The Contract to Develop and Update The Replacement National Insurance Recording System

In May 1995, the Contributions Agency, an Executive Agency of the Department of Social Security. Let a contract to Andersen Consulting to develop by February 1997 a replacement for the existing National Insurance Recording system (NIRS1). The successful development of the new system (NIRS2) is critical to provide necessary support for new pensions provisions which came onto effect in April 1997. Under the original deal, Andersen Consulting were to develop the new system and operate it for a period of seven years from February 1997 and provide further enhancements by April 1999.

The contract was the first under the Private Finance Initiative (PFI) for a major information technology project. Andersen Consulting were to receive no payment, other than for taking on responsibility for running the existing NIRS1 system, until the replacement system was operating satisfactorily, after which payments were to be based on usage. The Agency expected that the cost of the contract to them would be about 134 million (at April 1995 prices).