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Debt Collection Services

Prior information notice


Directive 2004/18/EC

Section I: Contracting authority

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

5th Floor West Ralli Quays, 3 Stanley Street
For the attention of: Ralph Oliver
M60 9LA Salford
Telephone: +44 3000589872

Internet address(es):

General address of the contracting authority:

Further information can be obtained from: The above mentioned contact point(s)

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: yes

Cabinet Office
1 Horse Guards Road
SW1A 2HQ London

Section II.B: Object of the contract (Supplies or services)

II.1)Title attributed to the contract by the contracting authority:
Debt Collection Services
II.2)Type of contract and place of delivery or of performance
Service category No 27: Other services

NUTS code UK

II.3)Information on framework agreement
II.4)Short description of nature and quantity or value of supplies or services:
Information on framework agreement
The Debt Market Integrator ("DMI”) procurement will involve the establishment of a framework agreement.
The purpose of this notice is to highlight:
1. Two potential separate but related procurements for Debt Management Services, which are due to commence early in 2014; and
2. A supplier day which will take place on Monday 03/2/2014, the purpose of which is to provide further information on both procurements.
The procurement for the DMI is central to the implementation of the wider UK Government debt management strategy. That strategy was established by the Fraud, Error and Debt Taskforce to help co-ordinate actions to reduce fraud, loss through error and debt owed across the public sector. The DMI procurement will be undertaken by the Cabinet Office ("CO") for a broader suite of debt management services available to all UK Contracting Authorities. The initial customers of the service will be Her Majesty's Revenue and Customs ("HMRC”) and the Department for Work and Pensions ("DWP").
The other procurement, Tax Credit Collection ("TCC”), to be undertaken by HMRC, will be for the provision of debt collection services for HMRC, specialising in Tax Credit Debt. These services are also part of the wider UK Government debt management strategy which includes a clear time-bound commitment to rapidly extend the collection of Tax Credit debt as outlined in the Autumn Statement 2013.
The entity established by the DMI procurement will take responsibility for any contract that may have already been awarded under the other procurement.
Procurement 1: Debt Market Integrator (DMI)
The CO are seeking to appoint a private sector partner (the "PSP”) to subscribe for a majority shareholding in a joint venture company (the "JVCo”) to deliver a suite of debt management services to a range of government departments, including HMRC (covering both the services under procurement 2 and other debt management and recovery services), the Department for Work & Pensions ("DWP”) and other public sector bodies. The services will be available to all UK Contracting Authorities and it is intended to be HM Government's ("HMG") sole route to market for debt management services.
It is anticipated that the PSP will provide:
- Investment in the JVCo;
- A proven ability and capacity to deliver high quality and innovative debt management services;
- Proven ability to manage a diverse supply chain, including substantial sub-contractors and Small and Medium-Sized Enterprises ("SMEs");
- The ability to transform existing services and grow a sustainable and profitable business with the CO as a minority equity partner, and HMG Departments as customers:
- A proven track record of excellence in compliance with relevant industry regulation standards and guidelines; and
- Management services, either directly or via an effective network of suppliers.
The debt management services to be provided are a comprehensive and integrated suite of debt collection, analytics and enforcement services which will work alongside and leverage internal HMG debt expertise, resources and data. These services will be delivered through the JVCo. It is expected that the JVCo will be a separate, non-public entity with a board and management team appointed by its owners. Its growth and profitability will be directly linked to its ability to increase net recoveries to the Exchequer by improving net yield, that is the ratio of debt placed with the JVCo as against the sums actually returned to the Exchequer.
It is anticipated that the JVCo will provide a single point of access to a broad range of services, supporting HMG and other Contracting Authorities in delivering their debt strategies to maximise net yield.
To support this HMG is seeking to achieve 7 main objectives:
- Increase net yield to the Exchequer;
- Align and reduce unit costs for government services taken from the JV Co as against current arrangements;
- Secure rapid low cost access to new services;
- Improve commercial management of debt management services;
- Achieve and then improve baseline service quality;
- Achieve greater debt prevention through provision of accurate Management Information and;
- Comply with best practice in Debt Collection operations - especially in relation to managing hardship cases.
The JVCo will be structured in such a way that HMG maintains some influence over the JVCo's future strategy. HMG will retain responsibility for debt-related policy and legislation.
The JVCo will act as an enabler to UK government departmental debt strategies by offering a range of services that deliver better net performance for the larger government departments, in addition to new services to the smaller departments. This will create the opportunity to increase debt recovery for all government departments. JV Co will also inform ways in which to enhance and improve existing internal departmental processes.
The JVCo will provide service offerings ranging from specialist debt management through to digital payments and enforcement services. These services will be introduced within a phased delivery - with some services available from November 2014 and others developed and enhanced as the capability of the JVCo develops.
The JVCo will be required to operate under relevant departmental legislative frameworks where applicable. It should be noted that different Departments will have different legislative frameworks and the extent to which particular debt collection activities can be contracted to the DMI will vary depending on the activity and the Department concerned. There may also be different confidentiality issues concerning the sharing of customer information which will need to be considered. (Further information will be available at the Market Engagement Event).
The DMI services will be flexible, allowing Contracting Authorities 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 and requirements. It is envisaged that Contracting Authorities will decide which services to use in respect of particular debts or packages of debts. The extent to which service would be used would be a decision for each Contracting Authority.
The DMI will provide a single point of access to a number of tailored services, which is expected to include, but not necessarily be limited to, the following:
- Analytics (Debt Management, Predictive Modelling, Collection Optimisation, Business/Market Intelligence, Decision Analytics, Case Management)
- Collection (Debt Collection, Case Management, Payments Accounting, Debtor Correspondence, Data Management)
- Compliance & Enforcement (Legal Collections and Enforcement, Case Management, Payments and Accounting, Debtor Correspondence, Data Management)
The main goals and aims for HMG are expected to include the following:
- Using analytics as an integral part of the debt management process;
- Using established debt collection processes to improve recovery, for example multiple placements;
- Leveraging cross government economies of scale; for example through using a single supplier Framework Agreement with the JvCo to obtain services;
- Access to the necessary capacity to increase flow, for example, of unresolved (outstanding and undisputed) debt;
- Improved targeting and using behavioural insight to inform debt collection strategies; and
- Selling debt where it is not cost effective to recover directly.
Procurement 2: Tax Credit Collection (TCC)
HMRC is a key delivery department for UK Government. It plays a vital role in helping to reduce the deficit through maximising the collection of taxes due in order to fund the UK's public services. It also helps families and individuals with targeted financial support.
HMRC's objectives are to maximise revenues, improve customer experience and reduce costs in a sustainable way. HMRC's strategy is based on understanding customers, so it can deliver services tailored to their needs and positively influence their behaviour.
HMRC are looking for a single supplier (who may be a Debt Collection Agency, Debt Broker, or any other organisation, having the necessary capability and capacity) to provide a debt collection service for tax credit debts. It is intended that the successful supplier will have the capacity to accommodate debt placements in the region of GBP 3 billion. The service will not include any face to face contact or enforcement activity, and will be required for a period of 2 years.
For both procurements, in the case of consortia, it is expected that the members of the consortium will form a single legal entity.
Estimated cost excluding VAT: 1 GBP


This contract is divided into lots: no
II.5)Common procurement vocabulary (CPV)

79940000, 79200000, 72000000, 72300000, 75000000, 79100000

II.6)Scheduled date for start of award procedures
II.7)Information about Government Procurement Agreement (GPA)
The contract is covered by the Government Procurement Agreement (GPA): yes
II.8)Additional information:
Market and Supplier Engagement
The CO and HMRC will host a joint Market Engagement event on 3.2.2014 in central London to present the 2 projects, and improve HMG's understanding of supplier capabilities and gain advice from the market about the maturity of the requirement in readiness for both procurement exercises. The DMI discussions will form the first part of the event, starting at 10:00 am, and the TCC discussions will be held separately in the afternoon, starting at 13:30 pm.
The precise terms and timetable for the procurement exercises will be determined following the market engagement, however, it is expected that the procurements will both commence shortly after this event. Procurement 2 go-live must be no later than early August 2014 and go-live of procurement 1, together with the novation of any contract awarded under procurement 2, is expected to commence by November 2014.
The Market Engagement event is an opportunity for suppliers to interact with the project teams and their subject matter experts. The event will consist of a briefing by the CO and HMRC project teams and key speakers that will identify and explore themes relating to management of HMG debt, including HMRC.
For procurement 1, CO has created a number of questions that the potential JVCo (or potential consortia of suppliers) will be requested to provide a response to by xxxxxx using HMRC's e-sourcing tool (Emptoris). These questions are intended to help further shape the requirement and are detailed as follows:
- Do you think that the DMI concept, as currently envisaged, will enable HMG to achieve its proposed outcomes for the management and recovery of debt? If not, what changes would you make to the DMI concept and/or the JVCo and its proposed relationship to HMG and customers? What alternative solutions would you propose? (maximum of 1000 words)
- Do you think that the current range of DMI services proposed to be provided by the JVCo is capable of achieving HMG's proposed outcomes concerning the management and recovery of debt? If not, what changes would you make to the proposed services and what additional services would you suggest? (maximum of 1000 words)
- What scale of investment would you envisage being necessary to enable the JVCo to achieve the proposed outcomes for the management and recovery of debt? What commitments and/or information would you require from HMG and/or customers to make that level of investment? (maximum of 1000 words)
- What models do you propose for the payment and incentivisation of the JVCo and PSP? How would that mechanism ensure continued improvement in the value for money provided to HMG? (maximum of 1000 words)
Responses to these questions from interested suppliers will be treated in confidence.
Subsequent to the Market Engagement Event there will be an opportunity for interested potential prime suppliers for the DMI procurement to hold face-to-face follow-up discussions with members of the HMG Team and before the publication of the OJEU advertisement for the requirements, these will be held between the 4.2.2014 - 7.2.2014. Further detail will be provided in due course.
Potential "second tier” suppliers/subcontractors for the DMI procurement will also be invited to discuss the requirement with the Team at separate discussions, either face-to-face or by telephone, further detail to be provided in due course.
There will be an opportunity for potential TCC suppliers to have a face to face discussion after the main Engagement Event on the 3.2.2014, further details to follow in due course.

Section III: Legal, economic, financial and technical information

III.1)Conditions relating to the contract
III.1.1)Main financing conditions and payment arrangements and/or reference to the relevant provisions governing them:
Full details regarding legal, economic, financial and technical information to be provided at the tender stage will be detailed in the Contract Notices and/or in the tender documentation.
III.2)Conditions for participation
III.2.1)Information about reserved contracts

Section VI: Complementary information

VI.1)Information about European Union funds
The contract is related to a project and/or programme financed by European Union funds: no
VI.2)Additional information:
How to Register:
Suppliers must pre-register to receive an invitation to the published event and must also sign and return a Non-Disclosure Agreement. To access the Non-Disclosure Agreement and receive the invitation you will need to:

1. Register your interest by emailing requesting access to the following event "BAK-2014- Debt Market Integrator - Supplier Day-484/485" with the following information;

- name of individual (lead contact).
- Company name.
- Email address.
- Contact telephone number.
2. If you wish to attend the Market Engagement Event please let us know by accessing the e-sourcing tool and provide the names of any colleagues or deputies (a maximum of three people from each organisation please, to keep event numbers manageable) who will be attending. Please note that by signing up to the event the individual is willing for their organisation's name to be shared with others within an attendee list for the event.
Once the invitation has been accepted full details of the Market Engagement Event will be sent to you. Any suppliers registering after 13:00 30.1.2014 will not be guaranteed a place at the Market Engagement Event and will be accommodated only on a reasonable endeavours basis.

To view this notice, please click here:

GO Reference: GO-2014120-PRO-5402113
VI.3)Information on general regulatory framework
VI.4)Date of dispatch of this notice: