The Contract to Develop and Operate the Replacement National Insurance Recording System

The National Insurance Recording system supports the Contributions Agency, an Executive Agency of the Department of Social Security. Computers have been used to support the collection and recording of National Insurance contributions since the 1960s. The system is extremely large, maintaining details on some 64 million National Insurance accounts are created each year.

In May 1995, the Agency signed a contract with Andersen Consulting to develop a replacement for the existing National Insurance Recording system (NIRS1) by February 1997 and operate it for seven years from that date. Under the contracts, the replacement system, known as NIRS2, would also be enhanced over the period February 1997 to April 1999 to provide additional services to the Agency. The successful development of the new system is critical to provide the necessary support for new pensions provisions which came into effect in April 1997.

The contract was the first major Information Technology contract awarded under the Private Finance Initiative. Andersen Consulting are to receive no payment until the system is operating satisfactorily, from which time they are to be paid on the basis of usage. The cost of the system to the Agency is likely to be about 134 million over the life of the contract (at April 1995 prices).