10 Things We Have Learned from DWP’s CAEHRS Competition

So, the much anticipated CAEHRS bidding window has now closed, and bid teams across the country are taking a moment of well-earned respite whilst DWP begin scoring the responses. To sign off on the campaign, here are 10 things we have learned about CAEHRS, and DWP’s forward market strategy, that we did not know before!

1) The Covid-19 unemployment surge has driven renewed interest in the DWP market. Had the competition ran to its original 2019 timeline there would likely have been few, if any, market entrants. Instead, many new players and latecomers, including Capita, Palladium and Adecco, have thrown their hats in, setting up the tantalising prospect of a much more diverse and competitive marketplace.

2) DWP’s CAEHRS tiering structure is bold and will limit the ability of the historic big players to bid for everything they may wish for. Tier 2 creates potential for regional mid-market providers to grow their capability to become the national prime providers of tomorrow. This does, however, also make such providers potentially very attractive acquisition targets!

3) With only up to 8 slots available in Tier 1 in each Lot, it is inevitable that there will be surprises, with big players missing the cut and dropping into Tier 2 in some areas. Indeed, it is probable that we will see some providers ending up with a mixture of both Tier 1 and 2 slots across the Lots.

4) In the absence of a definitive contract pipeline, Tier 2 could still yet prove to be the place to be in terms of DWP spend and volume of opportunity. Tier 1 players could end up watching on with envy as Tier 2 potentially enjoys a more favourable stream of regular opportunities.

5) Despite the rhetoric, it is hard to imagine anyone other than DWP commissioning through CAEHRS. The Welsh Assembly and Scottish Government have already indicated they will not use it and, given the very essence of devolution, its hard to imagine that combined authorities with devolution powers will use it either.

6) One consequence of this is that Scotland could be set to become the least bid for Lot (the jungle drums suggest it was dropped by several leading bidders). That could me that those who do bid may only need to achieve little more than a minimum score to secure a place. That said, it could also be the Lot with the lowest overall CAEHRS spend.

7) Furthermore, it is far from clear that DWP will itself use CAEHRS for every “employment and health” opportunity it may seek to procure. This may, however, lead to pressure from CAEHRS qualified providers to see future DWP opportunities ringfenced in.

8) Tender Assurance retains the potential to be the most controversial aspect of the competition. To achieve a maximum points assurance evidence must offer “strong support” for the bidder’s response, but such judgements could ultimately be highly subjective. Do not rule out challenges if the final list all comes down to tender assurance scores.

9) If service integration was the buzz term of the last umbrella agreement, then digital servicing is the buzz term for CAEHRS. With a more digitally literate, home working, and Covid-19 savvy populous of newly unemployed jobseekers, many bidders are placing digital servicing at the heart of their offer, bringing interesting new digital partners in alongside them.

10) And finally, a point that always seems to make the list! The sector, encapsulating both DWP and its providers, still has not managed to come up with a sensible solution to the hiatus of “Expressions of Interest” issued to the market whenever a major new procurement comes along. Surely this is one that can be fixed!