When low-balled projects go bad: Scottish pensions agency starts £10m procurement to buy the system Capita could not

Cancelled contract saw outsourcing giant paying back £700k

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The Scottish Public Pensions Agency (SPPA) has begun tendering for a £10m administration system - rebooting a project previously awarded to Capita that was cancelled when the outsourcer missed all milestones.

In a prior information notice, the agency – which administers about 500,000 people's pensions – said it is looking to "initiate engagement with the market for the provision and procurement of solutions required to manage the administration of pensions, payments and the provision of related customer and employer organisation interfaces and services".

Turning to the IT industry to seek "views from potential providers and partners regarding delivering of part or all of the range of services", the SPPA will consider bids including "on-line self service facilities for scheme members covering a range of platforms and channels; integration with voice based telephony services which may include the use of chat bots; data integration and interface coordination services with employer organisations and payment management services; analytics and reporting capabilities."

"Management of data to include validation, enhancement and augmentation; workflow, activity and task management; and, opportunities for process automation and machine based learning" are also mentioned in the tender.

Project failure

Although at early stages of vendor discussion, whoever wins the final contract will have large and perhaps rather smelly shoes to fill. Capita won the public sector pensions IT contract in 2015 with a bid later described by Audit Scotland as "abnormally low" in terms of overall costs. The 18-month timescale was "unrealistic", the spending watchdog said in a 2019 report [PDF].

"Capita was not able to provide a working system and did not achieve any of the project milestones. This was a main contributor to the project failure," the country's auditor general said.

The contract was cancelled in February 2018 and Capita paid the SPPA £700,000 in November 2018 following the conclusion of a legal process.

According to Audit Scotland, the SPPA spent £6.3m on the project and a further £2.4m extending contracts with existing suppliers when the project failed to meet the original timetable.

The project failure left the SPPA "unable to progress strategic, business and workforce plans as originally intended" and it therefore required an additional revenue budget of £9.8m between 2019/20 and 2022/23, as well as capital allocations of £13.6m over the next five years, the report said.

According to the new notice, the SPPA intends to publish a contract notice in January 2021. ®

Updated to add:

An SPPA spokesperson told The Register:

"There is no gap in our service provision, which continues to be met by our current ‘Altair’ platform, supplied and supported by Aquila Heywood. There has been no disruption experienced by our members as a result of the closure of the Capita project."

They said the SPPA had been running its pensions administration on the Altair platform since the Capita contract was cancelled.

When asked why it had taken 18 months to begin tendering for a new system, the SPPA responded: "Following the closure of the Capita project, the SPPA implemented improvements to the existing Altair platform and processes, supplied and supported by Aquila Heywood. We have also recently strengthened our internal procedures and capabilities before commencing the delivery of the planned new system."

It added: "Our expectation on when the new system will be in place is dependent on the outcome of the business case."

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