Provision of Nest Scheme administration services

Concepts

• finance and insurance
• national employment savings trust
• provision of nest scheme administration
• provision of nest scheme administration services
• tata consultancy services
• operation of administration services
• financial services organisation
• defined contribution pension scheme
• administration services
• fully outsourced service

Location

London:

Description

The Authority has awarded a contract to Tata Consultancy Services (TCS) for the build, delivery and operation of administration services for the defined contribution pension scheme known as the National Employment Savings Trust. The administration services will support auto-enrolment and be delivered primarily via digital channels. The contract will be for a minimum term of 10 years, with an optional extension period of up to 5 years, and the option of an additional period of up to 3 years for exit. The total contract value is indicative and covers this potential 18 year period. The Authority considers that competition is absent for technical reasons and so has awarded the contract to TCS without publishing a prior call for competition. The Authority's reasons for forming this view are set out below. The Authority and TCS entered into the contract on 21/06/23.

Total Quantity or Scope

The Authority has procured a fully outsourced service for the build, delivery and operation of administration services for the defined contribution pension scheme known as the National Employment Savings Trust. … As a financial services organisation with public body status, the Authority adheres to public procurement regulations. Therefore, the Authority conducted this procurement in accordance with the rules laid out in the Public Contracts Regulations 2015. The Authority has used the negotiated procedure without prior publication for the reasons explained below.

Award Detail

Renewal Options

The contract will be for a minimum term of 10 years, with an optional extension period of up to 5 years, and the option of an additional period of up to 3 years for exit. When exiting the contract, the Authority has three options: the Platform-as-a-Service option, the self-hosted option, and the replacement services option.

Award Criteria

CPV Codes

• 66000000 - Financial and insurance services
• 48000000 - Software package and information systems
• 71600000 - Technical testing, analysis and consultancy services
• 72000000 - IT services: consulting, software development, Internet and support
• 75100000 - Administration services
• 75320000 - Government employee pension schemes
• 79000000 - Business services: law, marketing, consulting, recruitment, printing and security

Indicators

• Options are available.

Legal Justification

Nest requires assurance that its partner is sufficiently experienced and technically capable of delivering the complex requirements of the contract. To this end Nest requires that its partner has experience of operating in the UK Defined Contribution (DC) pensions market; that they can evidence delivering a digital first service in a DC pensions environment; and that they can evidence experience of delivering both a transition and data migration, alongside an ongoing service, to a customer base of Nest's scale and complexity. Nest has assessed the market against its requirements and has concluded that competition does not exist. Nest commissioned a broad market assessment from PricewaterhouseCoopers to understand whether there is competition in the market capable of meeting Nest's requirements for technical experience. The assessment considered all suppliers with UK DC experience, as well as the participants who engaged in the recent procurement for these services (OJEU ref 2019/S 091-219508). PwC's expert conclusion was that, apart from TCS, there was no single supplier or consortium in the market now or the short term (assessed over the next 12 months) who could meet Nest's requirements. Nest concludes there is presently no reasonable alternative or substitute available and the absence of competition is not the result of an artificial narrowing down of the parameters of the procurement. This is evidenced by the following points: 1. Given the national importance of a functioning Nest scheme Nest has carefully considered its minimum criteria relating to the experience and successful track record that any potential supplier must evidence and specifically requires the experience set out above so Nest can be assured that its complex technical requirements will be met and that it will not risk service discontinuity and can meet the transforming needs of Nest's customers over the next decade. The experience requirements have been informed by the outcome of the recent procurement where the contract was awarded to a supplier without this level of experience. 2. Nest's output requirements for the service have not changed from those advertised to the market in the recent procurement (which attracted only two final tender submissions in 2021 despite extensive market warming efforts) meaning that Nest can be confident of the judgement it is taking of the market based on the response to the recent procurement and the up-to-date market assessment provided by PwC. 3. The disaggregation of the scheme is not possible at this stage because the current solution is not readily interoperable with other suppliers' solution(s) and a change from a single service provider solution would add complexity to an already highly complex project. The new contract incorporates flexibility aimed at being able to disaggregate elements in future. Nest considers that there is no supplier in the market other than TCS that can meet Nest's requirements. Accordingly, and in the best interests of its members, Nest is able pursuant to Regulation 32(2)(b)(ii) of the Public Contracts Regulations 2015 (PCR) to negotiate a contract directly with TCS without needing to advertise the opportunity and has done so.

Other Information

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