Scope
Description
Background to the Procurement
POL in the Market
POL has a network of 11,500 Post Offices across the UK and provides a wide range of services to its customers. The vast majority of post offices are franchises - small businesses in their own right - however there are also smaller numbers of strategic partners and branches managed directly by Post Office Limited. The directly-managed branches are in the process of moving towards being operated by franchisees.
The services that POL offers include but are not limited to:
• Mails and Parcels;
• Cash and Banking;
• Bill Payments;
• Travel Money;
• Government Services (such as identity and passport services); and
• Stamps and other postal related products and services.
Description of the Service
The current service being provided to POL relies on a system known as "Horizon" to process all of its transactions with customers which includes numerous legacy systems and assets. POL wishes to appoint a supplier for Lot and a supplier for lot 2 to replace the existing Horizon system ("Horizon Services").
The contracts for the Horizon Services will be awarded by reference to two lots:
• Lot 1 - Replacement Service Provider - Datacentres Operations and Levels 3 and 4 Application Support and Management including transformation and stabilisation. To include service and system integration.
• Lot 2 COTS - EPOS - Transformation of POL's technology using COTS software and associated services.
The successful bidders will be required to take on delivery of relevant parts of the Horizon Replacement Services within the respective Lot scope and provide, in each case where relevant, transition and transformation services to modernise and streamline the Horizon Services.
Lot 1 Replacement Services Provider
Lot 1 will require the successful supplier to:
• take over the existing Horizon Services (as detailed above) on a WITO basis (excluding network interconnections between data centres);
• provide system and service integration of both Lots 1 and 2;
• be responsible for maintaining and supporting IT infrastructure within the data centre until it is decommissioned;
• manage bespoke applications and integrations with the Lot 2 product and other POL third parties where necessary;
• stabilise the current Horizon Services;
• execute key transformation activity where required by POL (is also an option under Lot 2); and
• deploy the Lot 2 solution into the branch estate.
Lot 1 will have an initial term of 5 years plus two optional 1-year extensions (to be exercised at POL's discretion). POL will also have a right to extend the contract beyond this should more time be required to complete transformation activity.
Lot 2 Commercial-off-the shelf (COTS) electronic point of sale (EPOS) Software Provider
Wherever possible POL intends to purchase COTS products to meet all its requirements rather than build in-house.
The Lot 2 COTS - EPOS Supplier must be capable of delivering a modern, scalable, and future-ready solution for a term of 12 years.
Lot 2 COTS - EPOS will require the successful supplier to transform POL's retail technology platform to meet evolving business, operational, and customer requirements which shall:
• be cloud hosted, and be a consumption and/or flexible based eCommerce service;
• use event-driven microservice architecture using standards based integration (API) and industry recognised core service;
• include a structured data layer or open standards integration to other COTS data platforms; and
• be a modular service structure that includes but is not limited to:
• journey engine;
• point of sale (POS), EPOS & mobile POS services;
• customer engagement & insights;
• retail and/or retail POS integration;
• counter solutions; and
• options for pick up and drop off, and self-service kiosks.
• other functionality required for an end-to-end retail platform as set out in the Lot 2 requirements.
The Lot 2 COTS - EPOS successful supplier shall additionally be required to:
• ensure compatibility with existing systems and hardware (where applicable) and enable future enhancements;
• support implementation, including configuration, testing and rollout;
• comply with the target operating model implemented to support ongoing operations;
• execute key transformation activity where required by POL (is also an option under Lot 1); and
• provide ongoing support, updates, and optimisation services.
Lot 2 will have an initial term of 10 years plus two optional 1-year extensions (to be exercised at POL's discretion). POL will also have a right to extend the contract beyond this should more time be required to complete transformation activity.
POL: intends to issue the Lot 2 PSQ and further procurement documentation during August 2025.
Total value (estimated)
- £410,000,000 excluding VAT
- £492,000,000 including VAT
Above the relevant threshold
Main procurement category
Services
CPV classifications
- 48110000 - Point of sale (POS) software package
- 48481000 - Sales or marketing software package
- 48810000 - Information systems
- 48820000 - Servers
- 48920000 - Office automation software package
- 48930000 - Training and entertainment software package
- 51110000 - Installation services of electrical equipment
- 51210000 - Installation services of measuring equipment
- 51610000 - Installation services of computers and information-processing equipment
- 51620000 - Installation services of office equipment
- 72210000 - Programming services of packaged software products
- 72220000 - Systems and technical consultancy services
- 72230000 - Custom software development services
- 72240000 - Systems analysis and programming services
- 72250000 - System and support services
- 72260000 - Software-related services
- 72500000 - Computer-related services
- 72610000 - Computer support services
- 72810000 - Computer audit services
- 72820000 - Computer testing services
- 72910000 - Computer back-up services
- 72920000 - Computer catalogue conversion services
Contract locations
- UK - United Kingdom
Not the same for all lots
Contract dates and options are shown in Lot sections, because they are not the same for all lots.
Lot 1. Replacement Service Provider
Description
Lot 1 will require the supplier to:
• take over the existing Horizon Services (as detailed above) on a WITO basis (excluding network interconnections between data centres);
• be responsible for maintaining and supporting IT infrastructure within the data centre;
• manage bespoke applications and integrations;
• stabilise the current Horizon Services; and
• execute key transformations such as cloud migration as required.
Lot 1 will have an initial term of 5 years plus two optional 1-year extensions (to be exercised at POL's discretion).
Lot value (estimated)
- £269,000,000 excluding VAT
- £322,800,000 including VAT
Contract dates (estimated)
- 1 July 2026 to 30 June 2031
- Possible extension to 29 June 2033
- 6 years, 11 months, 29 days
Description of possible extension:
Lot 1 will have an initial term of 5 years plus two optional 1-year extensions (to be exercised at POL's discretion). Schedule 2 of the draft contract provides for other extension options.
Options
The right to additional purchases while the contract is valid.
This is set out in Schedule 2 of the draft contract that deals with the optional outcomes. Schedule 2 of the draft contract will be provided to all bidders that have signed and completed the non-disclosure agreement, the ethical walls agreement and the conflict of interest form.
Same for all lots
CPV classifications and contract locations are shown in the Scope section, because they are the same for all lots.
Lot 2. Commercial Off-The-Shelf (COTS) Electronic Point of Sale (EPOS) Software Provider
Description
Lot 2 COTS - EPOS will require the supplier to transform POL's retail technology platform to meet evolving business, operational, and customer requirements which shall:
• be cloud hosted, and be a consumption and/or flexible based eCommerce service;
• use event-driven microservice architecture using standards based integration (API) and industry recognised core service;
• include a structured data layer or open standards integration to other COTS data platforms; and
• be a modular service structure that includes:
i. journey engine;
ii. point of sale (POS), EPOS & mobile POS services;
iii. customer engagement & insights;
iv. retail and/or retail POS integration;
v. counter solutions; and
vi. options for pick up and drop off, and self-service kiosks.
The Lot 2 COTS - EPOS supplier shall additionally be required to:
• ensure compatibility with existing systems (where applicable) and enable future enhancements;
• support implementation, including configuration, testing and rollout;
• comply with the target operating model implemented to support ongoing operations
• execute key transformation activity where required by POL; and
• provide ongoing support, updates, and optimisation services.
The Lot 2 COTS - EPOS Supplier must be capable of delivering a modern, scalable, and future-ready solution
Lot value (estimated)
- £141,000,000 excluding VAT
- £169,200,000 including VAT
Contract dates (estimated)
- 1 July 2026 to 30 June 2036
- Possible extension to 30 June 2038
- 12 years
Description of possible extension:
Lot 1 will have an initial term of 10 years plus two optional 1-year extensions (to be exercised at POL's discretion). Schedule 2 of the draft contract provides for other extension options.
Options
The right to additional purchases while the contract is valid.
This is set out in the requirements document that deal with the optional outcomes. The requirements document will be provided to all bidders that have signed and completed the non-disclosure agreement, the ethical walls agreement and the conflict of interest form.
Same for all lots
CPV classifications and contract locations are shown in the Scope section, because they are the same for all lots.
Participation
Legal and financial capacity conditions of participation
Lot 1. Replacement Service Provider
Lot 2. Commercial Off-The-Shelf (COTS) Electronic Point of Sale (EPOS) Software Provider
This is set out in the PSQ document that will be provided to all bidders that have signed and completed the non-disclosure agreement, the ethical walls agreement and the conflict of interest form.
Technical ability conditions of participation
Lot 1. Replacement Service Provider
Lot 2. Commercial Off-The-Shelf (COTS) Electronic Point of Sale (EPOS) Software Provider
This is set out in the PSQ document that will be provided to all bidders that have signed and completed the non-disclosure agreement, the ethical walls agreement and the conflict of interest form.
Particular suitability
Lot 2. Commercial Off-The-Shelf (COTS) Electronic Point of Sale (EPOS) Software Provider
Small and medium-sized enterprises (SME)
Submission
Enquiry deadline
18 August 2025, 12:00pm
Submission type
Requests to participate
Deadline for requests to participate
21 August 2025, 12:00pm
Submission address and any special instructions
Tenders may be submitted electronically
Yes
Languages that may be used for submission
English
Award decision date (estimated)
1 July 2026
Award criteria
| Name | Type | Weighting |
|---|---|---|
| Quality | Quality | 65% |
| Commercial | Price | 25% |
| Social Value | Quality | 10% |
Other information
Description of risks to contract performance
POL has identified the following risks, the occurrence of which could jeopardise the satisfactory performance of the awarded contracts, but because of their nature, cannot be addressed in the contracts as awarded, and so may require a substantial amendment to the contracts under paragraph 5 of Schedule 8 (materialisation of a known risk) to the Procurement Act 2023:
• findings of the Post Office Horizon IT Inquiry (or any other public inquiry, or inquiry of a similar nature, into the operations of the Post Office or the Horizon system) (Inquiry) that require modification to the awarded contract to implement;
• policy decisions made by HM Government, any regulator, or any other public body, whether or not in response to findings by an Inquiry, that require modification to the awarded contracts to implement;
• the enactment or coming into force of legislation relating to the Post Office that requires modification to the awarded contracts to implement;
• in respect of the Lot 1 contract, there is a delay to the appointment of the Lot 2 supplier;
• where the Lot 1 and Lot 2 contracts are awarded to separate suppliers, the failure of one supplier to perform its obligations under awarded contract where that failure affects the ability of the supplier under the other awarded contract to perform its obligations;
• there is a delay in the design and build of the solution, or any part of it, provided under the Lot 2 contract;
• where the deployment of the Lot 2 solution by the Lot 1 supplier to the branch estate is delayed, disrupted to otherwise does not proceed according to plan due to complexities arising from the branch network;
• where either the Lot 1 or Lot 2 supplier is unable to perform their obligations under their respective awarded contract due to complexities arising from the Horizon systems;
• in respect of the Lot 1 contract, that the procurement for the Lot 2 contract is abandoned or significantly delayed;
• there is a delay in implementation of the Lot 1, which results in a continued reliance on the incumbent supplier and the need for an extension to the contract or other change to ensure business continuity; or
• the Authority is unable to recruit sufficient in-house service integration and management capability, and requires additional support from the Lot 1 supplier.
Applicable trade agreements
- Government Procurement Agreement (GPA)
- Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
Conflicts assessment prepared/revised
Yes
Procedure
Procedure type
Competitive flexible procedure
Competitive flexible procedure description
For this procurement, the Post Office Limited (POL) intends to award a public contract through a competitive flexible procedure in accordance with section 20(1) and (2)(b) of the Procurement Act 2023.
The public contracts under this procurement are awarded by reference to lots. The outcome could be one of the following:
• separate bidders are awarded the contracts for:
o Lot 1 Replacement Service Provider (comprising continuation of the current services through Walk In & Take Over from the incumbent where a new supplier is appointed, with optional services including stabilisation activities and transform operations where required by POL); and
o Lot 2 Commercial-off-the shelf (COTS) end to end electronic point of sale (EPOS) Software Provider (comprising the provision and implementation (where required) of the COTS and EPOS solution, and ongoing run services); or
• a single supplier could be awarded both Lots.
The following stages will be followed:
1. Stage 1: Planned Procurement Notice - POL issued a Planned Procurement Notice on 8 May 2025
2. Stage 2: Procurement Specific Questionnaire -
a. Issuing of a Tender Notice inviting bidders to submit a request to participate in the procedure.
b. To request to participate, bidders must register with POL's e-Sourcing platform, Web 3, complete, sign and return the non-disclosure agreement (NDA), conflict of interest form (COIF) and ethical walls agreements (EWA) (where required for incumbent suppliers) sent to the bidder. Bidder's must complete the Procurement Specific Questionnaire (PSQ) by no later than 21 August 2025 for Lot 1 and 12 September 2025 for Lot 2. The PSQ and other associated tender documents and background documents will be made available to a bidder upon receipt of a properly complete NDA, EWA (where required) and COIF.
In addition, bidders must register with the central digital platform operated by the Cabinet Office (CDP) and upload the core supplier information. They must also ensure that any associated person of the bidder and any proposed sub-contractor also registers with the CDP and uploads their core supplier information.
To request to participate in Lot 1, bidders must do so by returning completed PSQ (including confirmation of CDP registration and upload of core supplier information) by 12:00 BST on Thursday, 21 August 2025. For Lot 2, bidders must do so by 12:00 BST on Friday, 12 September.
c. All documents relating to this procurement, including all procurement documents, will be made available through POL's e-Sourcing platform, Web 3, the link for which can be found elsewhere in this notice. Bidders must return the NDA, COIF and, where required the EWA, to receive access to all associated tender documents.
d. The PSQ will be structured in such a way that potential providers can submit and be evaluated for the specific lot in which they are interested. The PSQ will address background information, economic standing, capability, capacity and experience, but will not require any pricing at this stage.
e. The PSQ submissions will be evaluated and moderated against a set of criteria that test bidders' capacity, capability and experience. The six highest scoring bidders for each lot will be Invited to submit an Initial Tender as part of the Initial Tender Stage (ITS).
3. Stage 3: Initial Tender Stage - At the ITS of the procurement, tenders will be assessed on how the Bidder's proposed solution will be delivered, how much it will cost and under what terms it will be supplied. There will be weightings applied to the qualitative and quantitative assessment criteria set out in the ITS documentation. Any tender submitted, at ITS, must be capable of acceptance without the need to engage in dialogue. Where an assessed tender meets the criteria set out in the ITS documentation, POL may determine that tender is the most advantageous tender, (MAT), under section 19 of the Procurement Act 2024 and proceed to Stage 6: Contract Award with that Bidder. If POL does so, it will not conduct Stage 4 or Stage 5.
4. Stage 4: Dialogue (optional) -
a. Where POL decides to continue to the dialogue stage, it intends to invite up to four bidders with the highest scoring Initial Tenders for each lot from the ITS to participate with POL in dialogue/negotiation.
b. Dialogue/negotiation will be staggered with Lot 1 starting first and Lot 2 commencing prior to the Lot 1 dialogue completing.
5. Stage 5: Invitation to Submit Final Tenders (ITSFT) -
a. Once dialogue completes, the bidders invited to dialogue will be Invited to Submit Final Tenders (ITSFT) against the refined requirements (solution, commercial and contractual) and the refine award criteria weightings that apply to this stage (which will be set out in the ITSFT).
b. POL will evaluate and moderate the final tenders and assess which tenders offer the most advantageous tender (MAT)
.
6. Stage 6: Contract Award - Following evaluation and moderation of the ITSFT responses, POL will identify the preferred bidder(s) and announce this in accordance with the Procurement Act 2023 and Procurement Regulations 2024, and work with those preferred bidders to finalise contracts.
POL proposes to rely on section 24 of the Procurement Act 2024 to refine the award criteria. It will rely on that section to potentially change the relative weighting of the award criteria following the dialogue/negotiation stage.
POL expects to require similar services after the expiry of the contract awarded under this procurement. However, it does not intend to carry out that subsequent procurement in reliance on the direct award justification in paragraph 8 of Schedule 5 to the Procurement Act 2023.
Documents
Associated tender documents
https://postoffice.wax-live.com/S2C/SignIn.aspx
Documents to be provided after the tender notice
Via Web 3 see above
Contracting authority
Post Office Limited
- Companies House: 02154540
- Public Procurement Organisation Number: PRNP-5883-YMLG
100 Wood Street
London
EC2V 7ER
United Kingdom
Email: Procurement@postoffice.co.uk
Website: https://corporate.postoffice.co.uk/
Region: UKI31 - Camden and City of London
Organisation type: Public undertaking (commercial organisation subject to public authority oversight)