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ACCEPTANCE PROCEDURE
To be read in conjunction with the Pathway Acceptance Paper
dated 9 November 1998.
Acceptance of NR2 is measured by the successful completion of the 24 Acceptance
Specifications, with no other criteria.
This means:
a)* Acceptance Specifications must all be signed off by 18" December 1998.
b) Once signed off an Acceptance Specification cannot be reopened.
c) Nothing outside the Acceptance Specifications has any relevance in deciding
whether Acceptance has been achieved.
The Acceptance Tests relevant to each Acceptance Specification are being carried out
progressively from 11 October 1998. As each Acceptance Test is carried out, issues
will be raised and dealt with so that they are resolved quickly, and not left to be dealt
with at the end, when all of the Acceptance Tests have been carried out. Acceptance
of the whole system will occur when all of the 24 Acceptance Tests have been
successfully carried out (with no more Acceptance Incidents than the number agreed),
and Acceptance is final and cannot be reopened afterwards (i.e. in relation to NR2+
functionality). -
Acceptance is therefore not dependent upon the completion of Live Trial. It may
occur before completion of Live Trial. Completion of Operational Trial means ~Y
achievement of Acceptance and completion of Live Trial.
National Rollout commences on completion of Operational Trial. The plan is that
Operational Trial will be completed in July 1999.
On completion of Acceptance of NR2, the Authorities relinquish their rights of
termination related to Acceptance.
For this purpose we must define NR2 as follows:
Automated Payment Service (APS)
Electronic Point of Sale Service EPOSS)
Order Book Control Service (OBCS)
Payment Authorisation Service (PAS)
Card Management Service (CMS)
Benefit Encashment Service (BES)
POCL Infrastructure Service.
4
4
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NB: The Acceptance Specifications for PAS and BES contains tests for multi-benefit
functionality which will be undertaken as part of the Acceptance of NR2. Therefore
BES and PAS would be accepted for ALL benefit payments, not just Child Benefit.
NR2 does not contain On-Line Enquires (OLE) or Soft Extended Verification Process
(Soft EVP).
OLE is covered by CCN 124 which was signed on 21* August 1997, and, subject to
timely agreement on the CAPS 3.5 Interface Specification (Change Request C92
received on 9 November 1998), will be delivered as an increment to NR2 by end
March 1999. OLE will be tested jointly with CAPS on delivery, released when the
tests have been successfully completed and then put into service by mid September
1999. OLE cannot be tested and put into service any earlier as it has to interface with
CAPS Release 3.5, targeted for release into joint testing by the end’of March 1999.
Although it would be possible to start multi-benefit roll out without OLE (ICL have
offered additional help desk facilities to assist in this), and noting that OLE was not
included in the original Related Agreements, it is fair to say that without OLE multi-
benefit rollout in any significant quantity could not be supported.
Soft EVP is not part of NR2. It is the subject of an Agreement to Agree. ICL
submitted CCN243 on 20" April 1998 to introduce a contractual base-line for design
and development of the Soft EVP facility.
As part of the “Corbett Review”, PA Consulting produced with the parties a We dons-
programme plan in which the date for delivery of Soft EVP was predicated on
signature of CCN243 by the Authorities by 30” October 1998. To date this has not
occurred.
Soft EVP is desirable for multi-benefit payments, but not essential. Its main use is to
enable DSS to target fraud on a variable basis.
Currently a version of EVP (‘Release 1c EVP”) is in service as part of Release 1c in
204 Post offices and works successfully. No incidents of fraud have so far been
detected. Release 1c EVP (updated and improved) is part of NR2 and will be subject
to Acceptance as part of Acceptance of NR2.
Soft EVP (if CCN243 had been signed ori the due date) would have been delivered as
part of NR2+. It would have been put into service with the rest of the functionality in
NR2+, after joint testing with the Authorities, upon completion of the release
authorisation process. .
NR2+ consists of:
a) modifications and enhancements to existing NR2 functionality
b) Soft EVP (if CCN243 is signed in time for development to be completed)
©) the use of smart cards for Automated Payments
d) * support of Public Switched Telephone Network connected post offices.
ote
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There is no Acceptance for NR2+ in the same way as NR2 because the consequence
of any particular facility in NR2+ not passing through the release authorisation
process is that it will simply not be put into service (unless and until it passes) and
NR2 functionality will continue to be used uninterrupted.
Guarantee Payments
If we look at the Related Agreements, they.refer to Release 1 and Release 2 (Schedule
A07 of the Authorities Agreement).
Release 1 is defined as the release of the software to be tested in the Operational Trial
period. NR2 (as it is now called) equates to Release 1, and this has been agreed in
correspondence between the parties (see attached ICL letter dated 12 November 1997 -
and PDA reply dated 22 January 1998). For all practical purposes Release 2 equates _~
to NR2+.
NR2 does not contain OLE or Soft EVP as these are dealt with separately as shown
above. NR2 does however contain two additional DSS facilities included at the
request of the Authorities namely emergency payments and stop notices (on-line
CAPS) and temporary tokens.
For these reasons Acceptance and Live Trial of NR2 will complete Operational Trial
for the purposes of the Related Agreements: Thus, the guarantee payments should run
from the completion of Operational Trial (Authorities Agreements, Schedule A06
para. 10.2 for POCL and para. 16.2 for DSS).
There is no concept in the Related Agreements of a separate live trial for multi-
benefits. The Authorities have sought previously in correspondence to impose this as
acondition for agreeing the programme of testing NR2. ICL is working to the
possibility of a separate live trial on a without prejudice basis, but has not accepted
this proposal formally, because of the commercial implications (see: attached letters,
in particular Horizon’s letter of 23 July 1998 and ICL’s letter of ig September
1998).
ICL’s position is that NR2 delivers multi-benefit payment functionality and that it
should be compensated for the reduction in transaction volumes caused betause BA
requires further testing (not contemplated in the Related Agreements) before it is
happy to roll them out.
Conclusion on Acceptance Procedure and Guarantees
Given the above, ICL’s position can be summarised as follows:
1. Acceptance of NR2 and completion of Live Trial of NR2 constitutes
completion of Operational Trial for the purposes of the Related Agreements.
2. Acceptance of NR2 means the Authorities will relinquish their termination
rights related to Acceptance.
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3. OLE, Soft EVP and each facility in NR2+ will be jointly tested and each item
will be put into service when the relevant tests for it have been successfully
completed through the release authorisation process.
4. Guarantee payments by POCL and BA to commence as stated in the Related “Irice fee dlawen, I
Agreements i.e. on completion of Operational Trial. ’
haat» bevehe vate
Acceptance Incidents . Mowe bee Gener
To be considered in more detail by technical working pary.3 lo<2o-
Release Authorisation
ICL accepts the Horizon position, provided that Acceptance of NR2 is carried out in
the manner described above, and that release authorisation has no application in the.
process of Acceptance.
Appointment of Expert
ICL continues to propose Peter Copping of PA Consulting. ICL is content to accept
his decision as final and binding on the issues as set out in ICL’s proposal of 9"
November 1998.
ICL would observe that the Related Agreenients do provide for binding expert
determination so that the Authorities could agree to this on a blanket basis, if they
were so minded, without any significant change to the Related Agreements. The only -
alternative to such expert determination would be litigation (which in the event would
actually largely turn on technical expert evidence in any event) and such litigation
would benefit none of the parties. Even if the resulting dispute did not cause
cancellation of the Related Agreements there would certainly be a lengthy delay in
determining the issue. ICL is the party which would stand to lose most in these
circumstances, given the huge investment it is being asked to make, and its essential
requirement to start and keep revenues flowing to service the interest on debt, let
alone repay any of the principal sum.
i:
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Pat Kelsey Hl
Head of Procurement Team, BA/POCL :
Third Floor,
Terminal House,
52 Grosvenor Gardens,
London SW1W 0AB
12" November 1997
Contractual distinction between Old Releases 1 and 2, and New Releases 2
and 2 Plus
The PDA Board has asked ICL Pathway to define the precise relationship of New
Release 2 to the releases contemplated in the Agreements.
We discussed this matter recently at CNT and I believe agreed that the following
position applies.
In terms of contractual status, New Release 2 = Old Release 1.
The inclusion of on-line CAPS and temporary token facilities (pulled forward
from Old Release 2, hence the “New 2” designation) means that it is no longer
necessary to show proof of concept capability of these features as required by
CCN105 as condition precedent for Acceptance and roll out on Release le.
An alternative designation could have been “Release 1f’. We agreed that at this
stage it was better to stay with current parlance than to change designations solely
to align terms more closely with the contract.
Old Release 2 (which swept up those Requirements not included in Old Release 1,
eg. CAPS on-line facilities, AP Smart) is now matched by “New Release 2 Pius Pi athey Uta
‘Exarhples. of: catty: forward:fedtures.to; be included i in New Release 2 Plus are DOW tans
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The designation “2 Plus” again anticipates more content than that contracted for.
With DSS requirements substantially fulfilled, more content now means
additional POCL functionality. These can be “Future Basic” products (eg.
EFTPOS), additional products (eg. Logistics Feeder System) and/or re-engineered
products (eg. National Savings). All these examples are currently being
progressed under the Business Requirements Definition process. Their inclusion
is subject to timely sign off by CCN.
The above is, as ever; ‘subject ‘to any .agretmierit to the contrary’ under’Release
-Cotitents Defiiiition iples. Reasons could be to bring any higher priority
reatures forwara or to enable an earlier New Release 2 Plus delivery than would
otherwise be possible.
I would be grateful for your confirmation that this does indeed accord with your
interpretation. . :
Yours sincerely,
Tony Oppenheim
cc. Peter Crahan
John Bennett
Mike Coombs
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Pars
bonaiits
Bonaiite agancy and
FE: Post Office Counters Ltt
‘ Third Floor
Kg F Terminal House
agency 52 Grosvenor Gardens
London SwiwoaB
Tony Oppentcim. .
ICL Pathway Ltd 3
Forest Road *
Middlesex .
TWi3 7EJ .
_ Date Tony,
Contractual Distinction between Release names
‘Thank you for your letter received 16 December (dated 12 November?), I agres tho broad thrust of
the naming conventions you suggest, but we necd to cnsure that thexe is no ambiguity in this.
© CCNIOS set out the position that Release 1 was that set of finctionality that was to bo,tested in
the Live Trial - at that time Release le.
© CCNIOS only recognised Release 2 in terms of demonstrating the on-line finetionality and
support ofmultiplo benefits during the Live Trial period (ready for CAPS 3), and in modifying the
acceptance criteria provisions to recognise that while a high seventy deficiency could now occur
in Release 2, it would contribute to the “10 fault thresiold” rather thm be grounds for termination
Hence I agree'that “New Release 2” is broadly equivalent to ths ofd Release 1, but obtaining
acceptance through live operations rather than by a demonstration.
“New Release 2 phis” however is somsthing of an emalgem - including elements of the original
requirements for which we would wish to retain cur existing acceptance provisions (ic. the 10 high
or medinm frults), but may also include eloments of POCL requirements beyond those originally
contracted for. ‘This may require some redraffing of the acceptance schedules when the new release
structure is adopted through Change Control, and I would suggest that thero may be a need to
distinguish otiginal and new requirements in tho release cantents definition for “New Release 2 plus”.
aunt Ragieered i Cian
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ry
~~
ICL PATHWaY
Mr Mike Coombs
ICL Pathway
Forest Road
Feltham
Middx
TW13 7EJ
23 July 1998
Horizon Replan
Further to our mesting of last week, please find enclosed 2 copy of the paper
outlining a basis for the Horizon replan. { believe that the paper puts forward a clear
and viable approach to taking forward the Programme which benefits all parties.
In the paper you will sce that we have tried to address aspects related to both the
delivery plan as well to present an overail approach to acceptance. I would welcome
your reaction to the paper at your earliest convenience, but would be grateful for a
written response by the 31 July 1998. If you require longer to consider the paper, you
may chose to split your response between the two parts and at Ieast let us have your
reaction to the delivery plan by the above date, so that preparations to mobilise replan
activity can start as soon as possible. 1 would hope that you could then respond to the
acceptance aspect by say the 5 August 1998,
My thanks for your co-operation in establishing a positive way forward and I trust this
will enable us to make solid progress in the coming months.
Yours sincerely
Dave Miller
Horizon Programme Director
; Gooz
eB
Fp
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Benefits Agency Post Office Counters Ltd
Without Prejudice and Subject to Contract
HORIZON PROGRAMME
REPLAN SUMMARY
23 July 1998
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The replan set out in this document is proposed at a time
when the final outcome of ministerial consideration of the
Treasury-led Review of the Horizon Project is not yet
known. It must be emphasised, therefore, that this document
is without prejudice to the parties. It is subject to contract
and not intended to affect existing contractual obligations or
create new contractual obligations unless and until agreed
by the parties in accordance with the Change Control
Procedures. In particular, the Sponsors wish to make clear
that their support for this replan should not be deemed or
construed to commit them to any particular position in
relation to the Treasury-led Review (or ministerial
consideration of it) or to preclude them from taking any
particular course of action as a result of the Treasury-led
Review (or ministerial consideration of it).
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« Horizon Replan - Without Prejudice and Subject to Centract
Contents
1. MANAGEMENT SUMMARY 4
2. INTRODUCTION 10
3. THE REPLAN APPROACH AND RATIONALE 1
4. PROPOSED ACCEPTANCE APPROACH 13
5. STAGE 1 - POCL SERVICES AND CHILD BENEFIT 16
§. STAGE 2 - MULTI-BENEFIT SERVICES 20
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1. Management Summary
4 Introduction
This document sets out the proposed replan for the delivery of the Horizon
Programme on behalf of both Sponsors (POCL and Benefits Agency). It specifically
covers the [CL Pathway delivery of:
* the new POCL infrastructure and services (including BES, EPOSS, and APS)
together with card payment facilities on behalf of the Benefits Agency (PAS and
CMS) - these are referred to collectively as the ‘NR2’ release
* supplementary facilities which are necessary to complete the contracted
requirements and enable a network-wide rollout (the *NR2+" release).
It also addresses the required interfaces with the Benefits Agency systems through an
agreed plan with their CAPS Programme.
The focus of the replan has been on the approach and the timetable for the delivery
and implementation of the new services.
1.2 Benefits of Proposed Approach
The Horizon Programme Office proposes a fresh approach in this teplan which will to
a significant extent ‘decouple’ the Horizon and CAPS uctivities. In principle this will
provide a two stage approach whereby the ro!lout of POCL infrastructure and services
will commence initially with Child Benefit card payments only, followed in the
second stage by the rollout of the card payment service for multiple benefits. By
separating the two aspects of rollout (i.e the ‘rollout of post offices’ from the ‘rollout
of benefit card payments’), this approach will give the management within che
Sponsoring organisations more flexibility to manage their individual responsibilities
while minimising constraints upon each other.
In summary therefore the decouple approach will:
© reduce the complexity of the jcint management and integration of activities
* provide the earliest achievable date for Pathway to rollout services to the POCL
offices, with an estimated date of 5“ July 1999.
support the CAPS work programme for integration of the Feeder Benefit Systems
© build on the proven experience of Child Benefit card payments, and follow this by
the rapid rollout of the ‘multi-benefit’ service as soon as it is proven
enable a staged acceptance of the Pathway service, with contractual atceptance, to
include the delivery of NR2+, in February 2000.
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? ACCEPTANCE
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1.3 Plan Summary
The overall replan is divided into two overlapping main Stages:
* POCL Services/Child Benefit
© Multi-benefit Stage (to include JSA, IS and Pensions)
The dates provided are based on the Sponsor’s current best view but will be subject to
the agreement of detailed plans.
1.3.1 Stage 1 -POCL Services/Child Benefit
This stage results in the commencement of rollout of the POCL infrastructure and
services in July 1999 together with the support of Child Benefit payments in every
office as it goes live on Horizon. The main steps in this stage are as follows:
Pathway delivery of NR2 into Model Office 3 August 1998
Model Office testing 10” August to 18" December 1998
Start joint Model Office testing with CAPS From 7* September 1998
End-to-End testing 10* August to 18" December 1998
Start Migration of the 204 ‘1c’ offices to NR2 4th January 1999
(contingency 13" January 1999)
Start POCL Live Trial (child benefit) 8th February 19S9
(contingency 22™ February 1999)
Acceptance process complete for Stage 1 19" June 1999
(contingency 2" July 1999)
Start POCL/Child Benefit rollout From 5* July 1999
Given the scale end scope of the processes which need to be proven in Model Office
and End-to-End testing the plan seeks to provide a ‘contingency window’ at the end of
these stages. If they complete satisfactorily by 18” December, with Release
Authorisation by Christmas, then the Migration step can proceed on 4* January.
However a contingency provision is made for testing to continue until 11" January if
necessary, with Release Authorisation by 15th January. ‘This would result in
Migration starting on 18° January. The POCL Live Trial, which follows 5 weeks after
the start of migration, is scheduled to starz therefore on 8" February, or 22 February
if the contingency is required . A decision on whether this contingency window is
needed will be made by the end of October 1998 when the rate of progress on testing
will be clear.
The Live Trial is scheduled for 17 weeks finishing on 19° June 1999. A 2 week
contingency period is provided before roll starts on 5" July 1999. If neither the testing
contingency nor the POCL Live Trial contingency are required then rollout could
commence at the earlier date of 7* June 1999. A decision on this earlier start for
POCL office rollout will need to be taken on or about 1" April 1999. This date will
allow sufficient evidence to be assessed from the Live Trial while giving at least §
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weeks to manage the lead in to the post office rollout. The Benefits Agency card
rollout could be brought forward to the 7" June 1999 only if notice is given by the end
of October 1998, Otherwise the planned date for card rollout will remain as the
5" July 1959,
On the other hand unforeseen problems, whether of a business or technical nature,
could be found in the Trial (which is the reason for undertaking it). There is inevitably
some uncertainty as to how long it may take to resolve such problems and therefore
the 5" July could slip. Through careful monitoring and timely action the Programme
will however strive to ensure the rollout does commence by 5th July 1999.
Section 5 explains this stage in more detail.
1.3.2 Stage 2- Multi-Benefit Stage
The Multi-benefit service will run on the same NR2 software platform as the Child
Benefit release but will utilise the more compiex processing associated with, for
example, urgent stops and payments. It will also require integration with the three
additional Feeder Benefit Systems for JSA, IS and Pensions,
The Multi-benefit stage therefore begins with a ‘Pre-proving’ activity prior to entry to
the full Model Office environment in order to give initial confidence that these
transaction types can be correctly processed. This work will commence towards the
end of this year from 1* December.
The main steps in Stage 2 are as follows:
Pre-proving phase December 1998 to March 1999
Joint Model Office 12 April to 1* Octover 1999
Multi-benefit Trial starts 13® September 1999
All benefits into Trial By end November 1999
Full acceptance of NR2 February 2000
Multi-benefit card rollout starts From 28" February 2000
By February 2000 several thousand offices will already have been rolled out from
Stage 1 and there will be an existing base to which cards can be deployed. Card
deployment for JSA, IS and Pensions can therefore take place as quickly as practical
to their offices, subject to maintenance of an acceptable level of service and then
follow the continuous office rollout .
The Related Agreements with Pathway also includes delivery of the NR2+ software
release. This will provide additional functionality to support a network wide
deployment (notably On-Line Enquiries and Soft EVP - Extended Verification
Procedures) as well as additional POCL services such as AP Smart. The final design
of NR2+ functionality is currently being completed which will be followed by a
formal development plan to be agreed by alll parties. Based on discussions to date with
Pathway, the Sponsors believe that it is reasonable to expect that NR2+ could be
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delivered into joint sponsor acceptance testing from 1" October 1999. This would be
advantageous in that the acceptance processes for Multi-benefit and NR2+ could be
tun concurrently to complete in February 2000. Confirmed NR2+ development and
testing and deployment dates do however need to be established by more detailed
planning and with the agreement of all parties.
Section 6 explains this stage in more detail.
1.4 Proposed Acceptance Approach
‘The proposed approach to acceptance is described below in terms of the scope and
constraints for acceptance at each stage. The conditions for acceptance at each stage
are described in more detail in Section 4.
Step 1 - Following Successful Live Trial of NR2 POCL Services and Child
Benefit Card Payments
* Approval to rollout POCL infrastructure and NR2 services to an unlimited number
of offices;
¢ Agreement to deploy Child Benefit cards to all rolled out offices as quickly as
possible;
¢ Agreement to rollout OBCS to all offices where there is a confirmed business case.
The following constraints on acceptance will apply :
« No income guarantees payable at this stage;
* Acceptance related termination rights withheld until multi-benefit system proven in
Live Trial.
Step 2 - Following Successful Live Trial of NR2 POCL Services with Multi-
benefit Card Payments
* Contractual acceptance of NR2 - a staged acceptance with final acceptance to come
swith the delivery of NR2+;
° Acceptance related termination rights foregone (acceptance now irrevocable for
NR2 - but service level and other termination rights obviously apply) ;
* Continuation of rollout of POCL infrastructure and Child Benefit;
¢ Rollout ofa second benefit to up to 4000 offices as quickly as possible;
¢ Two further benefits introduced into live environment,
Income guarantees will still not apply at this Step.
Step 3 - Following Successful Model Office Test Of NR2+.
* Final acceptance achieved of NR2/NR2+;
2 Caveats removed on benefit rollout;
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© All benefits rolled out to all offices as quickly as possible.
It should be noted that while the acceptance process logically falls into the above three
steps, it is desirable that the Multi-Benefit capability and NR2+ be delivered for
acceptance at the same time in February 2000. This would result in Steps 2 and 3
being combined in practise with a simplification of the overall process and the
constraints on Step 2 being of less significance.
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2. — Introduction
This document sets out the proposed replen for the delivery of the Horizon
Programme on behalf of both Sponsors (POCL and Benefits Agency). It specifically
covers the ICL Pathway delivery of:
¢ the new POCL infrastructure and sexvices (including BES, EPOSS, and APS)
together with card payment facilities on behalf of the Benefits Agency (PAS and
CMS) - these are referred to collectively as the ‘NR2’ release
© supplementary facilities which are necessary to complete the contracted
Tequirements and to enable a network-wide rollout - referred to as the ‘NR2+
release
The replan activity was initiated by the Sponsors in conjunction with Pathway in April
1998. The replan has been conducted under the new management arrangements for the
Programme which replaced the PDA from 1* April, and hes been led by the Horizon
Programme Director and the Release Management Team.
The focus of the replan has been on the approach and the timetable for the delivery
end implementation of the new services. It has also considered the broad implications
that will arise for the contractual acceptance of the ICL Pathway services, The replan
work has not however entered into contractual renegotiations at this stage, nor has it
addressed any changes to the contracts. All parties agreed that the primary objective
of the replan activity was to produce a realistic and sustainable plan for delivery
against which contractual and commercial terms could then be renegotiated as
appropriate.
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3. I The Replan Approach and Rationale
By early April 1998 it was clear that the ICL Pathway plen (version 3) te deliver NR2
by October 1998 was no longer sustainzble. Initial work on the replan sought to
establish a number of tactical options which would allow the anticipated slippage to
be accommodated with minimum impact to the overall Horizon schedule and the
CAPS delivery plan. As work proceeded however it became clear that the tight
coupling of the Horizon and CAPS Programmes was creating difficulties in agreeing
detailed plans, for example in such areas as Model Office testing. While sharing
similar objectives for these tests, the Programmes had different expectations and
drivers for their duration. They also faced different pressures to align their plans with
the broader objectives and activities in their separate businesses.
In addition the replan noted that the Treasury Review had projected a delivery date of
January 2000, but that this was based on a continuation of the past expericnce of the
Programme in attempting to manage both the highly complex and integrated technical
deliverables and the differing commercial interests within the PFI contracts.
Key factors for the Benefits Agency and CAPS were hat the replan reflected their
experience of testing, and that there was a supportable schedule for the integration of
their Feeder Benefit Systems with CAPS, and the follow on rollout of card payments.
‘These factors pointed to an estimated acceptance date for the Pathway services of
January 2060 with both POCL office rollout end card payment rollout starting
subsequent to this date,
For POCL there was a business pressure to initiate the rollout of the new automated
platform to its offices from the earliest realistic date in order to support not only the
requirements of the Benefits Agency but alse those of other clients, as well as
enabling them to exploit new business opportunities.
While not addressing commercial issues per se, the replan work takes into account the
commercial assumptions within the PFI contracts by allowing rollout to commence as
soon as the Pathway solution has been proven.
In recognition of the above factors, the Horizon Programme proposed an alternative
approach which will to a significant extent ‘decouple’ the Horizon and CAPS
activities within the joint programme. In principle this will provide a two stage
approach. Stage I provides the rollout of POCL infrastructure and services with the
support of Child Benefit card payments only, followed in Stage 2 by the rolleut of the
card payment service for multiple benefits. The decouple straiegy will create a more’
manageable testing approach, divided between a ‘Horizon-led’ single benefit stage
and a *CAPS-led” multi-benefit stage. By separating the two aspects of rollout i.e the
‘rollout of post offices’ from the ‘rollout of benefit card payments’, this approach will
give the management within the Sponsoring organisations more flexibility to manage
their individual responsibilities without constraining each other.
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In summary therefore the decoupled approach will:
reduce the complexity of joint management and integration of activities.
¢ provide the earliest achievable date for Pathway to rollout services to the POCL
offices, with an estimated date of 5* July 1999.
© support the CAPS work programme for the integration of the Feeder Benefit
Systems.
© build on the proven experience of Child Benefit card payments, to be followed by
the rapid rollout of the ‘multi-benefit’ service as soon as it is proven.
* enable a staged acceptance of the Pathway service with final acceptance, including
the delivery of NR2+, in February 2000.
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* Horizoa Replan - Without Prejudice and Subject to Contract
4. Proposed Acceptance Approach
The replan now envisages a further split of the NR2 services into two releases. ‘The
first supports the rollout of POCL services and a benefits payments service dealing
only with child benefit card payments. The second release supports a multi-benefit
(e.g. JSA, IS, Pensions} card payments service. The NR2 releases must still be
followed by the NR2+ release, although as explained in Section 1 it is proposed that
this should be delivered at the same time as the NR2 multi-benefit release.
Nevertheless for the purposes of setting out a clear acceptance process for the replan a
three step procedure is set out below in order to correlate with the three identified
releases,
The proposed approach to acceptance is described below in terms of the conditions,
scope and constraints for acceptance at each stage.
4.4 Acceptance Step 1 - After Live Trial of NR2 POCL Sorvices and Child Benefit
Card Payments
Conditions for acceptance:
« Release authorisation given for NR2 POCL Services and for Child Benefit card
payments only;
@ Proof of concept of mobile configurations
© Successful Live Trial of Child Benefit;
» Agreed measures of progress on multi-benefi testing and on development of NR2+
functionality.
Scope of acceptance:
© Approval to rcllout POCL infrastructure and NR2 services to an unlimited number
of offices;
. © Agreement to deploy Child Benefit cards to all rollout offices as quickly as
' possible;
* Agreement to rollout OBCS to all offices where there is a confirmed business case.
Constraints on acceptance:
¢ No income guarantees payable at this stage;
© Acceptance related termination rights withheld until muiti-benefit system proven in
Live Trial,
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4.2 Acceptance Step 2 - After Live Trial of NR2 POCL Services and Multi-bonefit
Card Payments
Conditions for acceptance:
¢ Release authorisation of NR2 for multibenefits;
© Successful Live Trial of multibenefits;
“« Acceptance of the approach to fallback transactions for Carded Casual Agents;
* Proof of Concept of NR2+ and an agreed timetable for its delivery.
Scope of acceptance:
¢ Contractual acceptance of NR2 - a staged acceptance with final acceptance to come
with the delivery of NR2+;
¢ Acceptance related termination righis foregone (acceptance now irrevocable for
NR2);
© Continuation of rollout of POCL infrastructure and Child Benefit;
¢ Rollout of a second benefit to up to 4000 offices as quickly as possible;
© Two further benefits successfully introduced into live environment,
Constraints on acceptance:
* Income guarantees will not apply.
4.3 Acceptance Step 3 - Aftor Mcdol Office Test Of NR2+.
Conditions for acceptance:
© NR2+ delivered with all contracted functionality;
¢ NR2+ proven in Model Office (Live Trial not required),
@ Release authorisation of NR2+.
Scope of acceptance:
Final acceptance achieved;
© Caveats removed on benefit rollout;
+ All benefits rolled out to all offices as quickly as possible.
Constraints on acceptance:
¢ None.
The rollout of cards as quickly as possible must obviously not compromise the
integrity of the Benefits Agency’s service to customers. The anticipated rate of rollout
will be agreed within the appropriate commercial forums .
There are items which are contractual requirements beyond NR2 and NR2+ such as
mobile configurations, and broadcast and messaging services, which are beyond the
acceptance process described above and the scope of this replan.
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Horizon Replan - Without Prejudice and Subject to Contract.
5. Stage 1 - POCL Services and Child Benefit
This Section sets out a more detailed description of the activities and dates in Stage ]
of the replan, It covers:
CAPS JSA Personal Details (PDr) Model Office
Horizon NR2 Model Office with Child Benefit
Joint NR2 Model Office with Child Benefit
End-to-End Testing
Release Authorisation
Migration
POCL Live Trial
Acceptance of NR2 Child Benefit
POCL Rollout
eeoneecvecee
5a CAPS JSA PDr Model Office (8" June to 24" August 1883}
As previously agreed under the replan, the CAPS Model Office for JSA commenced
on schedule on 8* June 1998, supported by the required functionality from the
Horizon environment, This Model Office will enable the loading of personal details
for JSA to the CAPS database but will not test card payments. It is planned to
complete this Model Office on Friday 21 August. However CAPS wish to provide a
two week contingency period at the end for targetted testing of any outstanding faults.
The Benefits Agency have therefore requested that a Joint NR2 Model Office with
Horizon should not start before 7° September to allow this werk to complete
unhindered. It will also give them time to finalise the detailed test plans for this
critical phase.
5.2 Horizon NR2 Model OfficelChild Benefit (10" August to 4™ September 1998)
The Pathway and Horizon schedules have been based on starting the NR2 Model
Office on 10" August 1998. Te move to the proposed date of 7" September to align
with CAPS would therefore mean a delay of 4 weeks. Pathway and Horizon therefore
plan to run a first ‘pre-proving’ cycle between 10” August and 4” September without
CAPS direct involvement. This will allow POCI. functionality to be tested but using
existing sets of Child Benefit data to simulate the CAPS interface,
5.3 Joint NR2 Model Office with Child Benefit (7" September to 18 December 1958)
‘The joint Model Office with CAPS involvement will start on 7” September. Although
a joint approach, Horizon will lead in the management of this Model Office as it is
primarily supporting their requirements. They will therefore determine such activities
as restarts and cycle resets. Given the first ‘pre-proving’ cycle it may be that only wo
more full six week cycles will be required:
Cycle 2 - 7* September to 16" October
Cycle 3 - 19" October to 27" November
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Contingency cycle - 30" November to 18" December
Release authorisation will be arranged for before Christmas 1998.
However if'a full fourth cycle is required a contingency period is provided for until
11" January with releese authorisation by 15" January 1999.
5.4 End-to-End Testing (10 August to 18" December 1998)
In parallel to Model Office another set of specific tests will be run in what is termed
the ‘End-to-End’ environment. These tests cover special cases such as variable cash
account periods, temporary and permanent office closures, and types of system
failure. Horizon will manage two cycles for this activity which is primarily concemed
with POCL processes:
Cycle 1 - 10" August to 31" October
Cycle 2 - 2" November to 18" December.
It should be noted that additional testing activities will be taking place during this
period, although the primary focus will be on Model Office and End-to-End. For
example Pathway will be finalising some technical and security tests and Horizon will
be undertaking some preparatory tests of the Reference Data which will used in the
live environment.
55 Release Authorisation (target 18" December 1998, contingency 15" January
1989)
Following successful completion of Model office and End-to-End a Release
Authorisation process is required to endorse the service for use in the live
environment. A number of preperatory steps will be taken as the testing phase comes
to an end. If, as discussed above, the Model Office can be successfully completed in
the first three cycles then the date for Release Authorisation to be completed will be
before Christmas 1998. If a fourth cycle is required then Release Authorisation wili
take place in the week commencing 11" January 1999.
It must be noted that this release authorisation date assumes that the necessary
acceptance tests have also been completed within the proposed timescale (where these
are over and above what will have been demonstrated in Model Office and
End-to-End Testing).
5.6 Migration (4" January to 5" February 1999, contingency 18" January to 19"
February)
‘This phase is concerned with the migration of the existing live 204 post offices
running Release Ic to the new NR2 software. Based on the rate of progress in the
testing phases a decision will be made by the end of October as to whether this will
start on 4% or 18* January 1999, The Migration phase will involve the following
activities:
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© Initial pilot week in 6 offices
© Migration of the remaining offices over 2 weeks
© ‘Data centre migration’ to link the offices to the new ‘host’ NR2 software enabling
full ‘go-live’ (weekend of 30" /31* January or 13°/14" February)
The Migration plan allows a week after the ‘data centre’ migration weekend to ensure
the service is stable before starting to add the additional offices for the Live Trial.
The plan also needs to show the date for the second data centre to be switched on for
operational services. It is proposed that this is scheduled for the weekend of 13°/14"
February, or 27°28" February 1999 if migration docs not start until 18" January. It
should be noted that the second data centre is not required to start or to support the
volumes in the POCL Live Trial. This date is therefore not or the ‘critical path’ for
the start of Live Trial as it would only be zequired in the unlikely event of a major
physical disaster at the first centre. A gap of two weekends is allowed between the
, data centre migration weekend and the weekend when the second data centre is
brought on stream.
5.7 POCL Live Trial (February to June 1989)
The POCL Live Trial is intended to prove the full operation of the Pathway services
and the POCL and Benefits Agency processes in the live environment. The start date
will be either 8" or 22 February 1999. The Child Benefit card payments for these
new offices will be scheduled to start from 22™ February.
The POCL Live Trial comprises the following main steps:
Take-on of an additional 100 offices - 3 weeks
“Core” observation period - 6 weeks
Completion of reconciliation cycles for each week -4 weeks
.Report production and ‘acceptance decision’ - 4 weeks
The Stage I ‘acceptance decision’ will be confined to NR2 running POCL services
with the child benefit card payments services. See Section 4.
The ‘core’ observation covers office processes, staff and customer reaction, and
weekly accounting processes. The length of the reconciliation processes between
POCL and its clients means that up to 6 weeks may be necessary after each weekly
cash account period to ensure that all significant checks have been carried out. It is not
expected to be necessary however to monitor the completion of this activity for all 6
weeks of the ‘core’ observation period, as sufficient evidence of the Pathway/Horizon
processing is available carlier in the cycle. The reconciliation phase is therefore set at
4 weeks. This results in a 17 week elapsed period. This will give an acceptance date of
the 19* June 1999, A 2 week contingency period is provided before the planned
national rollout date of 5* July 1999. If neither the testing contingency nor the POCL
Live Trial contingency are required then rollout could commence at the earlier date of
7* June 1999. A decision on this earlier start for POCL office rollout will need to be
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teken on or about 1* April 1999. This date will allow sufficient evidence to be
assessed from the Live Trial while giving at least 8 weeks to manage the lead in to the
post office rollout, The Benefits Agency card rollout could be brought forward to the
7* June 1999 only if notice is given by the end of October 1998, Otherwise the
planned date for card rollout will remain as the 5° July 1999.
6.8 POCL National Rollout (Target date 5" July 1999)
The target date in the replan for start of National Rollout is 5° July 1999. Child
benefit card rollout to offices is also planned to commence from 5" July. It is expected
that the card rollout will ‘catch up’ with installed offices by the end of July and from
August 1999 Child Benefit cards will match the POCL rollout, subject to normal
order book renewal cycles.
The current contracts propose a rapid ramp up of office rollout in the first month
followed by a sustainable ‘beat rate’ of 300 offices per week. Further evidence will be
tequired from the Live Trial to give more assurance that this rate is sustainable by all
the parties concerned. Firm dates for training and take-on wil! normally need to be
given to post offices 12 weeks before their ‘go-live’ date, although the office
‘installation’ work can be carried out relatively flexibly in advance of these dates,
Active management will therefore be required of the schedules for offices in the early
stages of roliout until the pattem of successful deployment is established and the
optimum ‘beat rate’ is proven. Given a start date of 5" July 1999, and allowing for the
Christmas period, a beat rate of 300 would result in up to 6000 offices being installed
by the end of the year, while a beat rate of 200 would give up to 4000 offices.
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6. Stage 2 - Multi-Benefit Services
This Section sets out a more detailed description of the activities and dates in Stage 2
of the replan. It covers:
© Pre-proving of multi-benefit transactions
. © Joint NR2 Model Office for Multi-Benefit
© Multi-benefit Trial
© Acceptance of NR2 Multi-Benefit
¢ Card Rollout
© Delivery of NR2+
64 Pre-Proving of Multi-Benefit Transactions (December 1998 to March 1929}
Between December 1998 and March 1999 Horizon and CAPS will undertake some
initial testing of the more complex transactions which are not normally required. for
Child Benefit payments but are essential for other benefits, namely JSA, IS and
Pensions. Urgent stops and payments are examples of these transactions. This testing
will need to take place in an environment which can be run independently of the Child
Benefit Model Office which will be taking place during part of this period. This
testing can be conducted in @ more flexible way than under a formal Model Office,
with tess rigid cycle definitions, but wi!l nevertheless provide a necessary degree of
confidence in the multi-benefit capabilities of NR2 prior to entry to joint Model
Office.
6.2 Joint NR2 Multl-Benefit Model Office (12° April 1999 to 1" October 1599)
This Model Office will comprise four cycles of six weeks (based on a 17 day logical
model and a ratio of one logical to two physical days), The cycle start dates are
therefore:
Cycle 1 - 12" April 1999
i Cycle 2 - 31% May 1999
Cycle 3 ~ 12" July 1999
Cycle 4 - 23 August 1999
The Mode! Office will include all four of the major benefits, which is the main reason
for providing four cycles in order to allow phasing of their introduction.
It is proposed to start this Medel Office in April 1999 as this will allow the latest
teleases of JSA, IS and Pensions to be used, as all of these will planned upgrades in
the period up to the end of March 1999. The CAPS 3.5 performance release will also
be available for use within Model Office by the beginning of April; prior to going live
in May/June 1999.
It should also be noted that if there is a slippage in-Stage 1 testing with Child Benefit
this will not impact Stage 2 pre-proving or the Model Office unless it extends beyond
12 April 1999.
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6.3 Multl-Benefit Trial (September 1999 to February 2000)
The Multi-benefit Trial will start with JSA in September 1999 followed by a phased
introduction of IS and Pensions. The exact dates for bringing these into the Trial
requires to be confirmed with the Feeder Benefit Systems, but the aim is to have them
all running live in the Trial by the end of November 1999. For pianning purposes the
proposed dates at this stage are:
JSA - 13" September 1999
IS - 8 November 1999
Pensions - 29" November 1999
64 Acceptance of NR2 Multi-Benefit (February 2000)
Following successful completion of the Multi-benefit Trial the acceptance decision is
planned to take place in February 2000. The terms of this acceptance are covered in
Section 4.
65 Card Rollout (from February 2000)
A card rollout trom February will provide time for the necessary training activity to
start after Christmas 1999 and give the required six week: !ead-in time prior to card
payments going live. Given that several thousand post offices will be installed by this
date there can be a rapid rollout of cards for all the live benefits from this date, with
the only constraints being the rate of card production and the need to maintain an
acceptable level of service to Benefits Agency customers.
66 Release NR2+
The contents of this Release have been agreed in principle, although a number of
detailed issues and requirements are currently in the process of being resolved. A
baselined development plan will be produced once this work is complete. This plan
will need to take account of the overall approach set out in the replan and the impact
this will have on Pathway resources in 1999. The Sponsors believe however, based on
previous discussions with Pathway, that a delivery date for NR2+ ino joint Sponsor
acceptance testing of 1* October 1999 is 2 reasonable target at this stage. Acceptance
could then be achieved in February 2000. The rerlan therefore proposes these dates,
while recognising that confirmation will be required from detailed planning and with
the agreement of all parties. .
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YO 39 AVE vosuw van ULL ¢
31* July 1998
Mr David Miller
Programme Director
POCL
” King Edward Building
King Edward Serer
London
ECA 1AA
Deer Dave
HORIZON REPLAN
Thank you for your letter of 23" July and the artached paper “Horizon
. .. Programme Replan Summary”. First may I say thar ICL Pathway
- welcomes the paper with its approach to establistiing a Horizon" -
programme where interdependencies beeween POCL, BA and ICL
Pathway are realigned to enable the earliest possible start to National
Rollout, and we also appreciate the work undertaken by you and your
team in enabling such a joint POCL/BA paper to be produced.
‘With regard to your requests for responses by certain dates, please take
this leer and what follows as an initial ICL Pathway reaction to the
Programmatic content of the paper. ._ Having reviewed the paper itis
evident that it raises many questions of fundamental importance to both
ICL Pathway and the successful implementation of the proposal.'l am on
leave Monday and Tuesday next week , on my return, I will phone you to
discuss how best we take this forward.
On the commercial/acceptance aspects of the paper ICL Pathway’s _
position is that it is neither appropriate or possible to resolve these in
isolation from the outcome of the ministerial consideration of the
Treasury-led Review of the Horizon Project. In addition they introduce
changes to the contract, and specifically CCM 165, that will need
introduction via the formal Change Request process. As 2 result you will
appreciate that at this time we are unable to state when ICL Pathway will
be able to formally respond in full.
However, we have the following preliminary observations as to
commercial implications, each of which is likely to be an issue:
mipc/036Jul.98 ° 1
ICL Pathway Ltd
Forest Road
Feltham
26 Fevsoury Scuare
Uoroon £624 105
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Delayed irrevocable Acceptance from NR2 to the point ac which
multibenefits are proved in’ live trial: note that the delay to testing
__ thultibenefies is not due to ICL Pathway.
2. The prominence given to Release Authorisation or ‘Pre-proving’: these
are not catered for in the Agreements and appear to duplicate and
overlap with Acceptance.
3. The proposed deferral of Acceptance also defers the point at which the
guarantees begin to apply. It is not clear whether it is intended that the
guaranteés which would apply after the multibenefit live tial would be
as currently in the Agreement.
4. The proposed duration of live trial is greacer than that in either . &£
Schedule BO7 of the Autiiorities Agreement or that agreed under ren
. CCN105: this is a matter for change control.
5. The insertion of various contingency periods into the plan, extending
timescales. .
6. The stams of the 4000 offices is unclear - is it still proposed that this
be some kind of roll out limit?
7; The notion of OBCS offices where there is a confirmed business case is
* a new one: the Authorities have confirmed that they want OBCS in all
offices except those in Northern Ireland.
8. CCN1OS is-clear thar the roll out rare post Acceptance remains 300 a
week: any reduction is a matter for change conizol- and not sithply
subject to an ‘assurance’ assessment.
Our initial response to the Programmatic-content of the paper is as
follows:
1._We support the decoupling of the BA plan for CAPS from POCL and
ICL Pathway’s plan for Model Office Testing leading to National
Rollout because of the impact of delay on Nati the
aA current Plan for introducing multiple benefits and their
associated requirements for ongoing Model Office testing.
2. Given that the Single Benefit Model Office begins as a POCL/ICL
Pathway Model Office and that its shape as currently defined (ie length
of cycles) was influenced by the now redundant requirement to align
to CAPS Multi-benefic plans we wish to enter (as a matter of urgency)
a dialogue with you as the optimum shape of Model Office testing to
support our joint preparation for a Child Benefit Live Tria! early in
1999.
3. We support the approach of identifying a contingent date for the start
of National Rollout (5* July in your paper) and an earlier date (7° *
June in your paper) where contingency can be unlocked if progress is
sustained as we both intend it to be. However we believe the
following is outstanding between us:
mibcl036Ju1.98 5 2
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a)
b)
o)
Agreement on the approach and timescales for pre-Live
: Trial migration.
An understanding of your criteria for Live Trial, how
success will be measured and the specific activities you will
be undertaking so the necessary metrics can be obtained.
An agreement on how the work being undertaken by our
teams on the overlay of National Rollout preparation on
Live Trial should be taken forward and reflected in the
proposed plan. Plus agreement and inclusion of the
resultant ramp up profile to 300 outlets per week.
Completion of these will enable validation of the above dates taken from
your plan plus the ability to reach agreement on the dates that result.
4. On the Multi benefit section of the Plan we are supportive of the
approach bur we have many questions and areas where we need a
greater understanding before we can assess the impact upon ICL
Pathway.
a)
b)
Py
¢)
The content and conducz of the pre-proving
The nature and implications on ICL Pathway of the Mulu-
Benefit Model-Office
The nature and implications onthe operation of the live
service of the Multi-Benefit Trial.
An understanding of the rationale that leads to the start of
Multi-Benefit card rollout in February 2000 when the plan
would appear to enable an early starc.
I hope the above covers your needs for early feedback. On my return on
Wednesday I’ll contact you to discuss the above and mobilisation of
activity of activity to progress the plan.
Yours sincerely,
Programme Director
mpbel036ul.98
se TA"BORd TWLOL vox
Tartars
Third Floor, Te:
Tel: I
SW1W 0AB
Mr Mike Coombs
ICL Pathway
Forest Road
Feltham
Middx
TW13 TES
‘ 5S August 1993
deer Nedee
Horizon Replan .
Thanks for you reply of 31" July to the “Horizon Programme Replan Summary”. I
have asked Andrew Simpkins to co-ordinate and prepare 2 xesponsc on behalf of the
Sponsors to the points you have raised, We plan to have this with you by 14° August
1998.
I would be grateful if you would confirm in writing by return that ICL Pathway are
now working to the approach and dates set out in the Replan Summary, while we
continue refinement of the plan and agree a way forward on the commercial and
acceptance issues.
I would like to reech a position with you by Wednesday 19% August (prior to the next
Horizon and CAPS Board Mectings) whereby ICL Pathway document their agreement
to the Replan, with the specific commercial end acceptance issues which this raises
iterised for further negotiation. I recogaisc that we will have to take account of the
ministerial consideration of the Treasury-led Review as well, but this will put us in the
position of having aa agreed and recommeaded programme plan on which we would
wish to preceed to deteiled negotiations.
Dave Miller
Horizon Programme Director
cc, Peter Crahan
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06" August 1998
Mr David Miller
Programme Director
‘POCL
King Edward Building
King Edward Streer
London
ECLA LAA
Dear Dave
HORIZON REPLAN I
Responding to your letter of 5% August I wish to confirm that ICL
Pathway are working to the approach and dates, as set out in your
Replan Summary
As you are aware ICL Pathway has continually sought ways of achieving
the earliest start to National Rollout of both the OPS infrastructure and
combination of cards and benefits. We welcome the principle of
decoupling the multi-benefit activity from National Rollout. However, 2s
a result, whilst accepting the dates contained within the Replan Summary
# 2 are a dramatic improvement over those identified by the Treasury ~
“oF Review, we view them as the latest dates we collectively should be
working io. This is obviously subject to sustained progress on the
programme and points two to four oa Programmatic content in my letter
to you of 31* July 1998.
ra
- We will seek meetings with you and your staff to resolve the
programmatic points raised in my letter such that we are able to
document our agreement to the Plan and the. dates it contained by 19”
August as you have requested.
iCL Pathway Ltd
Forest Road
Feltham
mpd/039Aug.98 1
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/ We agree that the specific commercial and acceptance issues should be
clearly identified in readiness for further negotiation. We have now
agreed to discuss these further ar our commercial meeting on the
14" August. ;
Yours sincerely,
Mike Coombs
Programme Director . CL
ec. MrJ.H. Bennett, ICL Pathway
@ "Mr A.E. Oppenheim, ICL Pathway
mjpo/039Aug.98 2
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Mr Mike Coombs
ICL Pathway
Forest Road
Feltham
Middx
TW13 Ed
QO ‘ : 17 “august 1998
Horizon Replan
Following your letters of 517 July I enclose a reply to the points you raised regarding
the Replan proposals. I look forward to your response by Wednesday of this week so
that we can miove forward on the basis ofan agreed programme plan. :
Yours sincerely
Horizon. Programme Director
c.c. Peter Crahan
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HORIZON REPLAN -
RESPONSE TO ICL PATHWAY.LETTER OF 317 JULY 1998
A. General Points
The Sponsors wish to make clear that the-approach they have proposed in the Replan
takes into account Pathway’s previous track record, for éxample in terms of failure to
meet planned dates, and in particular the 5* October 1998 software delivery date for
Nile Release 2.0. despite all milestones having been hit or on target for delivery of
components from CAPS. Therefore the plan incorporates timescales, contingency and _
checkpoints which provide 2 ressonable assurance that such failures will not reoccur.
Our response to a number of your points needs to be taken in this context.
We do not consider it reasoneble to delay progress on all commercial/acceptance
issues until the outcome of the Treasury-led Review. The outcome is likely to propose
a way forward at 2 high level which would not be expected to affect the detailed
commercial end programme points raised in your letter, unless the recommendation is
for a more radical change which would require 2 more fundamental review of the
programme. All parties are legally committed to continue, work in accordance with the
Related Agreements (as amended).
This document is without prejudice to the partes. It is subject’ to contract and not
intended to affect existing contractual obligations dr create new contractual
obligations unless and until agreed by the parties in accordance with the Change
Control Procedures,
B. Commercial and Acceptance Points
1. Irrevocable acceptance and multi-benefits-
A consequence of the Replan is that the acceptance of NR2 is now split over two
stages, Child Benefit and Multi-benefit. It is only at. the completion of the Multi-
benefit Trial that the Sponsors ars in a position-of confidence that the contracted
solution is accepiabie for roll-out of all card payment types. It is therefore not
reasonable for irrevocable acceptance to take place before this point, and it is
inappropriate to describe this as.a ‘delay’.
Indeed the current contractual position on staged acceptance is that full acceptance is not
achieved until the ‘second’ (NR2+) release of contractual functionality has been accepted.
POCL and DSS agreed changes to the contract in the previcus replan that removed the
possibility of failed acceptance because of a single, high severity, fault in the ‘second?
(NR2+) release, but the right to refuse acceptance.of the whole service, and not just the
additional functions in the second phase, because of 10 medium or high severity faults
was retained. Thus, under the present contract, irrevocable acceptance need not be given
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until satisfactory delivery of NR2+. The position tke in the Replan is a concession to
this contractual position.
Therefore, assuming POCL rollout is proceeding satisfactorily with Child Benefit, and
that multi-benefit is proven in a Live Trial, and that the NR2+ facilities have adequate
* proof of concept and an agreed timetable for delivery (i.e. a confident expectation of
delivery in the-near future) then the Sponsors would be willing to give up termination
rights for failure of acceptance at this point.
If, as the Replan proposes, acceptance of Multi-benefits and NR2+ is combined ar. the
same time then the issues around the ‘second’ release and acceptance stage will be
minimised.
‘With regard to your assertion that Pathway are not responsible for the delay in testing *
multi-benefits, as we noted above, the approach: in the Replan takes into account our
experience on delivery to-date. The Replan has not sought to introduce “delays”, but
to set out an overall restructuring of activities that will give confidence that the
Programme can deliver in accordance with contractual obligations to the benefit of all
parties.
2. Release Authorisation and Pre-proving
The Replan is not seeking to give any additional prominence to Release
Authorisation. It hes been part of the custom and practice within the Programme that a
* "formal Release Authorisation is necessary before major new software can be releesed *
from Model Office into the live environment..In addition Requirement 476 covers the
rights of the Authorities to be involved in Release Authorisation separate from
Acceptance. Release Authorisation is required in order to:
(4) ensure that software put into live operation is fit for purpose and will not expose
POCL or DSS to unacceptable financial or performance risks; and
(2) confirm that all necessary systems, processes. and resources ere in place, not just
those in the Pathway domain.
Pathway have been involved fully in this process to date and we would anticipate this
continuing for future releases.
Release Authorisation is therefore separate from the acceptance decision, which is
required to ensure that Pathway’s services are capable of meeting all contractual
cbiigations, and that the Autherities can safely give up their rights to immediate -
termination if Pathway prove incapable of delivering services with this capability.
“Pre-proving’ has been used as a term to’ ideatify the potential for minning selected
multi-benefit tensaction tests, prior to formal entry into che multi-benefit Model
OFice cycles, in order to give all parties some advanced experience of, and confidence
in, their performance. This is seen as assisting the transition from the single-benefit to
maulti-benefit testing stage, reduces the risks of the later and gives a higher guarantee
of achieving the detes for the subsequent Model Office. It is therefore presented as an
opportunity for improvement in the testing strategy. not as a duplication or overlap
within the acceptance process.
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3: Income Guarantees . é
The existing arrangements see income. guarantees applying following delivery of full i
functionality (NR2+) and this condition will not change under the replan i.e. when a z
fully functional NR2+ hes deen delivered income guarantees will begin to apply. if
Clearly, we will need to agree the deployment rate for multi-benefic functionality in &
post offices and the implications for income guarantees, 2
: ES
eeN
4. Live Trial Duration
The Live Trial duration has been based on an assessment of past experience and the
latest estimates of the activities that willbe required. (The Replan has similarly had to
take account of the increased estimates requited for System Testing). :
Sponsors understand that all aspects of the Replan will iltimately be subject to change
control, and do not see Live Trial duration as an issue for this in isolation.
It may be helpful to clarify that the Sponsors now ses ‘Live Trial’ as comprising two ~
phases’ the first.being‘the POCL Child Benefit Live. Trial end the second the Multi-
benefit Live Trial.
5. Contingency Periods
We do not believe that the contingency periods identified in the Repian will have to
result in extended timescales or cause irrevocable delays, What they do provide to a
degree is for the overall plan to be maintained even if progress is not exactly on target
for planned dates, and this approach is fully supported by our expesisace to dare.
6. Limit of 4000 Offices
As stated previously, Sponsors are prepared to’ offer a concession to authorise rollout
of NR2 multi-benefit in advance of the: full contracted functionality becoming
2) available. However in the absence of-all the contracted functionality, for example in
such areas as Soft EVP and online enquiries, the Sponsors are only prepared to
provide. this alleviation for live operation of multi-benefits in 2 maximum of 4000
Offices,
There are potentially other factors that will need sddressing if there is a protracted
petiod before NR2+ becomes available. For example, the more offices that are rolled
out without the AP smartcard products, the greater will be the costs for rewaining, and
provision and removal of temporary APTS.
Note however that this 4000 limit does not apply to the roll-out of the POCL
infrastructure and child benefit card paymenis.
7. OBCS
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Your comments are noted but the Sponsors may wish to make a further response on
this point, “ .
8. Roll-out Rate
The Replan does not propose a reduction in the roll-out rate. While the Sponsors will
work with’Pathway to deliver the contracted rate, we will need to have assurance of it
being delivered in practice. POCL and DSS (and we assume Pathway as well) would
obviously not find it acceptable to continue with plans based on 300 per week that
“consistently failed and caused additional cost and disruption. The Replan therefore
acknowledges that detailed planning and management of the-roll-out is a continuing
activity within the Programme.
con Programme Issues
1. National Rollout Dates
The Sponsors wish to totally refute the inference that any delay in testing multi-
benefits is due to the CAPS Programme. As noted above under Genera] Points the
Replan has been caused by, and hes izken into account, Pathway’s tack record of
delivery to date.
2. Single Benefit Model Office
Discussions -are in-hand with you regarding the shape of this Model Ofiice.
3. Migration, Live Trial and National Rollout
We have now had a meeting with you where we expleined in some more detail the
reasoning in the Replan proposal behind the duration of migratién and the POCL Live
Trial and the criteria that will need to be measured and satisfied. We also covered the
overlay of National Rollout preparation’on the POCL Live Trial, and the. roll out rate
in the context of the remarks already made in section B8 above.
4, Multi-Benefit Plan
Thank you for confirming that you support the Multi-Benefit section of the Replan.
Given the questions you have in this area we would propose a meeting of our
respective planning groups to address them in detail at a convenient time. We
understand that it would be helpful to you if we clarify at this stage.the following key
planning assumptions:
+ both the pre-proving and Model Office phases we would see being zun in 2 similar
environment to thet which iscizreatly being provided for End-to-End testing at the
Horizon end (e.g. links to TH)
* the environment could be provided at Feltham rather than Borough, and with
POCL providing operators
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there would not be a need.to min separate Model Office and End-to-End testing
during this phase but there would be a need to prove POCL accounting
reconciliation
CAPS 3.5 could be implemented without changes to NR2, but will require
integration with NR2+ whea delivered
the multi-benefit Live Trial would be nm in the live environment but with
availability controlled by the issue of appropriate cards not by-software within NR2
a similar number and configuration of offices would be used as for the POCL Child
Benefit Trial
the Sponsors cannot. sec any technical reasons at this stage why the Multi-benefit
Trial and its associated card rollout would impose conswaints on the continuing
rollout of POCL offices.
TOTAL P.e8
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—o THE.
19* August 1998
Mr David Miller
Programme Director
POCL
King Edward Building .
King Edward Streer TNs
London
a Ik
Dear Dave
Be
2 HORIZON REPLAN
{am unable to respond in full to your letter and atrachment of the 17°
August as requested by close of play today. This is due to the
predominantly contractual and commercial nature of the arrachment on
which we are seeking legal advice before responding.
However, there are areas on Programme Issues on which we are able to
respond. These responses are given below using the numbering system
from your attachment.
C2. Single Benefit Model Office :-
The letter from Andrew Simpkins, dated 19 August, concludes
our discussions on the shape of Mode! Oifice. Although we stili
need to review the derail, the approach of four cycles of Model
- Office and three cf End-To-End both targeted to complere 18"
: December is the plan I can contirm [CL Pathway will be working
to. Lalso note the inclusion of a contingency period, in line with
our discussions, up to the 11% January 1999,
C.3, Migration, Live Trial and National Rollout
Tam able to confirm that ICL Pathway will work to your latest
Migration Plan ie:
a) A four week period to migrate existing 1¢ Post Offices and
is) ICL Pathway Ltd
establish the Bootle Data Centre. Pores Road
Feltham
b) Aweek to check the establishment of the link to TIP prior to the Midis TW
introduction of the additional 100 offices Taf
misci04iAug.98 1
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Py A two week period for the introduction of the additional 100
offices with Migration to Dual Data Centre operation at the end of *
the first week.
For ICL Pathway to commit to the derail of the plans we have
discussed in other aceas we need further discussion on:-
a) The use of information gathered during migration in eValuating
Live Trial and hence the formal start date of Live Trial.
b) The criteria used to assess the activity streams you are ¥,
proposing for Live Trial & a
¢) The tigger point, length of preparation process and ramp up
management for National Rollout.
C4. Multi Benefic Plan
The answers given to our questions were helpful in enabling us to
prepare for the meeting you propose. I hereby invite Andrew
Simpkins to arrange such a meeting at your earliest convenience.
T teust that you will find this letter helpful in assisting the Programme to
continue to make progress.
Rs
rs sincerely,
Mike Coombs
Programme Director
mipeicarAug.98 2
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David Miller, Esq.
Horizon Project Director
BA & POCL
King Edward Building
King Edward Street
London EC1A 1AA
18th September 1998
Dear Dave,
©
=
Without Prejudice
This is in response to your letter of 17th August to Mike Coombs regarding the
Replan,.and deals with the contractual matters raised. Mike has dealt with
program related items under separate cover.
We were surprised and disappointed at the aggressive tone of the letter and by
the number of gratuitous and unjustified allegations of fault on the part of ICL
Pathway. You will understand that, muchi as we wish to concentiate on moving
the programme forward on a joint working basis with yourselves, we cannot let
these assertions go unanswered.
As a "general point" (with reference to your section A), we do not accept that
we have a "track record" of failure to meet planned dates in a context where the
other parties have "hit" or been “on target" with respect to their own
obligations. No such context has ever existed for ICL Pathway. In the case of
CAPS, the number of releases continues to grow, and each time that happens,
essential functionality and performance targets are deferred to later releases.
This delay in tu has a knock on impact on the timing of benefit migration to
cards, a matter which is specifically subject to Change Control by virtue of the
Authorities’ own Requirement 974. The “track record” is in fact that these
changes have been done uniiaterally and without regard to the additional work,
lost time and lost income which are the inevitable impacts on ICL Pathway.
Schedule B7 sets out as a programme dependency just one date for CAPS
availability to enable full function testing of the end to end systera. That date is
1 September 1996. At this point, accordingly, the Authorities are about ovo full
years off “target”, with further significant delays apparent from plans declared
by them.
The Ministerial Review process continues to take its course. We expect thai a
significant revision of the commercial framework will be needed to reach a
satisfactory commercial accommodation between the parties. In the meantime, ICL Pathway Ltd
we continue to hold that we should seek to address only those commercial Furest Read
issues which have a direct and immediate bearing on moving the programme ie
forward.
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IN :
Turning to your designated "Commercial and Acceptance Points", we would
comment as follows:
1. Irrevocable acceptance and multi-benefits
Your letter presents the Replan as a given, which necessarily has certain
“consequences”. On the contrary, as your disclaimers clearly state, the Replan
is a proposal which requires both endorsement at the programme level and
agreement as to the commercial implications. For the reasons stated above, we
see the letter as ‘on hold’ pending clear guidelines from the Ministerial
Review. .
The Replan proposes significant shifts in the risk profile which would damage
ICL Pathway and which therefore will need to be addressed in any
renegotiation of terms,
‘The first relates to the delayed introduction of multi-benefits by the DSS.
Multi-benefits were always to have been CAPS enabled from Day One. ICL
Pathway’s NR2 contains multi-benefit functionality today, es indeed does
Release 1c, The architecture makes it indifferent to payment types, which are a
matter for CAPS and the DSS feeder systems. In addition, and at DSS’s
request, ICL Pathway brought forward on-line DSS functionality and
temporary tokens from Release 2 (bcth Drop Down and CCN10S had these
facilities in Release 2) into New Release 2 (hence its new designation). This
‘wes to provide the supporting services the DSS represented to us were
necessary for JSA and IS in particular (DSS’ two top priorities for multi-
benefit) - a new requirement relative to Drop Down and CCN105 versions of
the contract (both of which had these facilities coming on stream in the second
release). Introducing these facilities in the first release cost us time, money and
risk. The only DSS requirements not included in NR2 are on-line enquiries and
“Soft EVP”. On-line enquiries are not supported by the current version of
CAPS. The interface specification for the future CAPS release which will
support on-line enquiries was submitted to us as a Change Request only within
the last month. We have had to reject it in its current form because it seeks to
introduce new requirements for which adequate definition is absent.
Meanwhile, we have agreed to deal with DSS enquiries via the help desk - at
ICL Pathway’s expense. If volumes threaten to overwhelm the help desk, we
have agreed to introduce on-line enquiries as an increment on NR2. As to Soft
EVP, CCN243 has been with the Authorities for approval since 20" April and
remains unapproved today. We have made it clear repeatedly at CNT and
elsewhere that the Authorities’ failure to agree CCN243 is delaying New
Release 2+. The Authorities stance that they must have Soft EVP by a deadline
of their choosing is utterly unreasonable under these circumstances. We
consider that the Authorities are in breach of Schedule C5 (Change Control)
clause 2.2 for unreasonably witholding or delaying their agreement to this
CCN.
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Whatever the reason for DSS now wishing to defer the introduction of multi-
benefits, it is not down to ICL Pathway. Yet the effects are (i) to introduce an
additional strand of testing work (and therefore cost), (ii) to deprive ICL
Pathway of income (iii) to defer the point at which DSS wish to determine
whether it accepts the NR2 system. That point is now delayed until some six
months after roll out has begun, thereby greatly increasing ICL Pathway’s cash
exposure to failed Acceptance.
You characterise NR2 Acceptance as being essentially meaningless. We
disagree. NR2 Acceptance matters because software accepted at NR2 (equating
to the first contractual release) cannot be rejected subsequently, and because
any faults accepted at NR2 Acceptance do not then count towards the
Acceptance threshold of NR2+ (equating to the second contractual release).
Under the Drop Down and CCN105 baselines, some 80% of contracted
functionality would have been tested and accepted at the first contractual
release. This would have left an “allowance” of 10 high/medium severity faults
at the second release to cover 20% of the functionality, with reasonable cure
periods allowed. This position has held true since Drop Dowri; when the
regime for split Acceptance releases was introduced in recognition of the fact
that the large number of agreements to agree and unfulfilled Contracting
Authority Responsibilities made it wholly impractical to introduce 100% of
functionality in a.single release (at-least, not without delaying it indefinitely).
Bringing forward on-line CAPS and temporary tokens into NR2 increased the
functionality to nearer 90%, and; with the allowance of high/medium severity
faults still set at 10, reduced the overall Acceptance risk accordingly. Dropping
not only on-line CAPS and Temporary Tokens but also multi-benefits from
NR2 Acceptance, as your proposal suggests, would reduce the value of pre-
rollout Acceptance to no more than 70% of total functionality. To deny us the
opportunity to secure a more complete Acceptance, when an additional 20% of
functionality is in the product and will have been tested exhaustively (including,
end to end testing with the DSS), is unreasonable.
With respect to your final paragraph, we reject the inference that ICL Pathway
has been solely responsible for project delays, We will not, therefore, accept
that, if the DSS is unready, it should be entitled to delay multi-benefit testing
on this pretext.
2. Release Authorisation and Pre-proving
We have discussed this item and agreed provisionally that it shouid not be a
barrier to progress. This is based on your assurances that you are not in fact
proposing tc add to our existing contractual commitments. Two points should
be made to ensure no misunderstanding of our position.
Requirement 476 talks in specific terms of releases “which are to be
distributed to and subsequently activated within any of the Services". The
Services do not come into effect before Acceptance. Requirement 476 also
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states that “the implementation of any release shall not cause any significant
disruption to Users... [and] shall not disrupt the normal working environment
of Users". This only makes sense in the context of upgrades to an existing
service. It follows that Requirement 476 can only be taken to apply to releases
of software after the conclusion of Operational Trial. It does not justify a
second “Release Authorisation” hurdle for contractual releases which are
subject to Acceptance.
The Authorities are not reliant solely on Acceptance to ensure their
performance interests are met. The contract’s three sets of complementary
safeguards, taken together, represent powerful levers on the contractor.
« Acceptance tests exist to confirm compliance with functional and facility
requirements prior to release;
* Termination review conditions under the Service Definitions limit the
latitude for operational performance variations;
« Remedies are triggered under the Service Definitions for lesser variations in
operational performance. .
To go beyond these would represent “double jeopardy”. Such double jeopardy
.. Was not agreed during the original or Drop Down contract negotiations,(nor
“during CCNI105 discussions) and we have no reason to change our position
now. Neither do we believe that you should feel the need to do so given the
safeguards you already have.
The “custom and practice {of Release Authorisation] within the Programme” to
which you refer may have been appropriate for the interim releases we have
had to date, and we may have agreed to it for that purpose, but that does not
make it a contractual requirement. For a Release Authorisation process to be
introduced into the contract (under change control sponsored by the
Authorities), the relationship between Release Authorisation and Acceptance
would need to be reconciled such as to remove the double jeopardy.
3. Income Guarantees
The guarantee structure is set out clearly in Schedule A0Q6. Guarantees are and
always have been tied te rollout of the physical infrastruciure, without any
caveat or qualilication. This follows the conclusion of Operational Trial end
the commencement of Roil Out (defined term). The guarantee structure did not
change at Drop Down when the split contractual release concept was first
introduced. CCN 105 did not hint at any change in this regard, and certainly
none has becn agreed. Guarantees remain tied to physica! rollout.
The logic for guarantees during Rollout was, I believe, never in dispute. Under
PFI, Rollout places the heaviest burden on the contractor's financial resources
and it is therefore reasonable that the contractor can.count on acommitted
minimum level of income to offset against those cash demands. The argument
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that the contractor’s costs will be reduced because of lower start up activity
does not work. The fact that one of the Authorities may not be ready does not
significantly reduce operationa! costs during the start up period. The additional
costs of testing, rework to align with additional CAPS releases, lost card
production utilisation, phased customer education and potentially re-training
inevitably will add to the aggregate cost.
4, Live Trial Duration
While, again, we take issue with your characterisation of the extended duration
as a reflection of the Authorities’ "fast experience", we remain willing to
discuss a request for testing beyond that required by the Related Agreements.
We understand that the Authorities have assessed the elapsed time requirement
to carry out the activities they now wish to carry out during Live Trial. We
recall similar discussions prior to CCN105. The conclusion is clearly that the
desired process will take longer than contemplated in the contract currently.
That is a proposed change to the schedule which stands on its own. We do not
expect @ separate change request but the impact wili need to be counted as part
of the whole.
We note the “clarification” that not only do the Authorities wish to have an
extended initial Live Trial, but that they in effect wish to have two Live Trials
spanning 2 period of a yeur. The first equates approximately to a “POCL Live
Trial”, success at which qualifies us to commit the Jarge scale Rollout moneys
without any meaningful commitment or Acceptance by the DSS. The second,
as above, is reserved for DSS functionality deferred at DSS’ request. The “DSS
Live Trial” only completes six months after POCL’s, and six months after
commitment to Rollout. The adverse impacts on ICL Pathway are significant
and we again reject the proposition that the Authorities have any right to
demand them.
‘We would point out that the milestone tables in the Authorities’ Schedule B7
effectively set a maximum duration for Acceptance testing in general and the
Authorities’ testing in particular within the framework of the current contract
length.
5. Contingency Periods
Mike has covered this point in his separate letter. We do not take issue with the
need to have contingency within the plan. Our concern centred on reaching
agreement on how it could be utilised. You have provided clarification on this
point, and we are content with that.
It is unclear whether “our experience” (last sentence) is intended to collectively
include ICL Pathway or whether, on the contrary, you were referring to the
Go2a
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ICL PATHWAY Moso
Authorities in their dealings with [CL Pathway as a supplier. If the latter, we
again utterly reject the innuendo that we are solely to blame for the delays.
6. Limit of 4000 Offices
As stated previously, we can find no contractual basis for the Authorities’
secking to limit rollout following Acceptance of the first release, nor for
‘Release Authorisation’ in this context.
‘We find it perverse that the DSS should seck to apply a cap to benefit rollout
because of the lack of certain facilities (on-line enquiries and Soft EVP) when
the specification of those facilities depends on change control agreement which
has been delayed by the Authorities. In the absence of formally agreed CCNs,
we will not accept the development risks associated with Soft EVP and on-line
enquiries.
However, providing the proposed 4000 limit applies only to the multi-benefit
component of DSS card rollout, and does not apply to post office rollout, it
should be possible to deal with it as part of an overall commercial settlement.
7. OBCS
The position as we understand it is that you are seeking confirmation that DSS
intend to follow through with OBCS in all outlets except those in Northern
Ireland, as currently contracted for.
8. Roll-out Rate
As noted in Mike's letter, we are content with your clarification. Thank you.
Under "Programme Issues", I have already elaborated on why we consider the
DSS to be to blame for the delays to multi-benefits. Other points have
generally been dealt with by Mike’s letter and by subsequent programme level
interaction, with some real progress being made.
Yours sincerely,
<
‘Tony Oppenbieim G RO i