RM1043.8-1-THE DEPARTMENT FOR TRANSPORT - Zero Emission Vehicle Mandate IT System Development

Tender description

Pre-market engagement We conducted a short business analysis to understand the process flow of the existing CO2 regulation administration that this process is heavily based on. The principal conclusions drawn from this work were that a focused Discovery should concentrate on: • Manufacturer Engagement. • Assessing features for an achievable MVP that will meet deadlines. • Refining data spec. • Defining data protection and security needs. • Logging risks & assumptions. • Considering comparable systems. Which phase the project is in Discovery Existing team Head of Operations for Zero Emission Vehicle Regulation: Responsible for the implementation of the regulation. Digital Business Partner: Provides oversight of digital projects. Driver and Vehicle Licencing Agency (DVLA): Source of vehicle data. Address where the work will be done Work can be undertaken remotely however we expect the supplier to work on-site when required (Great Minster House, 33 Horseferry Rd, Westminster, London SW1P 4DR) Working arrangements The supplier is expected to work full-time, 37 hours per week (7.4 hours per day), Monday to Friday The supplier must be available/contactable during core hours, 10am to 4pm. Expenses must align with DfT Travel and Subsistence policy, with no expenses incurred within the M25 corridor with all other proposed travel approved by the buyer prior to mobilisation. Provide more information about your security requirements: Baseline Personnel Security Standard (BPSS) Provide more information about your security requirements (optional): Suppliers most conform with DfT’s Information and Cyber Security Policy and Architectural Principles (embedded in the attachment section) Also, shortlisted suppliers will be requested to complete the DfT’s Supplier Assurance Assessment. (embedded below) Latest start date 2023-08-18 Enter the expected contract length: 2 years Extension period: 6 months Special terms and conditions Progression into the Alpha and Beta phases will be subject to DfT’s satisfaction with the outputs from the previous Agile steps. Special terms and conditions The DfT reserves the right to terminate the agreement at each phase where the supplier has not met the deliverables set out in agreed statement of works. Write the term or acronym: See definition table below Explain the term or acronym: Administrator – The body appointed in law to administer the trading schemes. Allowance – The units used to measure compliance. Banking – Participants storing surplus allowances for up to three years Borrowing – Participants borrowing allowances from their own future allocation Credit – The unit of compliance to reward certain actions. Conversions – Transferring allowances between CO2 and ZEV scheme components. DA – Devolved Administration DfT – Department for Transport DVLA – Driver and Vehicle Licencing Agency MVM – Micro Volume Manufacturer, one which registers x < 1,000 cars or vans. Non-ZEV – A Non-Zero Emission Vehicle, a vehicle that emits greenhouse gases SPV – Special Purpose Vehicles, e.g. hearses, ambulances. SVM – Small Volume Manufacturer, one which registers 1,000 < x < 2,500 cars or vans. Trades – Scheme participants may buy and sell credits and allowances. VCA – Vehicle Certification Agency VIN – Vehicle Identification Number, data covered by GDPR WAV – Wheelchair Accessible Vehicle, a sub-type of SPVs ZEV – Zero Emission Vehicle, a vehicle that meets the legal definition of zero emissions. ZEVM – Zero Emission Vehicle Mandate Are you prepared to show your budget details?: Yes Indicative maximum: 1200000 Provide further information: £1.2m is the budget for the entire project. The breakdown is as follows: Discovery: £60,000 Alpha: £300,000 Beta: £840,000 Confirm if you require a contracted out service or supply of resource Contracted out service: the off-payroll rules do not apply Summary of work The purpose of this project is to deliver a digital system to support the ZEV Mandate, a new Government policy to regulate the sale of new cars and vans. Starting with short Discovery to finalise key requirements that build upon existing similar service for CO2 data, this will be followed by alpha and beta development stages before going live in Q2 2024. While the regulation it will support is complex, the IT system itself is relatively simple comprising of a database for storing records then a front end to enable access to them in limited ways. The system will need to support the storing of vehicle records, allowing participants to access and correct their data, the calculation of performance targets using those records, the application of those targets to calculate compliance, and recording activities undertaken by participants in relation to the scheme. Participants will need to be able to access and amend their records securely, with the body responsible for administering the regulation able to approve or deny any changes. Some of the data is protected under GDPR, so the system will need to ensure is stored and treated appropriately. The consultation on this regulation is currently running, and further detail on policy design can be found in the consultation on a zero emission vehicle (ZEV) mandate and CO2 emissions regulation for new cars and vans in the UK. https://www.gov.uk/government/consultations/a-zero-emission-vehicle-zev-mandate-and-co2-emissions-regulation-for-new-cars-and-vans-in-the-uk Where the supplied staff will work No specific location (for example they can work remotely) Why the work is being done The UK Government, Scottish Government, Welsh Government, and Department for Infrastructure (NI) are introducing a new zero emission vehicle (ZEV) regulation to increase the uptake of new ZEV cars and vans and limit CO2 emissions from new non-ZEV cars and vans. This will be four trading schemes under the Climate Change Act 2008. These are the Car ZEV and CO2 schemes and the van ZEV and CO2 schemes. There will be a target percentage for the sale of new ZEVs that applies to all manufacturers. There will be a different percentage target for cars and vans, and these targets increase annually out to 2030, the final year of the proposed regulation. Manufacturers will annually submit information for compliance to be assessed. In the ZEV trading schemes, participants (manufacturers selling new vehicles in the UK) will be given ZEV allowances (1 per vehicle) up to the target percentage for that year. The sale of non-ZEVs consumes ZEV allowances, the sale of ZEVs does not. If a manufacturer sells more ZEVs than the target, they will have spare ZEV allowances. If a manufacturer sells fewer ZEVs than the target, they will be in a deficit of ZEV allowances. Certain ZEV sales will attract bonus credits with 1 credit worth 1 allowance. In the CO2 schemes, manufacturers are provided a bespoke limit based on their individual 2021 emissions performance. This comes in the form of the average emissions in g CO2/km of all of the manufacturer’s non-ZEV vehicles. Every year the regulation is in force, the manufacturer’s average emissions is calculated again and compared to the manufacturer’s limit. Manufacturers are awarded enough CO2 allowances that if they hit or undercut their limit they will not need more. Having higher average emissions than the limit consumes more CO2 allowances than were awarded and results in a deficit. Manufacturers with a surplus in either scheme can sell their allowances to other participants, bank their allowances for future years, or convert ZEV allowances to CO2 allowances and vice versa. Manufacturers in deficit may use banked allowances, borrow allowances from their future allocation (with interest), buy allowances from manufacturers, and convert ZEV allowances to CO2 allowances and vice versa. There are some rules in place which create some limits to these flexibilities. The regulation is due to commence in January 2024. By law, a registry (IT system) must be created to manage the schemes and keep record of compliance; allowances, credits, etc. The primary purpose of the registry is to ensure the carbon savings of the ZEV mandate policy are not undercut by non-compliance, intentional and otherwise. As a new regulation, there is currently no system in place and while other regulations have comparable systems, none meet the specific needs of the ZEV mandate. Existing EU derived CO2 regulations that the ZEV Mandate will in part replace are administered by the VCA, but the ZEV mandate represents a significant expansion of responsibilities compared to the previous regulations. Legal necessity is the strongest driver for creating an IT system. For the Secretary of State not to administer the schemes would be unlawful. This could lead to litigation against the Secretary of State and potentially successful judicial review against the ZEV mandate. Outside of legal concerns, the ZEV mandate represents a significant intervention of the Government in a strategic national industry. Effective administration of the most ambitious net zero policy to date is vital to avoid significant reputational damage. As scheme commencement is due 1st January 2024, the IT system must start development as soon as possible to deliver a product in time for the first quarter of data, receipt of which is due from the DVLA in April 2024. The business problem you need to solve The proposed regulation as outlined is underpinned by individual records for every car or van sold new in the UK in a given year, approximately 2.2 million per annum. Each record will hold up to 25 different figures, including CO2 emissions, vehicle identification number (VIN), and others. These records originate from the DVLA’s first registration data set, itself derived from manual input at the point of vehicle registration by, usually, the seller. This introduces human error to the data set which is proposed to be used for assessing compliance. To solve this, DfT will send the data back to the vehicle manufacturers for them to make corrections. Some manufacturers could have hundreds of thousands of records, others theoretically single digits. An IT system that can share this data with manufacturers securely and allow them to make corrections at scale is therefore required. Some of the information contained will be covered under GDPR. This will include vehicle identification numbers which are unique to every vehicle and contact information for named individuals. Some information is not collected at all through the vehicle registration process and therefore needs to be provided new by the manufacturer through the IT system. There are applications manufacturers may need to make to access different parts of the scheme and these will need to be submitted via the IT system, or at least have their outcomes applied. Once all the data has been collected, calculations need to be made to assess the number of allowances and credits that should be awarded to manufacturers. This will be done on the provisional (i.e. uncorrected data) and on the final data following correction. Derogations and exemptions will then be applied to the smallest volume manufacturers. Once credits and allowances are allocated and finalised, manufacturers need to be able use them. This can be squaring them off against their compliance requirement, trading with other manufacturers, banking spare allowances, converting allowances between ZEV and CO2 schemes for either car or van, or borrowing extra allowances from their own future allocation. All of these decisions will need to be notified to the administrator via the IT system and the changes in allowance/credit balance recorded. There will also be a requirement for trades to be countersigned by both parties; the buyer and seller will need to independently confirm volume and price. The scheme contains bonus credits for certain types of ZEV sale which will need to be tracked and awarded. All the data will need to be stored for, at minimum, the duration of the scheme to 2035 and likely longer. It will need to be accessible and auditable. There is a chance that information collected under the scheme will be the subject of appeals or judicial review. There will be statistical and reporting requirements to analyse the performance of the vehicle market against trajectories and identify areas of market failure or unintended consequences of regulation. First user type: Manufacturer First user type: Scheme Administrator First user type: Devolved Administrations Enter more details about this user type: Manufacturers registering vehicles in the UK market. They need to: • Comply with the provisions of the regulation so that they are not penalised. • Correct vehicle data so that their compliance is accurately assessed. • Provide new vehicle data so that their compliance is accurately assessed. • (Potentially) make pooling applications so that eligible manufacturers can be considered as a single entity for the regulation. • Provide contact information so that the administrator can contact them. • Register trades, banking, conversions, borrowing, and credits. • (Potentially) Apply for SVM derogation. • (Potentially) Have the MVM derogation applied. • (Potentially) Have the CO2 exemption applied. Enter more details about this user type: The body responsible for the administration of the regulation. They need to: • Have access to manufacturer information so that they can assess compliance. • Be able to approve changes to data from error correction and scheme action reporting so that compliance is accurately assessed. • Be able to access historic scheme data if needed for appeals/policy review. Enter more details about this user type: The DfI in Northern Ireland, the Welsh Government, and the Scottish Government. They need to: • Have the best available information on compliance in their nations so that they can provide oversight. • Have access to information via reporting so that they can provide oversight.