The ADEP Contract was awarded on 2 November 2011. The 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. The option to extend was exercised in 2018 and is currently due to expire on 1 November 2021. The ADEP contract also contain a right for the Department to extend the term of the contract for a further period to be agreed by the parties or in absence of agreement, for a period of 12 months.
This notice confirms that an extension of up to an additional 3 years to 1 November 2024 has become necessary and has been executed to mitigate the high risk of disruption to the critical public services these applications support.
There is a complex technology stack and legacy applications in the hosting environments written in outdated software languages. Transferring responsibility for managing, supporting and modifying the solution to another supplier would therefore carry a high risk of disruption to service continuity, e.g., the application PTP CAM is a customised Siebel CRM application, providing customer account management with integrated telephony across Pension Centres and other departmental offices. It presents processing agents with a customer record based on NINO search allowing capture and update of information provided via phone or by post. The application has interfaces to various DWP applications either calling data as required and/or updating data to other applications. Therefore, it is a critical application to capture Pension customer’s data and enabling accurate processing of these customer Pension applications.
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 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 again to the new 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.
The above options also carry a high risk of disruption to the critical applications and services that UK citizens rely on to maintain their livelihood. The Department's strategy will operate and complete the retiring of these applications over the extension period.
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 modifications are not substantial. There are no material changes to the scope of services proposed. The changes proposed focus on cost reduction and realignment of charging units so the economic balance of the ADEP Contract does not change in favour of the supplier.
The scope of the contract has reduced as applications have been decommissioned or brought in house.
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).
