critical to the provision of statutory “PIP” welfare benefits.
II.1.6) Information about lots
This contract is divided into lots:
Yes
II.1.7) Total value of the procurement
Value excluding VAT:
183 894 556.99
GBP
II.2) Description
Lot No: 3
II.2.2) Additional CPV code(s)
85000000
II.2.3) Place of performance
NUTS code:
UK
II.2.4) Description of the procurement
DWP are constantly looking at ways to continually to improve the PIP service. In response to Paul Gray’s Second Independent Review and the recent Work and Pensions Select Committee Report we outlined numerous further improvements to the PIP service. This included numerous measures to improve the clarity of our communications products and increasing the level of clinical coaching, feedback and support available to each assessor.
A key part of our efforts to improve the assessment process will be making video recording of the PIP assessment a standard part of the process. We will be piloting videoing the assessment with a view to then roll this out across Great Britain.
There have been improvements in the overall quality of assessments since 2015 but there is still more to do to deliver the high quality of service those claiming PIP rightly expect. DWP will continue to work closely with stakeholder groups and our Assessment Providers to improve the quality of claimant communications, assessments, decision making and the overall claimant experience.
It is vital for claimants that we continue to have a stable service. DWP considers it important to continue to make improvements to the end-to-end PIP service, including in response to recommendations from independent reviews. A stable PIP assessment service is vital in order to deliver improvements to the overall service.
DWP had originally intended to publish a contract notice in the Official Journal of the European Union (OJEU) in Spring 2018 for a re-procurement of the Contracts in accordance with Section 7 of the PCR. That timeline included a 6 month transition window prior to envisaged full service commencement on 1.8.2019.
DWP has undertaken an extensive process of pre-market engagement and feasibility analysis (PME), including a number of supplier engagement events. Based on this PME, DWP has concluded that the IT and estate infrastructure needed to support the envisaged new contracts present substantial challenges to new market entrants. These challenges are compounded in the context of a six month transition period, which DWP considers poses an unacceptable risk. DWP therefore considers it necessary to explore options to extend the Contracts for approximately 2 years in order to:
(i) provide sufficient time for a safe and stable transition of these complex and vitally important services, which support delivery of statutory welfare benefits to hundreds of thousands of vulnerable claimants each year and
(ii) allow DWP to develop, build, test and implement an IT solution to support the new contract(s).
Given that PIP is a critical statutory welfare benefit that caters for vulnerable people, a gap in service provision is not an option.
DWP will continue to implement steps to secure further efficiencies and service improvements in the way that the existing Contracts are currently delivered and will monitor performance through this interim stage in order to demonstrate value for money.
DWP intends to continue engaging with the market to discuss the future transition of the PIP assessment service and the future of health assessments more broadly. If you would like to participate in our market engagement process please contact cathy.bishop@dwp.gsi.gov.uk
For the reasons set out below in Annex D1, DWP considers the proposed extensions are permitted in accordance with the PCR.
II.2.5) Award criteria
Price
II.2.11) Information about options
Options:
No
II.2.13) Information about European Union funds
The procurement is related to a project and/or programme financed by European Union funds:
No
Section IV: Procedure
IV.1) Description
IV.1.1) Type of procedure
Award of a contract without prior publication of a call for competition
Justification for selected award procedure:
The procurement falls outside the scope of application of the Directive
Explanation
Regulation 72(1)(b) PCR: For the reasons set out in II.2.4 above, the provision of additional services over a period of approximately 2 years has become necessary and a change of provider from 1.8.2019:
(i) cannot be made for economic and technical reasons due to the complexity of the transitional arrangements and the need to safeguard continued service delivery which is vital to the ongoing administration of the PIP welfare benefit – a 6 month transition period poses an unacceptable and unjustifiable risk to DWP of service failure; and
(ii) would cause significant inconvenience and substantial duplication of costs for DWP in terms of the likely service failure resulting from any premature transition of the services.
DWP further considers the proposed extensions to be lawfully permitted in accordance with Regulation 72(1)(c) of PCR on the basis that:
(i) the need for the extensions (and the risk of service failure should DWP proceed with a 6 month transition period) has fully crystallised following the PME exercise; and
(ii) the services to be provided by the incumbents will remain consistent and there will be no alteration to the overall nature of the Contracts.
The price to be paid for the extended period of each Contract will not exceed 50 % of the original value of each applicable seven year Contract. DWP will publish a Modification Notice following conclusion of each Contract extension pursuant to Regulation 72(3) of PCR.
In the alternative, DWP considers that it is entitled to use the negotiated procedure without prior publication in accordance with Regulation 32(2)(b)(ii) of the PCR in these circumstances. Given the scale and complexity of the services, including the nature of the supporting IT and estates, only the incumbent providers are technically able to deliver the services during the proposed extension period. In the absence of a DWP provided PIP IT solution and / or a longer transition period (both of which can only be facilitated by the proposed Contract extensions) no reasonable alternative or substitute exists.
IV.1.8) Information about Government Procurement Agreement (GPA)
The procurement is covered by the Government Procurement Agreement:
Yes
Section V: Award of contract
A contract/lot is awarded:
Yes
V.2 Award of contract
V.2.1) Date of conclusion of the contract
19/07/2012
V.2.2) Information about tenders
Number of tenders received: 1
The contract has been awarded to a group of economic operators:
No
V.2.3) Name and address of the contractor
Atos IT Services UK Ltd
1245534
Second Floor, MidCity Place
London
SW1H 0HA
UK
NUTS: UK
The contractor is an SME:
No
V.2.4) Information on value of the contract/lot (excluding VAT)
Total value of the contract/lot:
: 183 894 556.99
GBP
V.2.5) Information about subcontracting
Section VI: Complementary information
VI.4) Procedures for review
VI.4.1) Review body
Department for Work and Pensions
Sheffield
UK
VI.5) Date of dispatch of this notice
22/06/2018