Supplementary written evidence submitted by Atos
Further to the evidence I gave at the session on 13 June and subsequent correspondence received from the Committee’s staff, I am writing to provide further information on the following issues:
Due diligence activity on PIP
I can confirm that there were extensive conversations with the Department before contract signature where they scrutinised and challenged our proposals to ensure that the plans supporting these were robust.
This oversight continued on a regular basis throughout the period between contract award and implementation, where we were challenged by the Department on the detailed progress in implementing our plan, including on matters such as the final selection of supply chain partners.
This close scrutiny continued beyond implementation – and indeed remains an ongoing feature of the management of the PIP contracts, which we operate in a fully transparent manner. It was because of these mechanisms that we and the Department were able to identify that there were challenges with the early implementation of PIP assessment delivery and agree actions to remedy these, which were ultimately successful.
On estate specifically, the Department places a requirement on all estate used for the delivery of PIP assessments that it is accessible and meets the requirements of the Equality Act 2010. We pass the same requirements onto our supply chain partners and work closely with them to ensure they deliver on these. Meanwhile, the Department carries out a rolling programme of site visits to our estate to allow them to check that the various requirements placed on us have been and continue to be met.
On the wider point of the supply chain partners referenced in our original tender documentation, our former Chief Executive Ursula Morgenstern wrote to the Committee on 28th March 2014 addressing this in detail.
I am afraid I cannot respond in any further detail on the Department’s due diligence processes, as beyond those aspects that involved Atos directly, this is not something we had sight of.
Atos’s pension fund deficit
As at 31 December 2017, our most recent accounting data records that the aggregate deficit in relation to the Atos UK pension schemes is €87m.
This deficit is not uncommon for a business of our size in the current economic climate. Atos has agreed recovery plans to address the deficits with the trustees of its schemes. Details of these recovery plans have been submitted to the Pensions Regulator. The plans require Atos to pay contributions each year into its schemes in order to address these deficits.
Key Performance Indicators, RAG ratings and contract awards
I also wanted to take this opportunity, further to part of the discussion at the evidence session on 13 June, to provide some additional information on Strategic Suppliers’ RAG ratings, contract KPIs agreed with government and how these relate to contract awards.
As I outlined in oral evidence to the Committee, Atos has had a RAG rating of green since August 2015.
Given the large number of KPIs which exist across Atos’s contracts with government and consequently the scope for variation in the performance on individual KPIs on a month to month basis, we believe that a holistic approach to determining RAG ratings, incorporating other evidence (e.g. intelligence gathered from departments) is most appropriate.
In terms of how RAG ratings impact on decisions relating to contract awards, we believe that there should be some consideration on the overall RAG status of a supplier, weighted relatively, during the procurement process. Of course, if a supplier has any critical issues relating to and / or impacting their overall corporate viability or solvency, then these should also be given due consideration.
Philip Chalmers, Senior Vice President, Public Sector and Health