DWP to pay Atos £10m to extend disability reassessments contract

DWP to spend millions to keep on French firm that wanted to walk away

The Department for Work and Pensions (DWP) is to extend French IT services firm Atos' multi-million pound deal to handle disability reassessments, despite the company wanting to walk away from the contract in February.

The firm, which would have had to pay a fee to the government to end its contract early, has been criticised for its declining standards of service.

Atos had said previously that it would continue to take the tests until a new firm takes over, and the government still intends for another assessment services provider to take charge as it has started the procurement process to identify a suitable supplier.

But in an Official Journal of the European Union contract award notice, DWP said that it needed an interim arrangement "to support the authority's statutory duties to deliver certain health and disability benefits".

A DWP spokesman said that despite the department looking for a new provider, it would look to replace the current IT separately.

"To make sure claimants get a good service during transformation, we are transferring the IT separately, and at a later date, than the rest of the service (which transfers in 2015)," the spokesperson stated.

"We have therefore asked Atos to continue to provide the current IT services for a further year. In the meantime work has started on planning for how we replace the IT".

The managed IT services contract is initially for one year of delivery from the end of Atos' current assessment services contract in 2015. DWP will have an option to extend the contract for up to four further one year extensions "to provide contingency".

The value of the contract, which is covered by the Government Procurement Agreement (GPA) is £10m, plus any additional costs of change. The value of any subsequent years will be based on the overall year one costs, the contract award notice reads.

DWP's justification for the award of the contract without a call for competition was because the services could only be provided by a particular tenderer.

It said that it wouldn't be possible for a new provider to build, test and deliver IT services in time for the new contract, and that the existing hardware, software and equipment would not be able to be used by another supplier because it is owned by Atos rather than DWP. Another supplier would also not be able to replicate this because "there is insufficient documentation to build them" and because the age of some of the physical assets means they are no longer available to purchase.