Research specification for research on ‘Company
Income Distribution’ project
DWP/HMRC Social and Economic Research Services –
Procurement Framework
June 2014
SPECIFICATION OF REQUIREMENTS
1. Introduction
1.1. HM Revenue and Customs (HMRC) wishes to commission a supplier from the
DWP/HMRC social and economic research framework to undertake a study to
better understand how unlisted companies distribute or reinvest income growth.
1.2. HMRC intends for this contract to be in place by the end of June 2014 with key
outputs delivered by February 2015.
1.3. HMRC will maintain the overall management of the project.
1.4. The contract will awarded to the organisation deemed to best meet HMRC’s
requirements and provide best value for money. Assessment will be based on
the factors included in section 11.
2. Context
2.1. There are many factors individuals will take into account when deciding how to
distribute profit from their company and it is important for HMRC to have a
greater understanding of these, whether they be related to growth, reinvestment
or tax. This research will provide evidence of what factors customers take into
account when deciding how to distribute profits, and to what extent tax plays a
role.
2.2. HMRC have a good understanding of PLCs but it is more difficult to support
small companies in the tax system because their accounts have less public
information.
3. Resarch Aims & Objectives
Aim
3.1
The primary aim of the project is to better understand the reasons why small
companies distribute their profit in a particular way.
Objectives
3.1. The detail of the questions below may be revised and further topic areas will be
covered and will be discussed at the research set-up meeting. The following
research questions are likely to be covered in the research:

How do unlisted companies distribute or retain income, for example through
dividend disbursement strategies, money-boxing or director loan
arrangements;

How do ratios between share capital; dividends; retained earnings; and
assets vary across unlisted companies’ balance sheets?

What is the relationship between unlisted companies incomeretaining/distribution strategies, and the ratios of interest on their balance
sheets?

What is the relationship between unlisted companies incomeretaining/distribution strategies and their growth plans?

What are the reasons, including tax-planning and growth plans, that
companies exhibit the particular income-distribution and income-retention
behaviours explored in the quantitative stage?
4. Methodology & Scope
4.1. HMRC anticipate that the project aims and objectives will be best met with a twostage approach: a quantitative survey followed up with some qualitative
interviews.
4.2. We are open to alternative suggestions but organisations proposing an
alternative methodology should provide costings on the basis of the
methodology proposed below in addition to costings for their preferred
methodology. HMRC will work closely with contractors on questionnaire and
topic guide design.
a. a quantitative stage consisting of approximately 1,500 x 20 min telephone
interviews with relatively new unlisted companies. (Please also provide
costs for 1000 achieved interviews). The sample would be provided by
HMRC and will contain contact details where available.
b. a qualitative stage consisting of approximately 30-40 face to face or
telephone interviews lasting around 45 minutes(please provide costs for
both) with respondents from the quantitative telephone survey who had
agreed to be contacted for further research.
4.3. The sample will be drawn from Companies House data and from Corporation
Tax returns. The data is based on companies that submitted their return in 201112. The sample should contain:
a. CRN (Company Registration Number)
b. Whether they have an Agent or Not
c.
Registered / Communication Addresses (and phone numbers / email
addresses where available)
d. TCN (Trade Classification Number)
e. Date of Incorporation
f.
Registered Name
g. No of Directors
h. No of Employees if available
i.
SIC
j.
Solvency Status
k.
Date Trading Commenced
l.
If Liquidated
m. If Ceased Trading
n. Some additional financial data (in bins)
4.4. The registered names and addresses will be the latest information available to
HMRC.
4.5. Although every effort will be made to provide accurate data, the contractor
should expect to perform some data cleaning and, in cases where phone
numbers are unavailable, some telephone data matching.
4.6. Fieldwork procedure – Tenderers should illustrate that they have the capacity to
deliver the research in a timely way through computer-assisted interviewing
techniques and that they have a fully trained field force able to conduct
interviews with high profile customers on a technical issue.
4.7. Contractors should consider the use of some cognitive testing of questions to
check that the right information is being gathered in the survey, as well as a
small pilot.
4.8. As this survey will include requests for factual information contractors should
consider if asking respondents to have information ready before the interview
would be useful.
4.9. Response rate - It is important that a high response rate is achieved. Tenderers
should also outline strategies for engaging business with the research, and
consider whether an incentive is appropriate and include these in any cost
estimates. Tenderers should outline how they will identify the most appropriate
individual within the business.
4.10. Questionnaire design – HMRC has started consulting internal policy teams
about the scope of the questionnaire and will brief the successful bidder on
further details of the content of the questionnaire on award of contract. HMRC
expects that the questionnaire issues and topics will be developed mainly by
HMRC but contractors will be expected to contribute to drafting questions and
set out the correct routing within the questionnaire. Bidders should outline how
they would carry out those and other tasks which would be required to develop
the questionnaire.
4.11. Tenderers should present their proposed approach for data capture, editing and
processing as well as brief analysis plans for the quantitative and qualitative
stage.
4.12. Over-sampling of some groups may be required and weighting of the sample
may therefore be required. A basic non-response bias analysis and re-weighting
to correct for this would also be expected.
5. Timetable
5.1. Suppliers must show that they have the capacity to complete the research on
time, in line with the timetable outlined below:
Activity
Issue ITT
Deadline for ITT
Interviews (if needed) / Post-tender negotiations
Contract awarded / Set-up meeting
Quantitative Fieldwork
Analysis / Initial headline quant findings
Qualitative Fieldwork
Presentation of quantitative and qualitative
findings and provisions of SPSS dataset
Draft report
Final report
Date
Friday 13th June 2014
12pm Thursday 26th June 2014
w/c 30th June 2014
w/c 7th July 2014
October / November 2014
December 2014
January 2015
February 2015
February 2015
March 2015
5.2. Based on the above timetable, we expect suppliers to provide a realistic work
programme that will enable them to deliver the research within the final deadline,
the final report needing to be delivered to HMRC by the end of March. The work
programme should include the highlighting of any potential pressure points, with
details of how they will be managed. We expect suppliers to be flexible in their
approach, and respond to changes as they arise.
6. Outputs (deliverables)
6.1. We expect the appointed supplier to provide the following research outputs in
consultation with the Project Manager:
a. A detailed project plan;
b. Regular progress updates to HMRC, preferably weekly;
c.
Two presentations to be to be agreed by the project manager, following a
drafting and reiteration process, which are:
I. A presentation of quantitative findings;
II. A presentation of qualitative findings;
d. Draft and final written report to be agreed by the project manager
following a drafting and reiteration process. HMRC require a high
standard of presentation and expect all drafts to be complete and to have
been proof-read before delivery. Several drafts may be required
dependent on the nature of the comments made. The report should
include:
I. An executive summary;
II. Main report findings;
III. Technical appendix (covering, for e.g., sampling and response rate);
e. Clean data set of the quantitative survey results, in SPSS format; and
f.
Anonymised transcripts of all qualitative interviews.
6.2. Please also provide costs for an additional, final presentation, which would be to
an audience of wider stakeholders including colleagues from other Government
departments.
6.3. The contractor should assume that questionnaires, topic guides and other
materials will need to be amended in the light of comments made by HMRC and
that several drafts may be required before agreeing a final draft. Allowance
should be made for this in the proposed timetable and cost for the research.
7. Project Management and Contract Administration
7.1. (Personal Information: redacted under section 40 of the Freedom of Information
Act) is the HMRC Manager for this project. She will be responsible for the day to
day management of the contract. Once the contract has been awarded, all
contact with HMRC concerning the project should be made through the HMRC
Manager. The research organisation will be required to appoint a contract
manager who will act as the principal point of contact for the Department.
7.2. The research organisation will be expected to work closely with the HMRC
project manager and through them, with internal customers within HMRC
throughout the duration of the contract. The project manager must be kept
informed of progress and be involved in key decisions. Proposed changes in
project staffing (at all levels) or deviations from the agreed work programme
must be discussed and agreed with the project manager in advance. They are
responsible for all decisions that involve funding.
7.3. In costing your tender you should allow for attendance at a minimum of four
meetings in the 2014/15 period (for example, one set-up meeting, an analysis
meeting and two results presentations). The majority of meetings are expected
to take place at HMRC offices in London, although some may take place at the
research organisation’s premises by arrangement.
8. Quality and Risk Management
8.1. Tenderers should include a quality control plan with their proposal, which should
demonstrate their internal procedures to assure quality control. It should be clear
how these procedures would be implemented with respect to this specific
project.
8.2. Proposals should also include an assessment of the key risks to this project.
This should identify the most significant risks to successful completion of the
programme of work, assess the degree of risk (likelihood and impact), set out
strategies for minimising these risks and managing the consequences if
problems occur. (Please see the separate excel sheet in Annex C as an
example of the template HMRC require research contractors to complete.
9. Expertise and Capability
9.1. HMRC acknowledges that considerable resources are required for the
successful delivery of this project to time. It is possible that agencies invited to
tender have the skills and ability within their organisation to undertake all or part
of this survey but do not have sufficient resources required to successfully
deliver the whole survey requirement. We therefore encourage agencies to
collaborate with other suppliers to ensure that they are fully capable of
undertaking this work.
9.2. HMRC is looking for suppliers who can demonstrate that their proposed team
incorporates those with:
a. Experience in conducting quantitative telephone surveys and qualitative
interviews with small organisations;
b. And knowledge or experience of finance-related research, including any
relevant experience in collecting sensitive information.
9.3. Proposals should summarise the skills and expertise that particular members of
staff bring to the team and clearly identify the project manager, with CVs
included as an annex.
9.4. The proposal should specify details of which parts (if any) of the project will be
sub-contracted, the name of the sub-contractor who will work on the project,
their experience of related research, and their responsibilities within the project.
If it is proposed to sub-contract any of the work, the same details as those
provided by the tenderer should be given about the qualifications, experience
and responsibilities of staff involved along with a description of their respective
roles and the management arrangements put in place. Ultimately, however, the
successful contractor will be held to account for the performance of any subcontractor and needs to demonstrate their confidence to successfully manage
sub-contractors.
10.
Resourcing and pricing
10.1. Tenderers are invited to propose how they would meet these requirements in
the form of a programme of work. Tenderers must include a project plan and
time schedule for the work that identifies the main tasks and key milestones that
will be used to monitor progress, indicating clearly where HMRC is expected to
contribute. The plan should also be accompanied by a resource profile, giving a
breakdown of the resources in person days to each task.
10.2. The proposal must include a firm price offer (excluding VAT) and a breakdown
of costs as per the table below. Costs for HMRC’s proposed methodology
(detailed in section 3) should be provided. Costs for any alternative
methodological design should be presented separately. Separate tables should
be provided for the lead contractor and any collaborator.
10.3. If the decision not to continue with this project at any stage has additional costs
associated, this should be clearly identified and a justification for these costs
provided. Any additional costs identified will be subject to negotiation and
agreement with HMRC prior to any contract being awarded.
10.4. Please indicate whether VAT would be payable. This is not a factor in
determining which tender is successful, but the information is useful to assist our
financial planning.
10.5. HMRC may require additional meetings and presentations to those as itemised
in section 6 above. Tenderers should supply costs per meeting and
presentation.
Activity
15 cognitive interviews
with businesses
A pilot survey of 50
businesses
A quantitative telephone
survey with
approximately 1,500
respondents,
approximately 20 mins in
duration (including
preparation of
appropriate research
tools)
Please also provide
costs for 1000 achieved
interviews
30-40 qualitative
interviews, 45 mins in
length, including drafting
of topic guide and
transcription costs.
(Please provide costs for
face-to-face and via
telephone).
Cost of any financial
incentives offered to
interview participants, if
relevant
Two presentations (one
each for quant and qual
stages) at HMRC
Drafting of a final written
report, inclusive of
corrections to draft
reports.
Project Management:
including initial set-up
meeting, regular
updates, progress
checks and additional
meetings (e.g. postproject review).
Other costs, including
administration, travel and
subsistence
Personnel
(level of
staff)
Number Day rate
of days per team
per team member
member
Overheads
Total
(£)
Final results presentation
(optional)
VAT (if applicable)
Note: Tenders that do not supply a schedule of costs in the format outlined
above will not be accepted. Rows/columns can be added to the above table
as necessary.
11.
Tender Evaluation Criteria
11.1. Tenders will be evaluated on best value for money. This will be judged on the
basis of assessment of proposals (supplemented where relevant by discussion
at interview) against the following criteria set against overall cost (excluding
VAT):
11.2. Tenderers should set out their tender according to the following criteria but can
add additional sections such as an introduction and summary. Particular
attention should be paid to the information requested under each criterion.
a. The extent to which the potential contractor demonstrates an
understanding of the context, needs of HMRC and key issues for the
project;
b. The appropriateness of the sampling strategy, methodology and
analysis proposed including steps taken on quality assurance at each
stage of the project;
c.
Demonstrates evidence of ability to deliver to agreed timeframes and
the capacity to deliver this project to the timeframes specified;
d. Identification of key risks to the project and proposed strategies to
mitigate these risks including the strategies proposed to maximise
successful contact with businesses and securing interviews with these
businesses;
e. The experience of the team including experience of conducting research
with businesses;
f.
Demonstrates relevant experience of both quantitative and qualitative
research methods and in particular delivery of high quality research
relating to company financial or sensitive information; and
g. If applicable, the appropriate use of collaborators to deliver the project
successfully.
11.3. Tenders will be evaluated using the scale below.
Score
0
1
2
3
4
Description
Totally fails to meet the requirement
Meets some of the requirement, with limited supporting
information
Meets some of the requirement, with reasonable
explanation
Fully meets the requirement, with detailed
explanation/evidence in support
Exceeds the requirement, with detailed explanation/
evidence in support
11.4. The contract will be awarded on a value for money basis, considering an ability
to identify and address all key areas and issues relevant to the study. Whilst
contract price will be an important consideration, it is only one of a range of
important factors affecting any decision to award a contract. HMRC reserve the
right not to accept the lowest priced (or any) tender.
11.5. HMRC will select the successful tendering organisation deemed to best meet
the requirement and value for money against the criteria described above.
Tendering organisations may be invited to interview by HMRC before the
selection is made, with interviews scheduled for week commencing 30th June (if
needed).
11.6. Following final selection, any necessary post tender negotiations will be held
with the preferred supplier in order to finalise the work programme prior to
awarding the contract.
12.
Data security and protection
12.1. The successful contractor will be required to submit a security plan, which will
need to be approved prior to the project being formally commissioned. This will
detail your approach to safeguarding confidential information including your
company policies for handling sensitive documents and computer files from
unauthorised access.
12.2. If you intend to involve sub contractors at any stage of the project please
include details of how you will ensure their compliance with all aspects of the
Security Plan.
12.3. The requirement on Data Security is set out at Schedule 5, Appendix 6 of the
Framework Call off Terms and Conditions. A Security Plan questionnaire is
attached (please see Annex D).
13.
Other Ethical Issues
13.1. To preserve confidentiality and anonymity, details of individual participants in
the research must not be included in the analysis and reports.
13.2. Published outputs of statistics will be consistent with statistical disclosure
guidelines, as advised by HMRC.
14.
Procurement Transparency
14.1. HMRC is obliged to publish tender documents for all contracts with a whole life
value of over £10,000. It is a condition of bidding for this work that applicants
agree to the subsequent publication of the contract once awarded.
14.2. If Bidders believe that any of the information requested is commercially
sensitive they should provide such information in a separate letter.
15.
Commissioning Conditions
15.1. The DWP/HMRC Research Framework 2013 Terms and Conditions will form
the basis of the contractual agreement between the successful tendering
organisation and HMRC.
15.2. The contractual agreement will be subject to the contractor complying with the
Official Secrets Acts and related Legislation including Section 18 and 19 of the
Commissioners or Revenue and Customs Act 2005.
15.3. HMRC retains the option of whether or not to commission the study, or any
element of it.
15.4. Terminating the contract - HMRC reserves the right to terminate the contract
prematurely (for any reason) should this be deemed necessary. In the event that
it would become necessary to terminate or adjust the contract, HMRC will cover
costs for services provided up to that point. Contractors should not book or
schedule fieldwork until written confirmation has been provided by HMRC.
Contractors should provide a cancellation policy, including details of charges (if
any) should it be necessary to cancel fieldwork.
15.5. Additional contractual information is included in Annex B.
Summary of requirements
15.6. Tenders should include the following information:

A summary of proposals including a firm price bid (exclusive of VAT) as
detailed in Section 9;

A detailed explanation of proposals to meet the aims and objectives
outlined above. This should include details of methodology;

A detailed timetable for the proposed research for each specific
information requirement, taking into account that outlined in Section 4;

Quality control procedures and risk register as outlined in Section 7 (as
annexes);

Curriculum Vitae of key personnel proposed, their status within the
company, area of expertise and details of their individual chargeable day
rates;

Chargeable rates for other personnel proposed. Where these can be
identified as groups (e.g. administration, support etc.) then a group rate
will suffice;

Any further costs identified.
15.7. Tenders should not exceed fifteen pages (excluding Annexes). Information
included after this limit will not be considered under the tender evaluation
process.
Queries on this research specification
Tenderers with any queries about the research specification should contact (Personal
Information: redacted under section 40 of the Freedom of Information Act) in the
Department’s KAI Directorate, on e-mail: (Personal Information: redacted under
section 40 of the Freedom of Information Act) The deadline for queries is 12pm on
Friday 20th June.
Information on how and when to return tenders
15.8. Please read the enclosed Instructions for Tenderers carefully.
15.9. You should send a PDF or read-only electronic copy of your proposal by email to arrive at the following e-mail address Email: (Personal Information:
redacted under section 40 of the Freedom of Information Act) no later than
12pm on Thursday 26th June (unless the date is subsequently amended in
writing by the Department). No hard copies of the tender are required.
In summary, tenders should note the following:
Action
Deadline
Contact
Submit queries on ITT
Submit
read
tender via email
Fri 20th June (12pm)
only Thurs 26th June (12pm)
Email:
(Personal Information:
redacted under section 40 of the
Freedom of Information Act)
Email:
(Personal
Information:
redacted under section 40 of the
Freedom of Information Act)
Annexes attached:
Annex A: HMRC Instructions for Tenderers
Annex B: Additional Contractual Information
Annex C: Risk Register Template
Annex D: Data Security Template