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Exit/Service Transfer
Exit/Service Transfer
Liability
DBS’s pleaded case on breach relies on Clauses 3.1-3.3 and 4.1-4.3 of Schedule 2-11. The particulars of breach at paragraph 112 of the Amended Defence and Counterclaim contain 3 allegations relating to planning (pursuant to Clauses 3.1-3.3): the provision of non-compliant STPs, the failure to discuss and resolve STP issues or provide revised versions twice a year (paragraphs 112.1-112.3). Paragraphs 112.4 to 112.6 relate to what might be called ‘execution’ (pursuant to Clauses 4.1-4.3): failure to provide assistances to migrate the Services to a Replacement Contractor, failure to act reasonably during the Exit and Transfer Arrangements, and failing to co-operate with DBS upon exit and transition.
No case was advanced by DBS in its Written Closing Submissions relating to the execution allegations. The focus of DBS’s case had narrowed to deficiencies in the STP planning document, and, in particular, Version 0.9 of the STP which existed as at July 2018. An STP was not in fact agreed between the parties until December 2019, which was v0.18.
Clause 3 of Schedule 2-11 sets out what the STP had to contain.
‘3. SERVICE TRANSFER PLAN
Where required by the AUTHORITY, no later than three (3) months after the Effective Date, and thereafter as specified in paragraph 3.3 of this schedule, the CONTRACTOR shall prepare a Service Transfer Plan (STP) for review by the AUTHORITY. The AUTHORITY shall review the STP within twenty (20) Working days of receipt from the CONTRACTOR and shall notify the CONTRACTOR of any suggested revisions to the STP. In this respect, the AUTHORITY shall act neither unreasonably, capriciously nor vexatiously. Such suggested revisions shall be discussed and resolved within ten (10) Working Days. The agreed STP shall be signed as approved by each party.
The STP shall provide comprehensive proposals for the activities and the associated liaison and assistance that shall be required for the successful transfer of the Services, including the following details:
proposals for the identification and transfer of documentation providing details of the Services, including the format and structure in which it is to be provided;
proposals for the identification of all Services;
proposals for the identification of all leases, maintenance agreements and support agreements utilised by the CONTRACTOR in connection with the provision of the Services, together with details of the relevant lessors and contractors, the payment terms, expiry dates and any relevant novation and/or early termination provisions;
proposals for the identification and return of all AUTHORITY Furnished Items in the possession of the CONTRACTOR;
a detailed summary identifying the owners of title and risk in all the Services and AUTHORITY Furnished Items following transfer of the Services;
proposals to enable the AUTHORITY or the Replacement Contractor to recruit suitably skilled personnel;
proposals for the training of key members of the Replacement Contractor’s personnel in connection with the continuation of the provision of the Services following the expiry or termination (howsoever arising) of this Agreement charged at rates agreed between the parties at that time;
proposals for the granting of licences to use all software (including the Software) necessary for the AUTHORITY’s receipt of the Services and the provision of copies of all related documentation;
proposals for the transfer of all AUTHORITY Data then in the CONTRACTOR’s possession to either the AUTHORITY or a Replacement Contractor, including:
3.2.9.1 an inventory of all AUTHORITY Data;
3.2.9.2 details of the data structures in which the AUTHORITY Data is stored, in the form of an agreed data model together with information on other data structures in which the AUTHORITY Data could be stored;
3.2.9.3 proposed transfer methods, both physical and electronic; and
3.2.9.4 proposed methods for ensuring the confidentiality, integrity and availability of the AUTHORITY Data on transfer,
proposals for providing the AUTHORITY or a Replacement Contractor copies of all documentation:
3.2.10.1 used in the provision of the Services and necessarily required for the continued use thereof, in which the Intellectual Property Rights are owned by the CONTRACTOR; and
3.2.10.2 relating to the use and operation of the Services;
proposals for the methods of transfer of the Services to the AUTHORITY or a Replacement Contractor;
proposals for the assignment or novation of all Services, leases, maintenance agreements and support agreements utilised by the CONTRACTOR in connection with the performance of the Services;
proposals for the secure disposal as appropriate to the security classification of any redundant Services and materials;
proposals for the supply of any other information or assistance reasonably required by the AUTHORITY or a Replacement Contractor in order to effect an orderly hand over of the provision of the Services; and
proposals for the transfer of all CONTRACTOR Equipment to either the AUTHORITY or a Replacement Contractor, including:
3.2.15.1 a register of all CONTRACTOR Equipment;
3.2.15.2 proposed identification and transfer methods, including the point at which risk and title in all CONTRACTOR Equipment shall transfer;
3.2.15.3 a detailed summary identifying the owners of title and risk in all the CONTRACTOR Equipment on transfer of the Services.
The STP shall be reviewed and updated by the CONTRACTOR. In this regard, the CONTRACTOR shall provide a revised version of the STP to the AUTHORITY on or before 31 July and 31st January each year (or more frequently as may be agreed between the parties). The revised STP shall be reviewed and agreed in accordance with the provisions of paragraph 3.1 of this schedule.’
It is relevant that the extent of TCS’s obligation to carry out the obligations pursuant to Schedule 2-11 and the STP were not unlimited, as set out in Clause 10.1:
‘The CONTRACTOR shall provide resources of sufficient skills and experience to carry out the activities required to fulfil the CONTRACTOR's obligations under this schedule 2-11 and the Service Transfer Plan. In order to fulfil such obligations the CONTRACTOR shall make full use of staff allocated to the provision of the Services (at no additional cost) and, further, shall provide at no additional cost to the AUTHORITY up to 60 man days of additional resources to carry out any activities which the CONTRACTOR is not ordinarily obliged to provide in the course of the day-to-day provision of the Services. Any additional resources required by the AUTHORITY from the CONTRACTOR in order for the CONTRACTOR to fulfil its obligations under this schedule 2-11 and the Service Transfer Plan shall be provided by the CONTRACTOR upon the request of the AUTHORITY and may be charged in accordance with the charges set out in schedule 2-3 (The Charges and Charges Variation Procedure).’
The analysis from the IT experts in relation to this issue is limited. Dr Hunt, in support of the claim, identifies in general terms that none of the versions prior to v0.18 provided the comprehensive proposals required by the Agreement, but there is no analysis of the individual elements which formed the central complains DBS identify in its pleadings or sought to elicit from the evidence at trial.
Ms Wooller, the consultant employed by DBS from August 2018 onwards as Programme Director (on the basis of a specification produced at v1.5 on 11 January 2018) gave evidence for DBS and was generally critical of the service plans and what she saw as a lack of engagement on the part of DBS. Some part of the costs of retaining Ms Wooller are included in DBS’s financial claim as referred to further below. Her criticism of STP v0.9 is, however, largely at a general level and to the extent it provides any detail on the particular breaches amounts (in paragraph 13) to an endorsement of the comments which had been submitted to TCS by DBS at the time (‘the v0.9 comment spreadsheet’). These comments are the same comments as were then included in the spreadsheet which passed between the parties and to which DBS responded. I consider those comments specific to the breaches alleged below.
In Closing, DBS assert that TCS failed to include in STP v0.9 (or any earlier version) comprehensive proposals for:
The identification of all Services (3.2.2);
Enabling the recruitment of suitably skilled personnel and/or training members of the replacement personnel in connection with the continuation of the provision of the services (3.2.6 and 3.2.7) i.e. knowledge transfer;
Providing all documentation to a replacement contractor (3.2.1 and 3.2.10);
The identification of all leases, maintenance agreement and support agreements in connection with the provision of the services (3.2.3)
Providing any other information or assistance reasonably required by a replacement contractor (3.2.14)
Its pleaded allegations specific to paragraphs 3.2.9 and 3.2.12 were not pursued.
- Heading
- CONTENTS
- IntroductiON
- The Factual Witnesses
- Expert Evidence
- Programming Experts
- Forensic Accounts
- The Parties Submissions
- Principles Applicable to Issues of Construction
- The Defendant’s Obligations and Responsibilities
- Clause 15
- Clause 9.5 which states
- Clause 14.5 of Schedule 2-6 which states
- The Delay and Notice Provisions
- Clause 7
- Conditions Precedent: Clauses 5 and 6
- Conditions Precedent: the authorities
- Clause 5.6
- Clause 6
- Clause 8
- Limitations of Liability
- A single or multiple caps?
- The Delay Damages cap under Clause 52.2.5
- Is TCS’s claim for loss of anticipated costs savings excluded by Clause 52?
- Compliance with Clause 5.3, Agreement and Estoppel Introduction
- Express Agreement
- Estoppel
- Introduction
- R1 B&B Delays
- Mr Britton’s First Analysis
- Mr Britton’s Second Analysis
- Conclusion on Mr Britton’s Analyses
- TCS’s submission based upon Mr Jardine’s analysis
- Responsibilities for Delay on the ‘Infrastructure’ Critical Path
- R1-D
- Compliance with Notice Provisions
- Analysis of Delays
- Up to August 2017
- From August 2017 to 19 September 2018
- Analysis
- Failed to confirm its desired functional scope of R1 Disclosure in relation to the Customer-to-Business portal and Accountable Officer’s Update Service functionality. Such confirmation was a prerequis
- Failed to make available an end-to-end test environment for the Interactive Voice Response system
- Failed to agree upon a data migration approach, without which the Claimant could not complete the build of a data migration environment so that anonymised data could be made available for testing
- Failed to ensure that relevant external stakeholders were available to participate in Final Systems Integration Testing
- Partial Termination
- TCS’s Claims
- Non-Manpower Costs
- Anticipated Cost Savings
- Summary of TCS’s Delay Claim Recovery
- DBS’s Claims
- Delay Payments
- R1-B&B Delay
- Disclosure Scotland Extension Costs – Item 1 of the Updated Schedule of Loss
- Loss of Anticipated Savings – Item 3 of the Updated Schedule of Loss
- R1-D Delay
- R0 Licence Costs – Item 4 of the Updated Schedule of Loss
- R0 Hosting and Infrastructure Costs - Item 5 of the Updated Schedule of Loss
- R0 Technology Refresh – Item 6 of the Updated Schedule of Loss
- R0 N-1 Sustainment Costs – Item 7 of the Updated Schedule of Loss
- R0 Maintenance Costs – Item 8 of the Updated Schedule of Loss
- Savings
- Introduction
- Quality-related Obligations
- Good Industry Practice and Defects
- Digital by Default Standards
- Section 71
- The Basics Portal
- Section 73
- The Barring Portal
- Section 75
- Section 76
- Barring Portal: Loss of productivity - Item 11 of the Updated Schedule of Loss
- LPF Portal
- Siebel Useability Issues
- Redaction
- Document naming, bundle creation and performance
- Adobe Licence (Item 20)
- Document Storage (Item 21)
- Other B1 Barring Quality Issues
- Scan on Demand
- Special Characters
- Letters
- Item 24 : Loss of Efficiency Claims arising out of R1 Barring Quality/Useability Issues
- N-1 Sustainment Costs
- Causation and Loss
- Exit/Service Transfer
- Identification of all services (3.2.2)
- Knowledge Transfer (3.2.6 and 3.2.7)
- Section 95
- Providing all documentation to a replacement contractor (3.2.1 and 3.2.10)
- The identification of all leases, maintenance agreement and support agreements in connection with the provision of the services (3.2.3)
- Providing any other information or assistance reasonably required by a replacement contractor (3.2.14)
- Causation and Loss
- The Security Incidents
- The Charges Variation Dispute Introduction
- Issue 1: How the amount of an ‘over-recovery of the Forecast Revenue’ (Clause 2.8.4) or ‘under-recovery of the Forecast Revenue’ (Clause 2.8.5) is to be measured
- Section 104
- Issue 4: How Clause 2.8.5 of Schedule 2-3 applied to Volume Based Service Charges in Service Year 5
- Issue 2: Whether the Predicted Volumes for Basics in Service Year 4 were 1,000,000 (TCS’s case) or 320,374 (DBS’s case)
- Conclusion on Volume Based Service Charge
- Conclusions