The department will appoint a provider to a contract potentially lasting for 11 years, and covering the creation of a major new platform, and migration from the current generic tool
The Department for Work and Pensions is planning to invest almost £50m to design and deploy a new system for managing debt owed to the organisation.
As of the end of the 2023-24 year, the DWP is owed £9.4bn across a total of 5.2 million debtors, according to the department’s annual accounts. During the year almost £2.5bn in overpaid benefits was recovered.
The DWP has this week issued a commercial notice for a “future debt-management system”. The document outlines the department’s plans for the “purchase and development… [of a] system to meet DWP requirements”.
The notice indicates that, at the moment, the department is “using a current off-the-shelf platform to manage the recovery of debt and other monies owed to the government”.
Since 2014, the DWP has used debt-management software from US credit-scoring firm FICO. The department’s deal with the company was extended for a further six-year term in 2019.
Now, to fulfil its future needs for a new and bespoke tech platform, the DWP intends to appoint a supplier to an initial eight-year contract, beginning in April 2026 and valued at £48m, inclusive of VAT. This engagement can be extended for a further three years, taking its potential end date to 2037.
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During this time “work will include the design, configuration, [and] testing” of the new system, and then “support to migration from the existing platform and post-go live support”.
The notice adds: “The scope of the service is to include [a] SaaS debt management solution to meet DWP functional and non-functional requirements.”
To meet such requirements, the DWP sets out a range of specifications for the system, including: “user-friendly modern debt collection and management capabilities; flexible and business user configurable; hosted in the UK with 99.9% availability; scalable to meet projected growth in accounts and users; innovative future roadmap; implementation of a SaaS debt management solution; design and configuration; integration to DWP architecture; migration of data from current solution; testing and assurance; training and knowledge transfer; supplier project management; BAU support for a SaaS debt management solution; service desk; system maintenance; performance monitoring; [and] change-management support.”
The notice adds that the “DWP have previously undertaken informal market engagement to explore the core DMS capabilities in the market, [and] this exercise helped the department consider what capabilities are standard in the market to ensure effective competition in a fair and transparent manner”.
Further engagement will take place in the coming weeks and the planning document adds that, while “DWP requirements are still evolving… we will share our high-level requirements at a further virtual supplier briefing” to be held on 11 June. Any firms interested in taking part in this exercise have until 4pm on 6 June.
During the week after this event has concluded, “all suppliers will have the opportunity to provide feedback on the content covered at the briefing session”.
The DWP then expects to issue a formal tender kicking off a bidding process around mid-August.
