715995495-TN · UK public procurement notice

It is considered that this contract can be awarded under Section 41 of the Procurement Act 2023, in conjunction with the direct award justification on the grounds of additional goods and services in Section 7 of Schedule 5.

The Authority tendered for a new HR and Payroll System to be implemented under a new operating model. This new model was to move from an on-premises hosted system to a new solution hosted on the MOD Cloud. A procurement process commenced on 30 March 26, under notice 2026/S 000-029335. The tendering activity resulted in a failed procurement and the procurement process was terminated on 19 May 26, by notice 2026/S 000-045736.

There is insufficient time to conduct further competitive procurement and implement a new system without significant and intolerable risk to the continuity of the HR and Payroll capability. This risk is the inability to pay MOD staff which would breach employment law, international agreements which govern employment of local staff, and impact the operational output of Defence activities. The Authority took into consideration the time that would be required to conduct market engagement on the new requirement, competitive procurement activity, and the necessary implementation and testing period for the new services. Further, proceeding to change supplier without a sufficient implementation period would expose the Authority to the risk of incompatibility between the current and replacement solution resulting in technical difficulties likely to impact the capability.

To maintain the current capability, it is necessary to continue the provision with Zellis UK Ltd with the award of a new interim contract for two (2) years (with a one (1) year option period for contingency) while a future solution is developed.

It is the Authority’s intention to procure a long-term HR and Payroll system to function within the new operating model. This will include extensive preliminary market engagement to support the definition of requirement, identify a robust timeline for transition, and engage potential capable suppliers. The Authority is intending to publish a UK2 Preliminary Market Engagement Notice early in 2027.