CO0344 Essex Payroll and Pensions Administration Service

Essex County Council invites tenders for provision of its Payroll and Pension Administration

Service. The current internal payroll service makes payments to around 8,300 employees per month including managing pension contributions and statutory reporting. It also manages elements of the system administration and maintains certain key data around system approvers and

the hierarchy.

The service will be for in initial 3-year term, with an option to extend for up to a further 2

years, with services commencing in August 2024.

The aim of the procurement is to outsource the following key activities of the current service,

which include but are not limited to:

• processing monthly payroll including payment, costing, statutory deductions, and reporting, third

party payments and reconciliation for circa 8,300 – 9,000 directly employed Council staff.

• implementing pay changes because of Essex Pay.
• managing the payment of allowances to circa 75 members and other office holders per month
• administering pension contributions and other pension scheme administration for Council staff

only

• undertaking pensions statutory reporting and record corrections for Council staff and maintained

schools’ employees.

• system administration tasks on the current Council IT system including and managing system

upgrades.

• managing the organisation structure within the system
• updating changes to the workforce including starters, leavers, and changes
• managing absence including leave, sickness, and statutory leave
• correcting errors such as over and underpayments
• payroll information for the Council’s in-year forecasting of its financial position and in

developing future years’ budget models

• undertaking financial end of year activity
• managing employee queries relating to the above

and all other activities required to deliver the requirements set out in the Council’s Service

Specification for this requirement.

The current payroll runs monthly for payment in advance on 23rd of each month for the whole month or the closest working day prior – this is required to be continued in the outsourced service.

In scope services and out of scope services are set out fully within the detailed Service

Specification published for this tender. We are seeking a Contractor that can and must operate

within our existing systems and set up by accessing our current platform to manage the on-going

payroll and pension activity including elements of system administration.

The Council has considered this procurement in relation to the Transfer of Undertakings (Protection

of Employment) Regulations 2006 (the Regulations). The Council’s view is that those Regulations

apply to the transfer of activity envisaged by the proposed award of a contract for these services.

Application of the Regulations is a matter of law and Bidders are therefore advised to seek their

own independent legal advice on whether or not the Regulations apply. The current in-house Council team is composed of circa 29.66 FTE split between various teams:

Payroll management 18.65

Systems Administration 5.51

Pension Administration 5.50

There will be a requirement to provide appropriate pension provision which would usually entail the

preferred Bidder providing continued access to the current Local Government Pension Scheme by

achieving admitted body status of the Local Government Pension Scheme for any transferring

employees. The requirements for any such pension provision (or

alternative) is set out in Schedule 5 of the published contract for this tender.

The indicative contract value set out in this notice are for a 5-year contract with some minimal

flex for potential contract variations during the term but there is no guarantee of the extension

or any variations. Bidders are referred to Schedule 3 of the contract for this tender and the

guidance and instructions issued with the pricing matrix to ensure they fully understand what is

and is not permitted for this contract. The Council will not award inflation uplifts at any point

during the term.

The Payroll and Pensions Administration Service may provide opportunities for the Council to add to the services during the term where the Council needs or wishes to give effect to changes required to optimise, streamline or otherwise improve the services and/or arising from devolution and/or local government reform arrangements and/or shared services arrangements between the Council and other organisations. The actual contract value of the contract may therefore be in excess of the published value.

The award criteria referenced in II.2.5 includes the applicable weightings:

• 35% - Price/Commercial
• 60% - Technical/Quality
• 5% - Social Value

and using the published evaluation criteria in the tender documents.

The tender is subject to minimum scores on some of the quality questions and to maximum

caps on price as set out in the published tender documents.