Without competition, TCS wins back UK pensions body in £1.5B mega-deal

The UK's National Employment Savings Trust (Nest), an occupational pensions scheme, has inked a £1.5 billion ($1.9 billion) deal with TCS without competition after sacking off French supplier Atos earlier this year.

The new deal says the India IT services giant will the build, deliver and operate administration services for the defined contribution pension scheme, supporting auto-enrolment and be delivered primarily via digital channels.

In February, NEST ended its £1.5 billion ($1.9 billion) deal with French IT services supplier Atos just two years into its potential 18-year term.

At the time, The Register was told Nest and Atos finished their active program of work, and Nest was continuing to work with its existing partner, TCS, while it reviews its longer-term requirements and plans.

That assessment seems to have concluded that no one else in the world could provide the combination of tech and services NEST requires.

In the announcement for the new deal — set to last between 10 and 18 years — NEST said competition is absent “for technical reasons” so it awarded the contract to TCS “without publishing a prior call for competition.”

The tender documents explained Nest commissioned a market assessment from accountancy and consultancy firm PricewaterhouseCoopers “to understand whether there is competition in the market capable of meeting Nest's requirements for technical experience.”

“PwC's expert conclusion was that, apart from TCS, there was no single supplier or consortium in the market now or the short term (assessed over the next 12 months) who could meet Nest's requirements,” the document said.

As a public body, NEST needs to comply with public procurement regulations, which set out rules for fair and open competition. However, the authority said it was able to use a “negotiated procedure without prior publication” for the contract award because of the absence of competition.

“Nest concludes there is presently no reasonable alternative or substitute available and the absence of competition is not the result of an artificial narrowing down of the parameters of the procurement,” it said.

Nest noted that its requirements for the service had not changed since it awarded the work to Atos in March 2021 in a contract estimated to be worth £1.5 billion over 18 years. That competition only attracted only two final tender submissions in 2021 “despite extensive market warming efforts,” the latest tender notice reveals.

Nest’s decision to end its relationship with Atos in February came about after the French supplier argued that product delivery deadlines should be extended because the publicly owned investment trust had requested last-minute design changes. Nest refused to renegotiate the delivery timeline and cited terms and conditions in the contract to try to keep the timetable on track, according to details seen by The Register.

In a statement at the time, Gavin Perera-Betts, Nest chief customer officer, said Atos had been “instrumental in helping us transition to becoming a more data-led organization.”

In an email to The Register, John Ainsworth, head of Atos Business Transformation Services, said the company had “helped set strong foundations for the organisation's digital transformation journey. We are working with our teams and partners to manage the transition of the contract."

Nest first signed with TCS in 2010, in a deal set to last until 2020. It looks like the couple can enjoy many more years together. ®