Select Committee on Work and Pensions Written Evidence

Supplementary memorandum submitted by DWP (SC 04C)



  1.  The Department for Work and Pensions uses a range of contractual vehicles to meet its requirements for new IS/IT work, choosing the most appropriate contracts depending on the specific requirements. For existing business requirements, including the development and delivery of IT operational services, the main contractual vehicles are those let as PFI arrangements by the former Department for Social Security (DSS) and the Employment Service (ES) (ACCORD and ITPA respectively). The following paragraphs (2-13) describe these arrangements in more detail. The Department also has access to other Office of Government Commerce agreements and the Inland Revenue's E-IROS Agreement which are used in some circumstances to meet IS/IT requirements which are better met through non-PFI arrangements.


  2.  In 1996 the DSS initiated a Change Programme to streamline and improve Departmental business. An IS/IT Strategy was developed to enable the fundamental business process re-engineering required under the Change Programme and the ACCORD (ACcess to CORporate Data) Project was established to put in place a PFI compliant delivery vehicle for the necessary new IT. PFI was the accepted Government procurement vehicle at this time.

  3.  Under ACCORD, DSS awarded PFI contracts in 1999 to three companies that headed the short-listed consortia (Note: the contracts are with the lead members not the consortia, as the latter are not legal entities)

    —  EDS for the Affinity consortium;

    —  BT Syntegra for the Arcway consortium; and

    —  ICL (now Fujitsu) for the 1 ACCORD consortium.


  4.  The Prime Contractor of this group is EDS with specified sub contractors:

    IBM UK Ltd and

    PWC Consulting (now part of IBM).

  5.  Under these arrangements, EDS was selected as:

    —  the Lead Service Provider, under which EDS is required to co-ordinate and manage all Service Provider activity and to perform certain cross-cutting operational services (eg help desk); and

    —  the IT Provider of Choice when the Department intends to procure services via the ACCORD Agreements and subject to detailed contracted provisions.

  6.  The ACCORD IS/IT Services Agreement with EDS enabled the Department to award Business Allocations to EDS.

  7.  Examples of Affinity Awards include:

    —  various awards relating to the Department's Early Office Infrastructure (EOI) project—the project to introduce a new modern desktop infrastructure to the Department.

    —  Child Support Reform under which EDS are contracted to design, build, finance and operate a range of IT services for the Child Support Agency.

    —  New Tax Credits covered the development and delivery of the DWP-end changes and IT infrastructure needed to support the Government's NTC Programme.


  8.  The Prime Contractor of this group is BT with specified sub contractors Bull Information Systems Limited and SchlumbergerSema Group UK Limited. BT was also selected as the Network and Office Service Provider.

  9.  The ACCORD IS/IT Services Agreement with BT enabled the Department to award Business Allocations to BT.

  10.  Examples of Arcway awards include:

    —  Advanced Telephony has modernised telephone systems in the Child Support Agency, Pension Offices and Jobcentres.

    —  EOI Distribution, Implementation & Disposal was part of the programme to modernise the Department's existing computer systems, where BT worked alongside EDS.


  11.  The Prime Contractor of this group is Fujitsu with specified sub contractors Accenture, Experian Limited, Ferret Information Systems Limited, Microsoft Limited and Rand Information Systems Limited.

  12.  The ACCORD IS/IT Services Agreement with Fujitsu enabled the Department to engage consultants to provide Advisory Services.

  13.  An example of 1ACCORD award is the Provision of Advisory Services which enables the Department to engage specialist consultants.


  11.  This PFI Agreement with EDS was made by ES prior to the creation of DWP, and these contractual arrangements remain in force.

  12.  Under the ITPA, EDS provide Jobcentre Plus with core IT services that support client facing, employer and some corporate business processes. These include:

    —  application systems development, implementation and maintenance;

    —  wide area network infrastructure development and maintenance;

    —  provision of desktop and mid-range datacentre hardware and maintenance;

    —  webhosting and e-business services;

    —  associated support services.

  The ITPA also provides telephony in the form of fixed and mobile services and advanced telephony in contact centres.


  13.  The Department also makes use of agreements set up by the Office of Government Commerce for IT services, available for all Government Departments; these include S-Cat Frameworks, G-Cat Frameworks and Government Telephony Contracts (GTC). The Department uses these agreements for some telephony services and for IT consultancy. S-Cat is also currently being used to source some of the Department's IT development related requirements, in advance of the award of the DWP specific Framework Agreements currently being established.


  14.  This agreement was set up by the Inland Revenue (IR) to provide IT hardware and software and some IT Services. By arrangement with IR, the Department has used this agreement with Computacenter to source IT hardware and software for over 100,000 PC systems under the Early Office Infrastructure programme.


  15.  The Department provides suppliers with information throughout the procurement process, but the principal stages are:

    —  when seeking expressions of interest from suppliers to take part in a procurement;

    —  when requesting proposals from suppliers selected to bid; and

    —  in the invitation to tender.

  16.  At the "expressions of interest" stage suppliers will be provided with:

    —  background information on the Department, and particularly the business unit(s) to which the procurement relates;

    —  an indication of the scope of work envisaged under the contract; and

    —  general details of the dependencies relating to the work.

  17.  When seeking proposals from the selected suppliers they are issued with a Statement of Service Requirement. This document includes:

    —  details of existing services which will be impacted by the contract;

    —  functional and service requirements to be met under the contract that is being negotiated (including both mandatory and desirable requirements);

    —  output requirements of the systems to be provided;

    —  where appropriate, significant timescales that need to be met; and

    —  an indication of the general terms and conditions.

  18.  At the "invitation to tender" stage suppliers are provided with the full terms and conditions which will apply to the contract and detailed instructions on how they need to respond to the invitation to tender to ensure that their tender is capable of being accepted by the Department. The invitation to tender will also confirm the criteria being used to assess the tenders and their relative importance.

Department for Work and Pensions

15 December 2003

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