Services - 428801-2020

11/09/2020    S177

United Kingdom-Leeds: IT services: consulting, software development, Internet and support

2020/S 177-428801

Voluntary ex ante transparency notice

Services

Legal Basis:
Directive 2014/24/EU

Section I: Contracting authority/entity

I.1)Name and addresses
Official name: Department for Work and Pensions
Postal address: Quarry House, Quarry Hill
Town: Leeds
NUTS code: UKD42 Blackpool
Postal code: LS2 &UA
Country: United Kingdom
Contact person: Stephanie Howe
E-mail: STEPHANIE.HOWE@DWP.GOV.UK
Telephone: +44 1132327010
Internet address(es):
Main address: https://www.gov.uk/government/organisations/department-for-work-pensions
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
Social protection

Section II: Object

II.1)Scope of the procurement
II.1.1)Title:

Application Deployment (Application Development, Application Maintenance)

II.1.2)Main CPV code
72000000 IT services: consulting, software development, Internet and support
II.1.3)Type of contract
Services
II.1.4)Short description:

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

II.1.6)Information about lots
This contract is divided into lots: no
II.1.7)Total value of the procurement (excluding VAT)
Value excluding VAT: 25 250 000.00 GBP
II.2)Description
II.2.3)Place of performance
NUTS code: UK UNITED KINGDOM
II.2.4)Description of the procurement:

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.

Options considered:

— 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).

II.2.5)Award criteria
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
II.2.14)Additional information

Section IV: Procedure

IV.1)Description
IV.1.1)Type of procedure
Award of a contract without prior publication of a call for competition in the Official Journal of the European Union in the cases listed below
  • The procurement falls outside the scope of application of the directive
Explanation:

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.

IV.1.3)Information about framework agreement
IV.1.8)Information about the Government Procurement Agreement (GPA)
The procurement is covered by the Government Procurement Agreement: yes
IV.2)Administrative information

Section V: Award of contract/concession

Title:

Application Deployment Lot 3 Contract

V.2)Award of contract/concession
V.2.1)Date of contract award decision:
23/09/2011
V.2.2)Information about tenders
The contract has been awarded to a group of economic operators: no
V.2.3)Name and address of the contractor/concessionaire
Official name: IBM UK Ltd
National registration number: 00741598
Postal address: PO Box 41, North Harbour
Town: Portsmouth
NUTS code: UK UNITED KINGDOM
Postal code: PO6 3AU
Country: United Kingdom
The contractor/concessionaire will be an SME: no
V.2.4)Information on value of the contract/lot/concession (excluding VAT)
Total value of the contract/lot/concession: 25 250 000.00 GBP
V.2.5)Information about subcontracting
The contract/lot/concession is likely to be subcontracted

Section VI: Complementary information

VI.3)Additional information:

Please note Application Deployment (ADep) Lot 3 Contract Extension VEAT replacing VEAT number 20-434825-001 which was issued in error.

VI.4)Procedures for review
VI.4.1)Review body
Official name: Royal Courts of Justice
Postal address: Strand
Town: London
Country: United Kingdom
VI.5)Date of dispatch of this notice:
08/09/2020