Saas
Cost model designed to protect against low-cost bid bias, claims rival
A new court filing has revealed the UK’s Department for Work and Pensions accepted a bid from Capita to run its new Oracle-based HR and finance system at £272 million less than its own cost modelling. In March, the UK outsourcing company won the contract for running shared services for £370 million over ten years. The central government department had earlier produced a "Should Cost Model" — designed to protect against a bias towards low bids — which provided a total price of £642 million, according to court papers. Capita’s bid was 42 percent less than the “should-cost” estimate. Since January, the deal to run HR and finance systems for four UK government departments has been the subject of a legal claim from rival bidder Sopra Steria, which alleges Capita's bid was "abnormally low" and based on staffing "significantly below the current levels."
Capita has already told The Register it took part in a robust procurement process and stands ready to work with the DWP to ensure a smooth transition of service and value for money. A DWP spokesperson has previously told us: "We have signed a contract with Capita to deliver the Business Process Service and are committed to ensuring a smooth transition. Our priority is continuity of service and value for money for the public."
