Tender for Debt Market Integrator

Tender for Debt Market Integrator

The DMI will offer a range of existing and new services that provide improved debt management and increased net yield through better debt analytics, debt collection, debt enforcement, litigation and fraud and error services and possibly debt sales.

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

2014/S 045-075722

Contract notice


Directive 2004/18/EC

Section I: Contracting authority

I.1)Name, addresses and contact point(s)

Cabinet Office
4th Floor, 1 Horse Guards Road
Contact point(s): HMRC
For the attention of: Ralph Oliver
SW1A 2HQ London
Telephone: +44 3000587872
E-mail: ralph.oliver@hmrc.gsi.gov.uk

Internet address(es):

General address of the contracting authority: http://www.cabinetoffice.gov.uk

Address of the buyer profile: HMRC 5th Floor West Ralli Quays, 3 Stanley Street, Salford, M60 9LA, United Kingdom.
Electronic access to information: Please refer to Section VI.3 (Additional Information) which clarifies the procedure regarding access to documentation
Electronic submission of tenders and requests to participate: Please refer to Section VI.3 (Additional Information) which clarifies the procedure regarding submissions
Further information can be obtained from: The above mentioned contact point(s)

Specifications and additional documents (including documents for competitive dialogue and a dynamic purchasing system) can be obtained from: HM Revenue & Customs
5W Ralli Quays, 3 Stanley Street
Contact point(s): e.procurement@hmrc.gsi.gov.uk
For the attention of: BAK-2014-Debt Market Integrator-484
M60 9LA Salford

Tenders or requests to participate must be sent to: HM Revenue & Customs
5W Ralli Quays, 3 Stanley Street
Contact point(s): e.procurement@hmrc.gsi.gov.uk
For the attention of: BAK-2014-Debt Market Integrator-484
M60 9LA Salford

I.2)Type of the contracting authority

Ministry or any other national or federal authority, including their regional or local sub-divisions
I.3)Main activity

General public services
I.4)Contract award on behalf of other contracting authorities

The contracting authority is purchasing on behalf of other contracting authorities: no

Section II: Object of the contract

II.1.1)Title attributed to the contract by the contracting authority:

Debt Market Integrator (DMI).
II.1.2)Type of contract and location of works, place of delivery or of performance

Service category No 27: Other services
NUTS code UK

II.1.3)Information about a public contract, a framework agreement or a dynamic purchasing system (DPS)

The notice involves the establishment of a framework agreement
II.1.4)Information on framework agreement

Framework agreement with a single operator
Duration of the framework agreement

Duration in years: 5
Justification for a framework agreement, the duration of which exceeds four years: This notice involves the establishment of a Framework Agreement between the Cabinet Office and a newly established company (the “Debt Market Integrator” or “DMI”) and the award of new shares to a Private Sector Partner (PSP) selected through this procurement. The new company will require a period of more than four years in order to recover its initial investment and transform its service offering whereby it is able to achieve a level of business and growth required in order to become sustainable.
We believe a shared ownership company (majority owned by the chosen PSP, minority owned by Government) provides the best vehicle to generate growth (improving debt management and collection across Government). Given this choice of model, we cannot provide an explicit value of the contract, as that depends on contractual terms that are to be negotiated between Cabinet Office and the chosen PSP.
However, we believe the total value of the contract, incorporating the envisaged substantial future growth, will be c GBP 1 bn.
Estimated total value of purchases for the entire duration of the framework agreement

Estimated value excluding VAT: 999 999 999 GBP
Frequency and value of the contracts to be awarded: GBP 1 billion.

II.1.5)Short description of the contract or purchase(s)

IT services: consulting, software development, Internet and support. Industry specific software development services. Business transaction and personal business software development services. Financial analysis and accounting software development services. Financial analysis software development services. Financial systems software development services. Accounting software development services. Analytical, scientific, mathematical or forecasting software development services. Analytical or scientific software development services. Mathematical or forecasting software development services. Sales, marketing and business intelligence software development services. Business intelligence software development services. Database software development services. Security software development services. File security software development services. Data security software development services. Miscellaneous software development services and computer systems. Spreadsheets and enhancement software development services. Systems and technical consultancy services. Business analysis consultancy services. Data services. Data-processing services. Computer tabulation services. Data conversion services. Data entry services. Data preparation services. Optical character recognition services. Data capture services. Data collection and collation services. Data network management and support services. Data network support services. Data network management services. Data analysis services. Data storage services. Data transmission services. Data supply services. Database services. Added-value database services. Data management services. Content or data standardisation and classification services. Research and development services and related consultancy services. Research and experimental development services. Research services. Experimental development services. Research and development consultancy services. Research consultancy services. Development consultancy services. Design and execution of research and development. Administration services. General public services. Administrative services for business operations. Administrative services of agencies. Supporting services for the government. Government services. Legal services. Legal advisory and representation services. Legal advisory services. Legal representation services. Legal advisory and information services. Accounting, auditing and fiscal services. Accounting and auditing services. Accounting services. Bookkeeping services. Compilation of financial statements services. Auditing services. Financial auditing services. Fraud audit services. Custom broker services. Statistical services. Auction services. Electronic auction services. Business and management consultancy and related services. Business and management consultancy services. General management consultancy services. Financial management consultancy services. Office-support services. Telephone-answering services. Telephone operator services. Call centre. Mailing-list compilation and mailing services. Mailing services. Supply services of personnel including temporary staff. Supply services of office personnel. Investigation and security services. Investigation services. Detective agency services. Collection agency services. Administration, defence and social security services. Contract administration services. The Cabinet Office, on behalf of HM Government (HMG) is seeking to appoint a PSP to establish, and be majority shareholder in, a DMI that is capable of delivering a suite of debt management services to a range of UK government departments and other UK Contracting Authorities.
The DMI will offer a range of existing and new services that provide improved debt management and increased net yield through better debt analytics, debt collection, debt enforcement, litigation and fraud and error services and possibly debt sales.
It is expected that the PSP, through the DMI, will have/provide:
1. A proven ability to deliver reliable, high quality and innovative retail debt management services at scale in the UK; or an equivalent proven scale retail debt services delivery capability elsewhere, together with comprehensive and credible evidence of sufficient practical understanding of the UK debt market and experience of successfully adapting retail debt operations to demonstrate the ability to succeed in the UK;
2. A proven ability to manage a supply chain in the debt services arena;
3. A proven ability to adapt services to comply with relevant local legislative, regulatory requirements and good practice;
4. Experience of working successfully in joint ventures or partnerships with the public or private sector;
5. Initial funding to establish the DMI company; and
6. The ability to grow a sustainable and profitable business.
The Departments that are collaborating with the Cabinet Office as ‘Initial Customers’ of the DMI are Her Majesty’s Revenue and Customs (HMRC), the Department for Works and Pensions (DWP), the Student Loans Company (SLC), the Legal Aid Agency (LAA), the Driver and Vehicle Licensing Agency (DVLA) and the Home Office (HO), however, the Cabinet Office envisages the DMI will offer cost effective debt management services to all its customers including other UK Contracting Authorities. Potential Bidders should note that the composition of Initial Customers could be subject to change during the procurement process.
HMG will retain a significant minority equity stake in the DMI with corresponding Board representation including an influence in its future strategy and growth. HMG will retain responsibility for UK debt-related policy and legislation.
It is expected that the DMI will be a non-public corporate entity with a Board and Management team appointed by its owners. Its growth and profitability will be directly linked to its ability to improve debt management and increase net yield for HMG and other customers.
The successful bidder for the role of PSP will, through the procedure contemplated by this Notice, acquire and hold equity share capital in the DMI through a Shareholders’ Agreement, Articles of Association, Subscription Agreement and other relevant documents.
The Cabinet Office recognises that, in order to provide the services required and achieve the stated objectives, the PSP may use sub-contractors to provide some of the services. We also welcome consortia bids. In all cases, we expect to contract with a single entity and expect a simple, transparent and credible Governance structure between parties.
It is expected that the DMI will provide the sole route to market for debt management for the Initial Customers.
The debt management services to be provided by the DMI are a comprehensive and integrated suite of debt management services including, but not limited to:
— Analytics (for example but not limited to Predictive Modelling, Collection Optimisation, Purchase and use of Business/Market Intelligence, Decision Analytics, Case Management);
— Collection (for example but not limited to Debt Collection, Case Management, Payments Accounting, Debtor Correspondence, Data Management, Management of third party suppliers of these services);
— Enforcement and Litigation (Debt Collection, Case Management, Payments and Accounting, Debtor Correspondence, Data Management);
— Fraud and error services;
— Debt Sales; and
— Strategic and tactical advice on improving debt yields.
The DMI services should be flexible, allowing customers of the DMI a choice to procure either a single service or any number of services across the whole range of offerings in order to satisfy individual circumstances, timetables and specific requirements. DMI services should be delivered in the context of the spirit of treating debtors fairly – in particular those in hardship.
The Cabinet Office will award to the PSP a Framework Agreement in accordance with the terms of this Notice. Call Off Contracts will then be entered into between the DMI and the Initial Customers. Details of the volumes of debt from Initial Customers can be found in the IM which will be made available as part of the PQQ process.
In addition to the Initial Customers referred to above, it is intended that the Framework Agreement will allow the DMI to provide the services specified above to other public sector bodies including but not limited to all UK Government Departments and their Arm’s Length Bodies and Agencies; Non Departmental Public Bodies (NDPBs); NHS bodies, Local Authorities and devolved administrations of Scotland and Northern Ireland (together the ‘Participating Bodies’). See Section VI for further details of those Participating Bodies that will be able to use the Framework Agreement and enter into Call Off Contracts under it.
Further information on the scope of services can be found in the Information Memorandum.
II.1.6)Common procurement vocabulary (CPV)

72000000, 72212100, 72212400, 72212440, 72212441, 72212442, 72212443, 72212460, 72212461, 72212462, 72212480, 72212482, 72212610, 72212730, 72212731, 72212732, 72212900, 72212990, 72220000, 72221000, 72300000, 72310000, 72311000, 72311100, 72312000, 72312100, 72312200, 72313000, 72314000, 72315000, 72315100, 72315200, 72316000, 72317000, 72318000, 72319000, 72320000, 72321000, 72322000, 72330000, 73000000, 73100000, 73110000, 73120000, 73200000, 73210000, 73220000, 73300000, 75100000, 75110000, 75112000, 75120000, 75130000, 75131000, 79100000, 79110000, 79111000, 79112000, 79140000, 79200000, 79210000, 79211000, 79211100, 79211200, 79212000, 79212100, 79212400, 79223000, 79330000, 79342400, 79342410, 79400000, 79410000, 79411000, 79412000, 79500000, 79510000, 79511000, 79512000, 79570000, 79571000, 79620000, 79621000, 79700000, 79720000, 79721000, 79940000, 75000000, 79994000

II.1.7)Information about Government Procurement Agreement (GPA)

The contract is covered by the Government Procurement Agreement (GPA): yes

This contract is divided into lots: no
II.1.9)Information about variants

Variants will be accepted: no
II.2)Quantity or scope of the contract
II.2.1)Total quantity or scope:

Estimated value GBP 1 bn.
II.2.2)Information about options

Options: yes
Description of these options: The Framework Agreement will have a duration of 5 years.
Call Off Contracts under the Framework Agreement may be awarded for a period up to 5 years with an option to extend by a further 2 years. Call Off Contracts will include provisions to benchmark prices after 3 years to ensure ongoing market competitiveness.
II.2.3)Information about renewals

This contract is subject to renewal: no
II.3)Duration of the contract or time limit for completion

Duration in months: 60 (from the award of the contract)

Section III: Legal, economic, financial and technical information

III.1)Conditions relating to the contract
III.1.1)Deposits and guarantees required:

No Deposits are required. The Contracting Authority’s (‘Authority’) particular Guarantee requirements will be set out in the PQQ.
III.1.2)Main financing conditions and payment arrangements and/or reference to the relevant provisions governing them:

Details of financing conditions and payment arrangements will be outlined in the Invitation to Negotiate (“ITN”).
III.1.3)Legal form to be taken by the group of economic operators to whom the contract is to be awarded:

The Authority intends to enter into a Framework Agreement with the DMI which will initially be 100% owned by HM Government. The Authority will subsequently enter into arrangements with the DMI under which the PSP will subscribe for a majority of the equity in the DMI. The successful PSP whether being a single contractor, prime contractor (which maybe an existing company or special purpose vehicle) or consortium, will, as a shareholder, be required to be a single legal entity.
III.1.4)Other particular conditions

The performance of the contract is subject to particular conditions: no
III.2)Conditions for participation
III.2.1)Personal situation of economic operators, including requirements relating to enrolment on professional or trade registers

Information and formalities necessary for evaluating if the requirements are met: Potential PSPs will be assessed in accordance with Part 4 of the Public Contracts Regulations 2006 (as amended) on the basis of information provided in response to PQQ.
Any bidder may be disqualified if any of the circumstances listed in Article 45 of the Public Procurement Directive 2004/18/EC (Regulation 23 of the UK Public Contracts Regulations 2006) apply to their organisation and bidder will be asked to complete an appropriate ‘declaration’ by responding to the PQQ.
This procurement will be managed electronically via HMRC’s e-Sourcing Suite (Emptoris), Information about the e-Sourcing application is available on the HMRC website: www.hmrc.gov.uk/about/supplying.htm. to participate in this procurement, participants must first be registered on the e-Sourcing Suite.

Economic Operators who have previously registered with HMRC who wish access to the PQQ and associated documentation must send an e-mail to e.procurement@hmrc.gsi.gov.uk. Quoting the ref. DMI – PQQ Event in the subject line. In the main body of the e-mail please provide your organisation’s name and the Login Name that has been previously registered e.g. adam.smith plus a simple line of communication requesting access to the event.

Economic Operators who have not previously registered with HMRC who wish access to the PQQ and associated documentation must send an e-mail to e.procurement@hmrc.gsi.gov.uk. Quoting the ref. DMI – PQQ Event in the subject line. In the main body of the e-mail please provide (a) the contract reference shown in Section IV.3.1 (File Reference), (b) a contact email address; (c) a contact name; and (d) the company name and contact telephone number.

Economic operators who have complied with the foregoing will receive details of how to access the online Tender documentation. (If an email response from HMRC is not received within one working day of your request, re-contact e.procurement@hmrc.gsi.gov.uk (after first checking your spam in-box) notifying non-receipt and confirming when the request was first made).

As a user of the eSourcing Suite you will have access to Emptoris email messaging service which facilitates all messages sent to you and from you in relation to any specific event.
Please note it is your responsibility to access these emails on a regular basis to ensure you have sight of all relevant information.
For additional technical assistance on use of the eSourcing Suite please contact
Responses must be uploaded by the date in IV.3.4.

III.2.2)Economic and financial ability

Information and formalities necessary for evaluating if the requirements are met: The minimum level(s) of standards required are as set out in the PQQ noting that a number of criteria will be assessed on a pass/fail basis.
The PQQ and associated documents can be accessed as per instructions detailed in III.2.1
III.2.3)Technical capacity

Information and formalities necessary for evaluating if the requirements are met:
The minimum level(s) of standards required are as set out in the PQQ. See conditions set out in the PQQ noting that a number of criteria will be assessed on a pass/fail basis.
The minimum standard for reliability having regard to past performance is that the Authority is satisfied that the contracts which each Potential PSP is required to provide have been satisfactorily performed in accordance with their terms or, where that has not occurred, the reason or reasons why that has not occurred, will not recur in the performance of the Framework Agreement the subject of the OJEU Notice or of any Call Off Contract under it.
In addition, under the policy, the Authority will re-assess reliability based on past performance before key points in the procurement process (i.e. short listing, preferred bidder status, conclusion of contract etc.). Bidders will accordingly be asked to update the evidence they provide in relation to past performance to reflect more recent performance on new or existing contracts (or to confirm that nothing has changed).
The Authority will also assess whether the minimum standard is met on request from any potential user of that Framework Agreement prior to conclusion of a Call-Off Contract with a value of GBP 20million or greater (excluding VAT). Failure to meet the minimum standard set will render the selected supplier ineligible for that Call-Off Contract.
Pursuant to the Cabinet Office Procurement Policy Note 09/12 ‘Taking Account of Bidders Past Performance’ as part of your company’s response to this PQQ, please provide a list comprising a statement of the relevant principal services provided by you, in the previous 3 years.
For the purposes of assessing reliability having regard to past performance the list should include contracts in respect of services which are similar services to those covered by the Contract Notice within the past 3 years and/ or which have a contract value greater than GBP 5 million per annum. In addition to the list you will be required to provide performance certificates for these contracts as set out in the PQQ document.
The PQQ and associated documents can be accessed as per instructions detailed in III.2.1
III.2.4)Information about reserved contracts
III.3)Conditions specific to services contracts
III.3.1)Information about a particular profession

Execution of the service is reserved to a particular profession: no
III.3.2)Staff responsible for the execution of the service

Legal persons should indicate the names and professional qualifications of the staff responsible for the execution of the service: no

Section IV: Procedure

IV.1)Type of procedure
IV.1.1)Type of procedure

Some candidates have already been selected (if appropriate under certain types of negotiated procedures) no
IV.1.2)Limitations on the number of operators who will be invited to tender or to participate

Envisaged minimum number 3: and maximum number 4
Objective criteria for choosing the limited number of candidates: Pre-qualification criteria as set out in the PQQ.
IV.1.3)Reduction of the number of operators during the negotiation or dialogue

Recourse to staged procedure to gradually reduce the number of solutions to be discussed or tenders to be negotiated yes
IV.2)Award criteria
IV.2.1)Award criteria

The most economically advantageous tender in terms of the criteria stated in the specifications, in the invitation to tender or to negotiate or in the descriptive document
IV.2.2)Information about electronic auction

An electronic auction will be used: no
IV.3)Administrative information
IV.3.1)File reference number attributed by the contracting authority:

BAK-2014-Debt Market Integrator-484
IV.3.2)Previous publication(s) concerning the same contract

Prior information notice

Notice number in the OJEU: 2014/S 15-022755 of 22.1.2014

IV.3.3)Conditions for obtaining specifications and additional documents or descriptive document

Time limit for receipt of requests for documents or for accessing documents: 27.3.2014 – 14:00
Payable documents: no
IV.3.4)Time limit for receipt of tenders or requests to participate

31.3.2014 – 14:00
IV.3.5)Date of dispatch of invitations to tender or to participate to selected candidates

IV.3.6)Language(s) in which tenders or requests to participate may be drawn up

IV.3.7)Minimum time frame during which the tenderer must maintain the tender
IV.3.8)Conditions for opening of tenders

Section VI: Complementary information

VI.1)Information about recurrence

This is a recurrent procurement: no
VI.2)Information about European Union funds

The contract is related to a project and/or programme financed by European Union funds: no
VI.3)Additional information

The current plans of HMRC and the Cabinet Office are to novate the contract that HMRC proposes to enter into relating to extended tax credit collection from HMRC to the DMI once the DMI is fully operational. The DMI will be required to execute a deed of novation as part of the overall transaction. The novation will become effective upon notice from HMRC and the Cabinet Office.
For the avoidance of doubt Bidders should note that the return date for the completed selection PQQ via the HMRC eSourcing Suite is 31.3.2014 at 14:00.
Bidders should also note that, in accordance with the UK Government’s policies on transparency, the Authority intends to publish the PQQ, the Invitation to Negotiate document and the text of any resulting contractual arrangements, subject to possible redactions at the discretion of the Authority. The terms of the Framework Agreement will also permit a public sector contracting authority, awarding a contract under the Framework Agreement, to publish the text of the contract, subject to possible redactions at the discretion of the Contracting Authority. Further information on transparency can be found at:

The PQQ referred to in this Notice includes an Information Memorandum (IM). Please note that the IM is directed only at persons who are:
(i) ‘investment professionals’ falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”);
(ii) are high net worth entities falling within Article 49(2) of the Order; or
(iii) are other persons to whom the IM may be otherwise lawfully communicated,
(“Eligible Recipients”).
Any person who is not an Eligible Recipient may not rely on the IM and investment in the DMI will not be available to such persons.
Nothing in this Notice, the PQQ, the IM or any related document constitutes investment advice.
The Authority expressly reserves the right (i) not to award or enter into any Framework Agreement, Call Off or other contract as a result of this procurement process commenced by the publication of this notice; and (ii) to make whatever changes it may see fit to the content and structure of the tendering competition; and in no circumstances will the Authority be liable for any costs incurred by the Bidders. If the Authority decides to enter into a Framework Agreement, this does not mean there is any guaranteed minimum level of contracted business or subsequent Call Offs. Any expenditure, work or effort undertaken prior to contract award is accordingly a matter solely for the commercial judgement of potential Bidders.
The Framework Agreement will be available for use by the following UK public sector bodies (and any future successors): DWP; HMRC; SLC; LAA; DVLA and HO as well as all other UK Central Government Departments, Executive Agencies, NDPBs and UK Contracting Authorities listed in the PQQ.
http://www.direct.gov.uk/en/Dl1/Directories/A-ZOfCentralGovernment/index.htm and Local Authorities http://openlylocal.com/councils/all

To view this notice, please click here:

GO Reference: GO-2014228-PRO-5495833

VI.4)Procedures for appeal
VI.4.1)Body responsible for appeal procedures

See VI.4.2

Body responsible for mediation procedures

See VI.4.2

VI.4.2)Lodging of appeals

Precise information on deadline(s) for lodging appeals: The Contracting Authority will incorporate a minimum 10 calendar day standstill period when information relating to the award of the contract is communicated to tenderers.
The Public Contracts Regulations 2006 (SI 2006 No 5) (as amended) provide for aggrieved parties who have been harmed or are at risk of harm by a breach of the rules to take action in the High Court (England, Wales and Northern Ireland). Interested service providers who are unsuccessful shall be informed as soon as possible after the decision has been made as to the reasons why they were unsuccessful. If an appeal regarding the award of the contract has not been successfully resolved, The Public Contracts Regulations 2006 (SI 2006 No. 5) (the “Regulations”) provide for aggrieved parties who have been harmed or are at risk of harm by breach of the rules to take legal action. Any such action must be brought within the applicable limitation periods (in general 30 days beginning with the date when the economic operator first knew or ought to have known that the grounds for starting the proceedings had arisen). Where a contract has not been entered into, the Court may order the setting aside of the award decision or order the contracting authorities (as defined in the Regulations) to amend any document and may award damages. If the contract has been entered into the Court may, depending on the circumstances, award damages, make a declaration of ineffectiveness, order the contracting authorities to pay a fine, and/or order that the duration of the contract be shortened. The purpose of the standstill period referred to above is to allow an application to be made to the Courts to set aside the award decision before the contract is entered into.
VI.4.3)Service from which information about the lodging of appeals may be obtained

See VI.4.2

VI.5)Date of dispatch of this notice:28.2.2014