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/entity: Future Service Delivery Contract (FSDC): Provision of Armed Forces Pay, Pensions and Military HR and Administrative Services.

Prior information notice for contracts in the field of defence and security


Directive 2009/81/EC

Section I: Contracting authority/entity

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

Ministry of Defence, C&C, Other
HOCS Commercial, 3-G, Ministry of Defence Main Building, Whitehall
For the attention of: Sukhi Rai
SW1A 2HB London
United Kingdom
Telephone: +44 2072189182

Internet address(es):

General address of the contracting authority/entity:

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
I.4)Contract award on behalf of other contracting authorities/entities
The contracting authority/entity is purchasing on behalf of other contracting authorities/entities: no

Section II: Object of the contract

II.1)Title attributed to the contract by the contracting authority/entity:
Future Service Delivery Contract (FSDC): Provision of Armed Forces Pay, Pensions and Military HR and Administrative Services.
II.2)Type of contract and location of works, place of delivery or of performance
Service category No 26: Other services
Main site or location of works, place of delivery or of performance:
II.3)Information on framework agreement
II.4)Short description of nature and scope of works or nature and quantity or value of supplies or services:
The Ministry Of Defence (MOD) is publishing this PIN to seek the market's views on the delivery of a specific part of Defence Business Service's (DBS) operations and alert industry to this forthcoming requirement.
Full details at Section II.7) Additional Information.
Estimated value excluding VAT:
Range: between 450 000 000 and 750 000 000 GBP


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

75112000, 72222300, 79512000, 79631000, 79900000

II.6)Scheduled date for start of award procedures and duration of the contract
Scheduled date for start of award procedures: 1.5.2019
II.7)Additional information:
The DBS organisation within the MOD was established on 4.7.2011 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.
Current 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.

Following previous Future Defence Business Services (FDBS) soft market testing undertaken in 2015 and most recently in 2016 (notified in PIN 2016/S 032-052191 on 16/02/2016), the MOD has considered in more detail the options for future DBS service delivery and has concluded that, while our aspirations for corporate services transformation remain, a full outsource of DBS under a single contract or an alternative commercial model for the management of DBS would not be appropriate. To progress our Transformation Agenda, the MOD now wishes to seek the market's views and understand latest industry capabilities regarding the currently outsourced requirement for Armed Forces and Veterans pay, pension and administration services to inform our decision-making around the Future Service Delivery Contract.

Future Service Delivery Contract (FSDC)
We anticipate that the FSDC will cover those Armed Forces and Veterans DBS services currently delivered through outsourcing, which at a high level consist of:
- 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 HR system, and Military Pensions; and
- The development and maintenance of a range of supporting Information System (IS) applications and elements of IS infrastructure.
A detailed Service Requirement Document (SRD) will be developed, however, in essence the key components of the FSDC requirement are listed below:
- Payroll, Controls and Accounting Services (including financial accounting with interfaces to other MOD and Other Government Department (OGD) systems);
- Maintenance of Personnel Records (over 10M including wills and military documents);
- The administration of a number of Military Pension and Compensation Schemes (including payment and financial accounting with interfaces to other MOD and OGD financial systems);
- An Information System (IS) Service in support of Military Pay, Pensions, Compensation Schemes and JPA, including a broad range of complementary applications and interfaces;
- A single customer access portal to JPA and Military HR and Administrative Services;
- A Personnel Administration Centre including User Access Control, with an incident and issue management matrix and capability including an Enquiry Service, with multiple support routes for self service, professional and corporate users of Pay, Pensions, Compensation Schemes, JPA and IS/Information Technology (IT);
- The provision of Personnel Services in support of the Armed Forces with significant Business Processing Operations (BPO);
- Delivery of a full Change Programme to both Information Technology Operations (ITO) and BPO with the bidders Change mechanism to be set out as a service; and
- Engagement with multiple third parties on behalf of DBS.
The delivery of these outputs will initially be supported by a range of existing software applications already in place; these include Oracle HRMS configured to deliver JPA. The contractor will be required to apply any necessary and required upgrades, licensing and patches; various Compensation and Pensions systems (with varying degrees of integration to JPA), and a number of complementary applications and interfaces. The DBS Service Personnel and Veterans (SPV) Interface Architecture is complex and significant, enabling many other Defence services and applications to operate successfully.
The MOD's aspirations from this contract are:
- Continuing service delivery through the safe and effective transfer of service between commercial arrangements to a steady state and beyond;
- Deliver tactical improvements to the service. For instance, improving the user experience through convergence of Military HR administration services, initially through a single point of access, with a reduced distinction between serving and post-serving personnel. Similarly, improving the user experience and MI capability that is delivered to the consumers of the service; and
- Work with the successful bidder over the term of the contract to transit towards a more federated service delivery and IS architecture resulting in an end state that uses application programming interfaces for components with a focus upon aligned specific core outputs rather than the current state where there is a large prime contractor working enterprise wide applications. This end state will provide Defence with more commercial transparency, improve our agility to react to rapid changes in demand, provide options for future procurement of the components in accordance with the Government Digital Agenda.
At times the FSDC will need to provide flexibility in the approach to volume and scope of change delivery; senior stakeholders within the MOD will rely upon a successful FSDC to enable their own change strategies for personnel to be delivered.
Additional Scope.
By way of illustration the following additional scope business areas will be discussed during forthcoming Industry Engagement, but their inclusion below does not necessarily mean that they will be taken forward to subsequent outsourced procurement:
- 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);
- MOD Medal Office - the administration and issue of medals and awards;
- Provision of Veterans Enabling and Supporting Services;
- Maintenance and development of existing Information System (IS) and enquiry Services in support of the above services; and
- Any additional service(s) which may be identified through the soft market testing process.
Programme Timescales.
FSDC is subject to on-going work, including internal approval processes. The MOD aims to refine and confirm the parameters of the FSDC requirement through this soft market testing activity. Presuming the decision is then taken to proceed, the proposed timetable is:
- Issue a Defence Contract Notice in the OJEU to initiate a procurement under the Defence and Security Public Contract Regulations 2011 negotiated procedure (regulation 18) in late Autumn 2017 (to include issue of a Dynamic Pre-Qualification Questionnaire (PQQ)),
- Issue of an Invitation To Negotiate (ITN) in Spring 2018,
- Anticipating a contract award in Summer 2019,
- Transfer and full service commencement required by late Autumn 2019.
Soft Market Testing.
The MOD wishes to seek the market's views and understand latest industry capabilities regarding the FSDC requirement.
Specifically, the MOD wishes to explore in detail the prospective role for the private sector and to understand likely interest from industry in any subsequent competition centred on the FSDC.
The MOD is therefore primarily interested in seeking views from organisations that may have an interest in the provision of the FSDC capability. The MOD is particularly interested in seeking views from organisations with prior expertise and experience in a role where they have been required to manage contracts with similar scope and volume (circa 275 000 regular users and circa 750 000 pensioners and Veterans, with an approximate annual processing of £22bn of payments, all impacting upon a broader community of circa 6 million of the UK population.)
The MOD would also be interested to hear from organisations that may have innovative approaches or technology that could be applied to this role. Furthermore, the MOD is interested in understanding the views of Small or Medium Enterprise-sized providers who may be able to provide some (if not all) of the services in the scope of the enterprise described above.
Particular topics for discussion will include, but will not be limited to:
- Viability of our short and medium term aspirations (technical, operational and commercial);
- Viability of our longer term aspirations, and how these might best be achieved;
- Innovative ways of reducing the total contract cost, including those which might require some changes to the MOD's internal processes and procedures;
- How change cost is going to be kept to a minimum;
- Commercial models and incentivisation mechanisms, including funding of required investment;
- Scope and duration of the contract; and
- The structure, scope and duration of the pre-contract industry engagement and negotiations.
Soft Market Testing Participation Process
Parties who are interested in participating in the soft market testing process in accordance with this PIN should contact the MOD through the identified point of contact by no later than 7 August 2017.
All such interested parties shall receive an information pack providing further detailed information regarding the FSDC requirement, including specific aspects upon which the MOD wishes to focus during the soft market testing. The MOD anticipates that the information packs should be despatched to respondents by 14 August 2017.
Each interested party will be required to provide specific information about themselves, their organisation and their interest in the FSDC requirement and whether they would wish to be considered for the following:
- Bilateral discussions with MOD;
- Providing written responses in accordance with the guidance provided in the information pack, to include participating in clarification Q&A process if necessary.
The precise details regarding the information required from each interested party will be contained within the information pack. The date for return of the above information will also be contained within the information pack, but will be no sooner than 14 calendar days of dispatch of the information packs.
It is recognised that the number of organisations responding to this PIN may be high with significant interest in attending a bilateral discussion. The MOD would hope to have a bilateral discussion (if requested) with all those suppliers who declare a likely interest in submitting a tender directly to MOD in any future competition. However, if the number of suppliers with such an interest is so high as to be unmanageable (envisaged to be no more than 10-12), the MOD may:
(a) Hold one or more plenary sessions; and/or
(b) Hold discussions with a supplier who is representative of a common approach or issue, such a representative being selected at the MOD's discretion on the basis of the criteria detailed below; and/or
(c) Hold shorter bilaterals or written/telephone communications on specific and company-sensitive declared issues.
A record of the sessions under a) and b) above will be available to all suppliers responding to this PIN on a non-attributable basis through the promulgation of the summary report detailed below.
In the event that the MOD selects a representative sample of suppliers (in accordance with (b) above), such a sample will be selected which in the MOD's view together demonstrate a sufficient depth of knowledge and experience and provide a balanced cross-section of the potential market. In making the selection of that sample the MOD will consider, using its professional skill and judgement, the following:
- Size of enterprise, so as not to exclude SMEs solely in favour of larger companies;
- Industry sector, so as to balance the range of parties potentially interested in the FSDC requirement;
- Defence background, to enable reflection of the differing challenges and considerations likely to be experienced through contracting defence related organisations and other service delivery specialists;
- Scope of interest against the core aspects of the FSDC requirement as explained in the information document;
- The quality of the responses to the information requested in the information document.
Although at this stage the MOD is primarily interested in suppliers who wish to fulfil the FSDC role, if there is sufficient interest, the MOD would consider holding a plenary session for suppliers whose interest would be as a sub-contractor in any tier of the supply chain.
For the avoidance of doubt, failure to be invited to participate in bilateral discussions (if such circumstances arise), or in the soft market testing process in any capacity, will not preclude any organisation from submitting a tender in any future competition and no prospective bidder will be disadvantaged by non-participation in this soft market testing process.
During the soft market testing process, all parties who have expressed an interest in participating, whether or not they are selected to participate in the bilateral discussions, may, having read the information pack, send to the point of contact any thoughts or observations they have in the light of the information pack, which the MOD will consider. Furthermore, if any party has particular questions, they can be directed to the point of contact and the MOD will strive to respond to them, although this will be on the basis that the question(s) and answer(s) will be shared with all interested parties and therefore anything commercially sensitive in nature should be avoided.
Following the completion of the soft market testing process, the MOD will promulgate a summary report providing details of the discussions held (but not including any information which is commercially sensitive in nature) to all suppliers responding to this PIN, on a non-attributable basis and intends to publish to all respondents the full list of organisations who respond to this PIN.
It is considered likely that parties who go on to participate in the bilateral discussions will be required enter into non-disclosure undertakings with the MOD. Failure to enter into an acceptable Non-Disclosure Agreement (NDA) with the MOD will preclude participation in the bilateral discussion element of the market testing process.
Process Summary.
For the avoidance of doubt, the soft market testing process to be taken forward following this PIN is as follows:
- Parties who are interested in participating in soft market testing in accordance with this PIN should contact the MOD through the identified point of contact by no later than 7 August 2017;
- All such interested parties receive an information pack providing further, more detailed information, and explaining what the MOD would like to receive from the interested party - this should be despatched to respondents no later than 14.8.2017;
- Each interested party provides information to the MOD having seen the information pack (full instructions for this will be included in the information pack although information will be requested to be with the MOD by a date no later than 29.8.2017);
- In the event that interest in bilateral discussions with the MOD is unmanageably high, the MOD will consider the approaches detailed at a), b) and c) above;
- Discussions are undertaken. It is currently anticipated that such discussions will take place during September 2017;
- We anticipate that the soft market engagement process, including clarification Q&A outside of the bilateral discussions, will conclude no later than 31.10.2017.
Point of Contact.

Interested parties should respond to this PIN by e-mail, no later than 7.8.2017, to: including the reference ‘MOD DBS FSDC Market Testing’.

In issuing this PIN and engaging with the market, the MOD is not committing to any procurement in relation to the requirements stated in this PIN. Any procurement shall be subject to contract.
As stated above, the MOD reserves the right to select an appropriately representative sample of interested parties from those who respond to this PIN, with whom to conduct the market testing exercise.
Non-participation in this soft market testing exercise will not preclude companies from expressing an interest in in any future procurement.
With reference to 1.4 above, the MOD does not envisage purchasing on behalf of other contracting authorities but nevertheless reserves the right to do so.
The MOD will not be liable to reimburse any costs incurred by any parties who respond to this PIN.

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:
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:
The Authority reserves the right to amend any condition related to security of information to reflect any changes in national law or government policy. If any contract documents are accompanied by instructions on safeguarding classified information (e.g. a Security Aspects Letter), the Authority reserves the right to amend the terms of these instructions to reflect any changes in national law or government policy, whether in respect of the applicable protective marking scheme, specific protective markings given, the aspects to which any protective marking applies, or otherwise. The link below to the website provides information on the Government Security Classification.

Advertising Regime OJEU:- This contract opportunity is published in the Official Journal of the European Union (OJEU),the MoD Defence Contracts Bulletin and

Suppliers must read through this set of instructions and follow the process to respond to this opportunity.

The information and/or documents for this opportunity are available on

You must register on this site to respond, if you are already registered you will not need to register again, simply use your existing username and password. Please note there is a password reminder link on the homepage.
Suppliers must log in, go to your Response Manager and add the following Access Code: 8XM7S6D5ET.
Please ensure you follow any instruction provided to you here.
The deadline for submitting your response(s) is detailed within this contract notice, you will also have visibility of the deadline date, once you have added the Access code via DCO as the opening and closing date is visible within the opportunity.
Please ensure that you allow yourself plenty of time when responding to this opportunity prior to the closing date and time, especially if you have been asked to upload documents.

If you experience any difficulties please refer to the online Frequently Asked Questions (FAQ’s) or the User Guides or contact the MOD DCO Helpdesk by emailing or Telephone 0800 282 324.

GO Reference: GO-2017719-DCB-10664297.
VI.3)Information on general regulatory framework
VI.4)Date of dispatch of this notice: