Invitation to Tender for the provision of
Payroll Management Services for the
Electoral Commission
Tender Reference No. C0078-KA-FCS
Section Two
Scope of Work
Contents
Introduction
Background
Objectives
Specification
Outcomes
Costing
Variations
Performance Measures
Timeframe
Evaluation Criteria
Annex 1 – Key statistics and volumes
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Provision of payroll management services for the
Electoral Commission
Introduction
1. The Electoral Commission is an independent body set up by the
UK Parliament. It works to:
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Register political parties
Make sure people understand and follow the rules on party and
election finance
Publish details of where parties and candidates get money from
and how they spend it
Set the standards for running elections and report on how well
this is done
Make sure people understand it is important to register to vote,
and know how to vote
2. Aim
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Integrity and public confidence in the UK’s democratic
process
3. Values
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Fair – we are fair in the way we treat each other and the people
and organisations we deal with
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Impartial – we are impartial in our decisions and actions
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Transparent – we are transparent about how we work
4. Objectives
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Transparency and integrity in party and election finance
Well-run elections, referendums and electoral registration
5. The Commission has 151 staff based across offices in London,
Edinburgh, Belfast, Cardiff and in the English regions of Coventry,
Exeter and York.
6. Further information about the Commission’s activities can be found at
www.electoralcommission.org.uk
7. This Scope of work forms part of the tender documentation and where
a tender is successful and results in an award of contract, the
information contained in it will form part of the contract documents for
the organisation awarded the contract.
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Background
8. The Electoral Commission currently has a fully outsourced payroll
management service, producing approximately 151 payslips per
month. Payments are carried out on a monthly basis with support to
staff on payroll matters being provided directly by the service provider.
9. The management and liaison in the Commission will be with Finance,
which has overall responsibility for the service, and Human
Resources, which provides relevant employee data input to the payroll
processing.
10. The existing contract, which has been running for 5 years, is due to
expire on 31 March 2016. As per our procurement policy a new
service provider will need to be appointed via a competitive tender.
Objectives
11. The Commission is in the process of inviting tenderers in respect of
the provision for a fully managed payroll services. The successful
tenderer must be able to meet all our requirements and ensure that all
areas related to the provision of payroll services are catered for, in
addition to:
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Working in partnership and delivering a service that is equally
efficient and effective;
Reducing manual administration and processing costs without
risking levels of service;
Increasing access to valuable management information
contained within payroll data;
Providing an output file for transferring data to General Ledger
Accounts with minimum manual intervention;
Maintaining full history of all employees’ details, history and
payments made;
Providing and maintaining full gross to net on-line payroll
service;
Managing the production of all year-end processing
Providing help desk facilities including advice and guidance as
and when required via named contacts;
Complying with Inland Revenue, Contributions Agency and
Government Legislation;
Making payments accurately and on time;
Interfacing with the Principal Civil Service Pension scheme
(PCSPS) via PenServer;
Interfacing with the Commission’s HR database (CIPHR)
supplied by Computers in Personnel;
Provision of reports and audit information as required;
Quarterly review meetings;
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Providing service and systems that are flexible enough to
accommodate any future expansion and growth within the
Electoral Commission.
Specification
Overall Functional Requirement
12. Effective management of the Electoral Commission’s payroll ensuring
that correct payments are made to all Commission’s employees in
accordance with pay timetable. Ensure that all deductions from pay
are made properly, accounted for and paid to the relevant body on
time.
13. Payroll duties include preparation of BACS files, inputting and
processing of payroll and pensions, maintenance of records, accurate
reporting and statutory returns to HMRC for (tax, benefits, national
insurance, pensions, dealing with queries, payments including
discretionary and statutory, and any other required returns as they
arise).
14. Ensure that a payroll procedure manual (PPM) is available within the
first two months into the contract and that continuous update is
provided throughout the life of the contract. The PPM must be agreed
by Finance and Human Resources before it goes live.
15. Ensure that on an annual basis a payroll timetable for the year is
forwarded to the Commission for review and agreement.
16. The implementation will be required to commence immediately to the
contract commencement date, we require there be sufficient parallel
runs to be undertaken prior to go live on 1 April 2016, to ensure that all
employees are paid on time, accurately and data transfers to general
ledger have been completed.
Key requirements:
17. Receipt of information for the Payroll
18. Act as the Service Provider for the Commission’s Payroll, including
maintenance of employee payroll records.
19. To provide a process/ system for the receipt of all information relevant
to the calculation of the Payroll from the Commission, including
pension payments, overtime, , contractors, pensioners, childcare
vouchers, bonus payments, responsibility allowances, season ticket
loans, statutory payments for sickness, maternity and paternity, payroll
giving and calculate any overpayments and ensure swift recovery.
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20. To action/implement all information supplied by the Commission to
ensure accurate and timely salary payments are made to our
employees.
Calculation of Payroll
21. Arrange and process payments to all payees in accordance with local
pay dates (currently the 30th of the month or earlier date if the 30th
falls on a weekend), paying amounts due into individuals bank
accounts by BACs by the due date.
22. Calculate all types of Sick Pay, Maternity/Paternity Pay and Statutory
Adoption Pay in accordance with Government Regulations. To action
information supplied by the Commission. To integrate all information
via self service/ HR interface when implemented.
23. Calculate revised pay for payees (as appropriate) and update the
Payroll.
24. Implement all changes to Payroll as instructed, following establishment
restructures , job evaluation exercises and annual pay awards.
25. Process annual incremental pay steps where these apply.
26. Calculate all necessary deductions to enable a gross to net pay
calculation to be undertaken for each payee.
27. Capability to deal with the Commission’s spot rate pay structure and
variations as a result of possible TUPE transfer of staff, secondments
etc.
28. Arrange for any under or over payments to be made/recovered in
agreement with the payee and the Commission’s nominated officer.
29. Action and implement any increases to salary as a result of individual
or general % uplifts as and when required .
30. Arrange to pay over all deductions for tax, national insurance, etc.to
the DWP, HMRC, other government agencies and other institutions in
accordance with statutory requirements.
31. Arrange for all other deductions such as those for season ticket loans,
pension scheme contributions, child care vouchers and payroll giving
etc, to be transferred over to the relevant Commission system
following each pay run.
32. Set up new starters and arrange for part-month payments where
starters join during a month.
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33. Process leavers, including issuing P45s in accordance with
instructions from nominated Commission staff.
34. Arrange for the payment of non-salaried contractors paid through the
payroll, including deductions of tax and NI as required.
Statutory and other requirements
35. Notify the administering body for Pensions (as required by that body)
of leavers, new starters and any other change of circumstances such
as redundancy and early retirement affecting pension contributions
and provision via the PCSPS electronic interface Penserver.
36. Produce and distribute HMRC all-statutory notices such as P60’, P45’s
and P46’s (FBI) and complete all statutory returns to regulatory
bodies.
37. Financial Information for Financial system and Reconciliation
38. Maintain and provide the data required to automatically update the
Commission’s FMS General Ledger (CEDAR OPEN ACCOUNTS)
system, identifying cost and expenses codes for individual members of
staff and separate pay elements.
39. Maintain and provide data required to automatically ‘interface’ with the
PCSPS Penserver system operated by the Commission’s Pensions’
Administrator.
40. Provide monthly and annual information of pay and deductions from
Payroll to enable the Commission to undertake a reconciliation with
the General Ledger within 2 working days of the end of an accounting
period.
41. Carrying out effective monitoring of Benefit in Kind (BIK) and reporting
as appropriate.
42. Ensure that employee records are maintained and retained for a
period of 7 years (or handed over to the Commission at the end of the
contract period).
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Reporting
43. Reporting monthly payroll costs and audit reports to management as
per agreed format and ensure secure distribution of the payslips to the
London office address.
44. Holding service review meetings on a monthly basis (for the first three
months) and thereafter on a quarterly basis, or as directed by The
Electoral Commission. To provide statistical information of
performance in advance of each meeting to be reviewed.
45. To provide full details of named contacts of those working on the
Commission payroll and levels of escalation.
Reports
46. All reports should be fully user definable and easily accessible, as well
as have the appropriate and agreed security measures applied at all
times.
47. Reports should be provided on any changes to individual payroll
records including: salary, bank details, address and a monthly report
on gross to gross changes.
Provision of Payslip and Helpdesk
48. Arrange for each payee to be provided with or have access to a
confidential payslip before or on the actual pay date at the latest. To
provide duplicate information as and when required
49. Payslips will be electronic
50. A small number of no more than 20 payslips will be hard copies
51. Respond to queries from staff and designated Commission Officers on
payroll matters within a reasonable time. Staff of the Commission will
contact your payroll officers directly with any queries in the first
instance.
52. Handle any queries relating to tax and NI relating to the Commission’s
payroll from HMRC.
53. Provide access to, and liaise with, the Commission’s internal and
external auditors, as required.
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Future options for Delivery
54. Capability to deal with any future mergers with other Public bodies,
with same system.
Other Key Requirements:
Payslip Details
Each payslip should at least give details: Employee name and address
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Pay date
Payroll reference/employee number
Payroll month
Employer
Directorate
Payments method i.e. BACS
Tax code
NI number
NI code
Annual salary
Hours per week
Monthly basic pay
Any other payments i.e. responsibility allowance, overtime,
season ticket loan, special bonus, etc…..
Total payments
Monthly deductions i.e. Tax, NI, Pension deductions, student
loans, child care vouchers, season ticket loan, payroll giving
Total deductions
Bank details
Cumulative such as total gross to date, tax gross to date, tax
paid to date, employee NI to date, employer NI to date,
employee pension contributions to date, employer pension
contributions to date, pensionable pay this period/year (i.e.
month/to date)
Monthly net payment
Contacts for tax and payroll queries
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Payment Method
55. All payments will be made quarterly and in accordance with the
Commission policy and are via BACS only.
Payment Dates
56. The payroll processing must follow agreed timetable and ensure the
timely payment of monthly employee salaries. This should include
preparation of:
a) Main payroll processing timetable;
b) Supplementary processing timetable;
c) Third party payments processing timetable.
57. Monthly payroll–to be paid on the last working day of each month,
except December when payment is made on the last working day
before Christmas.
Payroll Procedure Manual
58. The PPM must include how the service provider will address the topics
below, explaining what are the Commission and service provider’s
responsibilities on each item. This is not an exhaustive list and other
items may be added as appropriate.
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Enquiries, correspondence, helpdesk and escalation
System security
Starters and leavers
Amendments/changes
Payroll processing
Third party payments (e.g. HMRC, PCS, Pension providers)
Manual payments/advances
Season ticket loans
Overpayments
Maternity leave
Courier Service and payroll control checks
Annual pay award
Payroll control and output
Interface with other systems (general ledger, PenServer, HR
database etc)
Payroll reconciliation (PAYE, employers’ and employees
national insurance, Tax Credits, GAYE, CSA, Attachment of
Earnings Orders, AVC’s, pension, loans, child care vouchers,
reimbursements, all statutory payments
Tax year end
Archiving and retention of records
System development and enhancement
Change management
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Outcomes
Overall Service Outcome
59. All authorised payments are made without exception by the pay date
and targeted to be 100% accurate based on the information provided
for the payroll system.
60. All statutory deadlines for payment of payroll deductions and the
completion of returns to government and associated regulatory bodies
are met.
61. The provider will demonstrate that they have appropriate quality and
performance management systems in place to deliver a service to
meet the quality requirements consistently.
62. The contractor will indemnify the Commission for any claims for the
repayment of bank charges incurred due to late payment of any
employee(s) salary(s).
63. Suitable disaster recovery and business continuity procedures in place
to ensure, a continuous quality service provision.
64. That Commission and personal data are received and stored securely,
so as to prevent any unauthorised access or use of data.
65. The system used by the service provider must be able to interface with
the Commission’s General Ledger (COA system), HR database
(CIPHR system), HMRC and PenServer. In addition, it must have
some level of flexibility to enable interface with other systems, should
in the future the Commission decide to change any of its current
systems.
Payroll management expected outcomes
66. Outcomes:
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PAYE employer’s registration
Payroll setup
Ongoing amendments/starters/leavers, including calculation of
back dated payment and pay steps (salary increase due to
performance appraisal or length of time working for the
organisation).
All payroll calculations including statutory payments/deductions,
attachments of earnings, pension contributions and loan
management
Reporting and pay advice printing
PAYE/NI and pension contributions paid by BACS
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Journal voucher configured to match account codes
Completion of P45/P46 and other Inland Revenue forms
Year-end P14/P60 printing
Completion of year-end P35 form
Management and continuous reconciliation of Inland Revenue
payments
Support and advice on all aspects of payroll management
Liaison with Inland Revenue and Contributions Agency
inspectors
Participation in statutory inspections
Payslips production
P11D’s and employee expenses
Payroll Procedure Manual
Reporting and performance monitoring
Provision of ad-hoc information as required such as pension
totals
Costing
67. Costing should be on a per wage slip production basis (exclusive of
VAT), and have the ability to be increased or reduced as required to
reflect the changing staff numbers. It is anticipated that staffing
numbers may reduce in light of the current economic situation.
68. It should also include payslips delivery charges in reference to the
small number of hard copies which may be required (no more than 20
payslips) to the London office address.
Variations
69. The contract will allow for the increase and reduction in Payroll
provision in line with the increase or decrease in the number of
employees in the Electoral Commission.
Performance Measures
70. The following performance indicators will be used to measure
successful contract delivery. Targets and timescales may be
discussed with the service provider following contract award.
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The supplier relationship
Quality of the service provided
Right first time for service
Delivery to requirements
Timely delivery
Customer satisfaction
Reporting
Pricing and costing
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Financial stability
Overall capabilities
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71. The following performance indicators and targets are mandatory and
will apply throughout the life-time of the contract.
Performance Indicator
The payroll to be processed to the prescribed
deadline
Payroll BACs listing within 5 working days of
payroll payment date
Monthly payroll processing errors
P45’s are posted to home addresses within 2
working days of the payslip delivery day.
(Proof of delivery should be provided)
Pay awards are processed within 5 working
days of notification
P60’s are dispatched within 2 working days of
the end of April
All requests for processing changes are
carried out within 10 working days of official
notification
All telephone or e-mail enquiries
acknowledged within 4 hours of receipt
All written enquiries are answered in writing
within 3 – 5 working days of receipt
Service Conditions and Payroll Background
within 5 working days
Target
100%
100%
First check =
98% accuracy
Second check =
100% accuracy
100%
95%
100%
100%
95%
95%
95%
72. In addition to any other relevant issues, the following topics should
form part of the discussion at the review meetings:
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Performance of the service provider in accordance with agreed
service performance indicators and specification
Operational issues arising and planning in relation to the
preceding month(s)
Service complaints
Developmental and Improvement issues
Payroll Procedure Manual ongoing review
Change Control requests
Review of Authorised Signatories
Update on queries and types of enquiries
73. Performance reports covered in paragraph 71 for quarterly meetings
must be sent 5 working days prior to the meetings. Monthly
performance reports must be sent no later than 10 working days from
month end.
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Timeframe
74. We anticipate working to the timetable outlined below.
Date
23/12/15
19/01/16 at 17:00
20/01/16 – 22/01/16
25-27/01/16
29/01/16
29/01/16
01/02/2011 provisional
01/02/2016 - 05/02/2016
08/02/2016 – 31/03/2016
01/03/2016 – 31/03/2016
01/04/2016 - ongoing
01/04/2016
Action
Invitation to tender
Closing date for submission
Evaluation of tenders
Presentation for short-listed tenderers
Notification to suppliers of outcome result
Contract Award
Contract Commences
Introductory meeting and setting out working
plan
Employee data collection and running of parallel
payroll
Provision of training for Finance and HR staff
“Go live” with the new payroll system
Implementation Payroll Procedure Manual
Contract Duration
75. The contract will commence on 1 February 2016 and be for a period of
three years ending on 31 March 2019. The contract will have the
option to extend for a further two years period, subject to satisfactory
performance and mutual agreement between both parties.
Evaluation Criteria
76. The criteria by which tenders will be evaluated are set out in the Invitation to
Tender Document – READ ME FIRST. These criteria are designed to identify
the most economically advantageous tenders. They fall into four broad
categories as follows.
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Service delivery
Timescale
Management, supervision and resources
Cost
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Annex 1 - Key Statistics and Volumes
Current Payroll Numbers
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Monthly Paid staff
151
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