Veterans Services at risk of outsourcing

The Secretary of State for Defence must listen to the National Audit Office and take stock of past privatisation mistakes by halting plans to privatise any part of Defence Business Services (DBS).

Background

The DBS organisation within the MOD was established on 4 July 2011 by bringing together the Finance, Civilian HR, Vetting and some Knowledge and Information (K&I) services into a single shared service organisation, creating a centre of ‘shared service’ expertise. Subsequently, the Service Personnel and Veterans’ Agency (SPVA), which provides support services to Armed Forces personnel and Veterans, was brought into the DBS organisation in April 2014.

DBS pay, pension and administration services for the Armed Forces, including the Reserves, and Veterans, are delivered through a mixture of in-house and outsourced provision. The commercial arrangement for the outsourced provision expires in November 2019.

On the 9th April 2018, staff in DBS were informed that the MOD had agreed that the Future Services Delivery Contract (FSDC) had been given the green light to go to the market seeking solutions for the replacement of the current contract with DXC and offered the private sector the opportunity to bid for the Ministry of Defence Medals Office, the Armed Forces Compensation Scheme and the War Pensions Scheme.

Having learned no lessons from a number of National Audit reports in the failure of privatising government shared services and poor private sector contracting by government departments, the MOD had decided to simply re-let the currently outsourced service contracts for our Armed Forces pay, pensions and administration and consider add in additional areas of business to make the contract as attractive to industry as possible in our opinion.

Veterans’ welfare, armed forces pensions, the Ministry of Defence Medal Office, the handling of casualty notifications are all form part of the military covenant and should be delivered by the Ministry of Defence.

DBS is one of the largest and most complex shared services organisations in Europe, carrying out sensitive and critical services to the MoD, its staff, the armed forces and veterans. The MoD should safeguard this by keeping DBS and its services public.

Advert placed in Official European Journal of Union (OJEU) looking to outsource War Pensions, Armed Forces Compensation Scheme and Medal Office

Short description of the contract or purchase:

Administrative services for business operations. Information technology services. Call centre. Personnel and payroll services. Miscellaneous business and business-related services. Pension services. The proposed FSDC will cover the Armed Forces and Veterans Defence Business Services (DBS) services that are currently outsourced, which at a high level consist of:

a. A variety of personnel support services for the Royal Navy, Army and Royal Air Force, in the form of Joint Personnel Administration (JPA), which is the MOD’s current Military Payroll and Expenses HR system, and Pensions; and
b. The development and maintenance of a range of supporting Information System (IS) applications and elements of IS infrastructure.
This FSDC contract will:
a. Enable the radical transformation and modernisation of these services;
b. Continually develop change management and ways of working; and
c. Potentially expand the current contract scope by including services currently carried out in house by Defence.

Total quantity or scope (including all lots, renewals and options): The accompanying Information Memorandum provides background information and an overview of the scale and scope of the services to be delivered, including the commercial approach to the negotiation, evaluation and contract. The key components of the FSDC requirement are listed below:

a. Payroll and Expenses, Controls and Accounting services (including financial accounting with interfaces to other MOD and Other Government Department (OGD) systems);
b. Maintenance of Personnel Records (over 10M including wills and military documents);
c. The administration of several Military Pension and Compensation Schemes (including payment and financial accounting with interfaces to other MOD and Other Government Department (OGD) financial systems);
d. An Information System (IS) service in support of JPA, Pensions and Compensation Schemes and a broad range of complementary applications and interfaces;
e. A Personnel Administration Centre incorporating User Access Control (UAC), with an incident and issue management matrix and capability including an Enquiry Service, with multiple support channels for self-service, professional and corporate users of JPA, Pensions, Compensation Schemes and IS/Information Technology (IT);
f. The provision of Personnel Services in support of the Armed Forces with significant Business Processing Operations (BPO);
g. Delivery of a full Change Programme to both Information Technology Operations (ITO) and BPO. Provide a more flexible approach to the change delivery process.
h. The MOD will rely upon a successful contract to enable their own change strategies for personnel to be delivered; and
i. Engagement with multiple third parties on behalf of DBS .
Optional Services Options will be sought for the following services that are currently delivered in house:
a. Administration of the War Pensions Scheme and Armed Forces Compensation Scheme (including payment and financial accounting with interfaces to other MOD and OGD financial systems);
b. MOD Medal Office – the administration and issue of medals and awards;
c. Provision of Veterans Enabling and Supporting Services; and

d. Maintenance and development of existing Information System (IS) and enquiry Services in support of the above services.

The MOD reserves the right to include / add any other work related to delivery of Military Human Resources or Veterans Services during the lifetime of the contract.