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United Kingdom-Leeds: IT services: consulting, software development, Internet and support
Voluntary ex ante transparency notice
Section I: Contracting authority/entity
Section II: Object
Application Deployment (Application Development, Application Maintenance)
Application Deployment (ADep) Lot 3 Contract Extension VEAT Replacing VEAT number 20-434825-001 — the Department for Work and Pensions (DWP) has established a comprehensive technology service architecture to support effective delivery to our customers and utilises one of the largest technology estates in Europe.
A key element of the technology estate is the provision of an Application Deployment service which involves the provision of feasibility, prototyping, design, development, integration, build, test, implementation, maintenance and management of applications, provision of technical consulting, support and continuing development and enhancement of application functionality to support evolving business requirements.
The supplier(s) currently provides an Application Deployment service (the ‘ADEP Contract’) to the authority under a contract due to expire on: 22 September 2021
The ADEP Contract was awarded on 23 September 2011 The ADEP Contract provided for a 7-year initial term with a right for the Department to extend for a further period of up to 3 years which was exercised in 2018 and is currently due to expire on 22 September 2021. The ADEP Contract also contains a right for the Department to extend the term of the ADEP Contract for a further period to be agreed by the parties.
This notice confirms that an extension of up to an additional 3 years to 22 September 2024 has become necessary and will be executed to mitigate the high risk of disruption to the critical public services these applications support.
Only four applications will be covered by the ADEP Contract during this extension period. For context, 49 applications will have been exited from the ADEP Contract by the date of the extension due to decommissioning, in-source or replacement by new digital services. These remaining four applications are the Customer Information System (CIS), Provider Referrals and Payments (PRaP), Bank Liaison and Automation and Customer Contact (BLACC) and Fraud Referral and Interventions Management System (FRAIMS).
The ADEP contract comprises a complex technology stack of the legacy applications, with hosted environments, written in outdated software languages. The technology stack is aged and requires significant upgrading that would be extremely difficult without existing knowledge of the solution. Transferring responsibility for managing, supporting and modifying the solution to another supplier would therefore carry a high risk of disruption to service continuity, with elements that another supplier may be unable to support or replicate.
For further context, the service is supports complicated, customised, integrated Applications using a mixture of physical database servers, virtualised and appliance virtual machines on a range of legacy operating systems.These applications have interfaces to various DWP applications, and the solutions of external bodies, either calling data as required, and/or updating data to other applications. Therefore, these legacy applications are fundamental to the critical public services provided by DWP, that UK citizens rely on to gain support to maintain their livelihood.
Therefore, a change of contractor cannot be made due to technical and economic factors and would cause significant inconvenience and substantial duplication of costs for the Department. The extension period is needed to ensure the Department can continue to support live service and provide business continuity for the applications and critical public services whilst supporting the Department to continue its programme of retiring these end of life applications.
— re-procurement of the service: given the scale and complexity of the services in question, the procurement and transition to a new contractor would mean the new service would not be ready until well after the current ADEP Contract expiry date, therefore requiring use of the existing extension options nonetheless. This challenge has also been significantly exacerbated by the Covid pandemic. This approach would result in substantial duplicated costs for the Department compared with its strategy of a ‘wither on the vine’ run down of the legacy service,
— dual transition of the service (transitioning the existing service in-house and then transitioning again to the new digital solution): transitioning the existing service in-house and then again to a new digital solution would result in substantial duplicated costs and inconvenience for the Department.
For these reasons, as explained more fully in Section IV, the Department considers the proposed extension to be justifiable under Regulation 72 of the Public Contracts Regulations 2015, namely Regulation 72(1)(b) and (e)(8).
Section IV: Procedure
This extension is permissible under Regulation 72 of the Public Contracts Regulations 2015, namely Regulation 72(1)(b) and (e)(8).
The extension is necessary because all other options are financially prohibitive and have significant technical restrictions.
A change of contractor cannot be made due to technical and economic factors and would cause significant inconvenience and substantial duplication of costs for the Department. The extension period is needed to ensure the Department can continue to support live service and provide business continuity for the applications whilst supporting the Department to continue its programme of retiring these end of life applications.
There is a complex technology stack and legacy applications in the hosting environments written in outdated software languages. The technology stack is aged and requires significant upgrading that would be extremely difficult without existing knowledge of the solution. Transferring responsibility for managing, supporting and modifying the solution to another supplier would therefore carry a high risk of disruption to service continuity, with elements that another supplier may be unable to support or replicate.
The anticipated value of the contract extension does not exceed 50 % of the value of the original contract. The service is retiring and the contract charges are reducing over the period commensurate with the planned decommissioning of the applications and systems. The estimated values for the extension fall within the parameters of this requirement. Further, the scope of the ADEP Contract over the lifetime has reduced as applications have been decommissioned.
The modifications are not substantial. There are no material changes to the scope of services proposed. The changes proposed are focused on cost reduction and realignment of charging units so the economic balance of the ADEP Contract does not change in favour of the supplier.
Furthermore, this extension avoids the costs associated with a re-procurement exercise and the implementation of a replacement service in respect of the applications which are due to be decommissioned within the period.
The amendments will not be made before the end of a period of at least 10 days from the day after the date of publication of this notice.
Section V: Award of contract/concession
Application Deployment Lot 3 Contract
Section VI: Complementary information
Please note Application Deployment (ADep) Lot 3 Contract Extension VEAT replacing VEAT number 20-434825-001 which was issued in error.