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TUPE in facilities tenders: how to address it

How to handle TUPE liabilities in your bid without taking on risk you cant price.

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If you are bidding to take over an existing cleaning, security, or hard facilities management contract, there is one non-negotiable factor that dictates whether your bid is commercially viable. You are going to inherit the incumbent provider's staff. You inherit their salaries, their accrued rights, and their unresolved employment tribunals. If you price a TUPE tender incorrectly, you absorb those costs. If you fail to address TUPE liabilities in your bid writing, evaluators will score your mobilisation plan down for risk. TUPE transferring staff requirements are designed to protect employees. But for bidders, they represent a significant commercial risk that you must quantify before submission. Welcome to the Bidwell guide on handling TUPE liabilities in your bid, without taking on risk you cannot price. Let us start with the fundamentals. The Transfer of Undertakings Protection of Employment Regulations 2006, commonly known as TUPE, applies to a service provision change. In facilities management, this occurs when a client outsources a service for the first time, brings a service back in-house, or re-tenders a contract to a new provider. If you win a contract to clean a local authority building currently cleaned by another contractor, TUPE applies. The staff who are assigned to that contract automatically transfer to your employment on their existing terms and conditions. A common complication in FM tenders is fragmented services. A security guard might spend sixty percent of their time on the contract you are bidding for and forty percent on another site. Generally, if an employee spends the majority of their time on the transferring service, they are in scope to transfer. You must scrutinise the TUPE list provided in the tender pack to identify phantom workers. These are staff listed who do not actually work on the contract, or staff who are split across multiple sites. If you inherit staff you do not need, any subsequent redundancies will be at your cost. The key test is whether there is an organised grouping of employees situated in Great Britain that has as its principal purpose the carrying out of the activities concerned on behalf of the client. In a standard soft FM contract where cleaners and security guards are permanently stationed at a single building, the grouping is obvious. Where services are delivered through a helpdesk or a regional roving team, it becomes much harder to prove that an organised grouping exists solely for that specific contract. To price this risk, you need Employee Liability Information, or ELI. By law, the outgoing employer must provide this at least twenty-eight days before the transfer. However, in public sector procurement, buyers usually provide an anonymised TUPE list during the tender stage so you can price the contract. When reviewing the TUPE spreadsheet in a tender portal, look for missing data. If the incumbent provider has not disclosed annual leave entitlements, sick pay terms, or pending tribunal claims, you are pricing blind. Submit clarification questions immediately. If the buyer cannot provide accurate data, you must build risk contingencies into your pricing model or consider a no-bid decision. You should also look for anomalies. If you see a sudden spike in salaries or promotions just weeks before the tender was issued, the incumbent may be artificially inflating the contract cost to make it harder for competitors to win. Challenge these anomalies during the clarification period. Another red flag is the presence of agency staff or self-employed contractors on the TUPE list. TUPE generally only applies to employees. If you spot non-employees, raise a clarification to establish their exact legal status. The biggest commercial risk in a TUPE transfer is the cost of harmonising benefits and managing pension obligations. When bidding for local authority contracts, you will often encounter staff who are members of the Local Government Pension Scheme, or LGPS. Under the New Fair Deal, independent contractors delivering outsourced public services must offer transferring staff continued access to the LGPS or a broadly comparable scheme. To participate in the LGPS, you must become an Admission Body. This requires an admission agreement and often an indemnity bond to protect the pension fund if your business fails. The employer contribution rates for LGPS can be upwards of twenty to thirty percent, significantly higher than statutory workplace pensions. You must factor these contribution rates, the cost of the bond, and any legal fees for setting up the admission agreement into your commercial submission. If you fail to account for LGPS contributions, your pricing will be fundamentally flawed. A twenty-five percent employer contribution rate on a thirty thousand pound salary adds seven thousand five hundred pounds per year to your costs for that single employee. Beyond pensions, your pricing model must account for hidden costs. Accrued annual leave, redundancy costs if you plan to deliver the service with fewer staff, mobilisation and training, and maternity and sick pay. You must also consider the cost of management time. Managing a TUPE transfer requires significant input from your HR team, operations managers, and payroll department. When writing the TUPE bid response, buyers evaluate your competence in managing complex HR transitions without disrupting the service. Your response must be methodical, legally compliant, and empathetic to the transferring staff. You will be required to write to the outgoing employer detailing any measures, or changes, you plan to take regarding the transferring staff. In your bid response, explain your process for drafting and issuing the measures letter in good time to allow for statutory consultation. Detail your timeline for engaging with the transferring staff. Explain how you will hold town hall meetings, one-to-one consultations, and welcome sessions. State who will lead the consultations, where they will take place, and what will be discussed. It is vital to explain how you will communicate with staff who are absent during the consultation period, such as those on maternity leave or long-term sick leave. Failing to consult with absent staff is a common pitfall that can lead to tribunal claims. Also, do not double-count TUPE staff in your social value commitments. If a contract requires you to create new local jobs, retaining the incumbent workforce under TUPE does not count as job creation. Instead, focus your social value response on upskilling the transferring staff, offering apprenticeships, or improving their wellbeing benefits. Let us look at a worked example. Consider a real-world scenario based on a typical local authority soft FM procurement. A council issues a tender for a combined cleaning and security contract worth two point two million pounds over three years. The tender pack includes a TUPE spreadsheet listing thirty-five staff. The incumbent provider pays the Real Living Wage, but the council has mandated that the new contract must also include an enhanced sick pay scheme. Three of the security guards are members of the LGPS. As a bidder, you must calculate the increased cost of the enhanced sick pay for all thirty-five staff. Obtain an actuary's estimate for the LGPS employer contributions for the three guards and price the cost of an admission bond. The TUPE list shows two cleaners currently on long-term sick leave. Submit a clarification question asking for the expected return dates to calculate temporary cover costs. Finally, write a mobilisation plan detailing a four-week consultation period, including a sample welcome pack outlining the new uniform policy and induction training dates. This level of detail shows the buyer that you have thoroughly analysed the TUPE data and built a robust plan to manage the transition. Let us cover some common mistakes to avoid. Do not ignore missing data. Once you submit your pricing, you own the risk. Do not underestimate pension costs. Failing to account for LGPS contribution rates can wipe out your profit margin. Do not treat TUPE as a tick-box exercise. Generic responses score poorly. Do not plan immediate redundancies. Assuming you can immediately sack the incumbent staff to replace them with cheaper labour is illegal. Redundancies must have a valid Economic, Technical, or Organisational reason, known as an ETO reason. And do not assume indemnities will save you. Standard clauses attempt to limit the buyer's liability for TUPE errors. You must actively manage the risk during the bid phase. Now for a quick Q and A. Can we refuse to take on the incumbent staff? No. If TUPE applies, the transfer of assigned staff is automatic by operation of law. You cannot opt out. What if the incumbent provider refuses to share the TUPE data? The outgoing provider has a legal obligation to provide ELI at least twenty-eight days before the transfer. During the tender stage, it is the buyer's responsibility to extract this data to ensure a fair procurement process. Do we have to match their exact pension scheme? For private sector transfers, you must provide a minimum level of pension provision. For public sector transfers under New Fair Deal, you must provide continued access to the public sector scheme or a broadly comparable scheme. Can we change their working hours after the transfer? You cannot change terms and conditions if the sole or principal reason for the change is the transfer itself. You can only make changes if there is an ETO reason involving changes in the workforce. What happens if an employee objects to the transfer? Their employment will terminate on the transfer date. They will not transfer to your business, and they will not be considered dismissed. Does TUPE apply to sub-contractors? Yes. If the incumbent provider sub-contracted the window cleaning, and you also plan to sub-contract it, the sub-contractor's staff may transfer to your new sub-contractor. To wrap up, TUPE is a significant commercial risk, but with thorough data analysis and a legally compliant mobilisation plan, it is a risk you can manage and price accurately. For the full details, including the worked example and further reading, check out the written guide. And remember, Bidwell is the platform that automates this work, helping you manage complex tenders with confidence.

The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) is a non-negotiable factor that dictates whether a bid is commercially viable. When you bid to take over an existing cleaning, security, or hard FM contract, you inherit the incumbent provider's staff. You also inherit their salaries, their accrued rights, and their unresolved employment tribunals.

If you price a tupe tender incorrectly, you absorb those costs. If you fail to address TUPE liabilities in your bid writing, evaluators will score your mobilisation plan down for risk. TUPE transferring staff tender requirements are designed to protect employees, but for bidders, they represent a significant commercial risk that must be quantified before submission.

This guide explains how to handle facilities management tupe data, what to look for in the Employee Liability Information (ELI), and how to structure your bid responses to reassure buyers that you can manage the transition without service disruption.

What this guide covers

  • How to identify if TUPE applies to a facilities management contract.
  • What Employee Liability Information (ELI) you should expect from the buyer.
  • How to price TUPE risks and pension obligations (including LGPS).
  • Structuring your bid response for TUPE and mobilisation questions.
  • A worked example of a TUPE scenario in a real public sector tender.
  • Common mistakes bidders make when dealing with TUPE.

Understanding when TUPE applies to FM contracts

The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) applies to a "service provision change". In facilities management, this occurs when a client outsources a service for the first time, brings a service back in-house, or re-tenders a contract to a new provider [1].

If you win a contract to clean a local authority building currently cleaned by another contractor, TUPE applies. The staff who are "assigned" to that contract automatically transfer to your employment on their existing terms and conditions. You cannot avoid TUPE by refusing to take on the staff [2].

The concept of "assigned" staff

A common complication in FM tenders is fragmented services. A security guard might spend 60% of their time on the contract you are bidding for and 40% on another site. Generally, if an employee spends the majority of their time on the transferring service, they are in scope to transfer [3].

Bidders must scrutinise the TUPE list provided in the tender pack to identify "phantom workers" (staff listed who do not actually work on the contract) or staff who are split across multiple sites. If you inherit staff you do not need, any subsequent redundancies will be at your cost.

It is critical to clarify exactly who is assigned to the service. For example, if an incumbent provider uses a mobile cleaning team that visits ten different sites across a region, those cleaners are unlikely to be assigned to any single site. However, if a cleaner works 30 hours a week, and 25 of those hours are spent at the specific school you are bidding to clean, they are almost certainly assigned to that service and will transfer to you.

The key test is whether there is an "organised grouping of employees" situated in Great Britain that has as its principal purpose the carrying out of the activities concerned on behalf of the client. In a standard soft FM contract where cleaners and security guards are permanently stationed at a single building, the grouping is usually obvious. Where services are delivered through a helpdesk or a regional roving team, it becomes much harder to prove that an organised grouping exists solely for that specific contract.

Analysing Employee Liability Information (ELI)

By law, the outgoing employer must provide Employee Liability Information (ELI) to the incoming employer at least 28 days before the transfer [4]. However, in public sector procurement, buyers usually provide an anonymised TUPE list during the tender stage so bidders can price the contract.

The ELI must include:

  • The identity and age of the transferring employees.
  • Written particulars of employment (contracted hours, pay rates).
  • Information on any disciplinary or grievance procedures from the last two years.
  • Details of any legal claims brought by the employees in the last two years.
  • Information on collective agreements [4].

Red flags in the TUPE data

When reviewing the TUPE spreadsheet in a tender portal, look for missing data. If the incumbent provider has not disclosed annual leave entitlements, sick pay terms, or pending tribunal claims, you are pricing blind.

Submit clarification questions immediately. If the buyer cannot provide accurate data, you must build risk contingencies into your pricing model or consider a no-bid decision.

You should also look for anomalies in the data. For instance, if you see a sudden spike in salaries or promotions just weeks before the tender was issued, the incumbent may be artificially inflating the contract cost to make it harder for competitors to win. While this is bad practice and potentially a breach of TUPE regulations, it happens. You must challenge these anomalies during the clarification period.

Another common red flag is the presence of agency staff or self-employed contractors on the TUPE list. TUPE generally only applies to employees, not independent contractors. However, the legal definition of an employee can be complex, and some agency workers who have been on the assignment for a long time might argue they have acquired employment rights. If you spot non-employees on the list, raise a clarification to establish their exact legal status.

Pricing TUPE and pension obligations

The biggest commercial risk in a TUPE transfer is the cost of harmonising benefits and managing pension obligations.

The Local Government Pension Scheme (LGPS)

When bidding for local authority contracts, you will often encounter staff who are members of the Local Government Pension Scheme (LGPS). Under the New Fair Deal, independent contractors delivering outsourced public services must offer transferring staff continued access to the LGPS or a broadly comparable scheme [5].

To participate in the LGPS, you must become an "Admission Body". This requires an admission agreement and often an indemnity bond to protect the pension fund if your business fails. The employer contribution rates for LGPS can be upwards of 20-30%, significantly higher than statutory workplace pensions. You must factor these contribution rates, the cost of the bond, and any legal fees for setting up the admission agreement into your commercial submission.

If you fail to account for LGPS contributions, your pricing will be fundamentally flawed. A 25% employer contribution rate on a £30,000 salary adds £7,500 per year to your costs for that single employee. Multiply that across a team of 20, and you are looking at £150,000 in unbudgeted annual costs.

Hidden costs of transfer

Beyond pensions, your pricing model must account for:

  • Accrued annual leave: If staff transfer with untaken holiday, you are liable for it.
  • Redundancy costs: If you plan to deliver the service from a different location or with fewer staff, you must pay redundancy. Dismissals connected to the transfer are automatically unfair unless there is an Economic, Technical, or Organisational (ETO) reason [6].
  • Mobilisation and training: Transferring staff will need to be inducted into your company culture, trained on your systems, and provided with new uniforms.
  • Maternity and sick pay: If a transferring employee is on maternity leave or long-term sick leave, you inherit those payment obligations. You must also factor in the cost of providing temporary cover for their roles.

You must also consider the cost of management time. Managing a TUPE transfer requires significant input from your HR team, operations managers, and payroll department. They will need to hold consultations, issue new contracts, set up payroll records, and handle grievances. This administrative burden is a real cost that should be reflected in your overheads or mobilisation budget.

Writing the TUPE bid response

Buyers ask about TUPE to evaluate your competence in managing complex HR transitions without disrupting the service. Your response must be methodical, legally compliant, and empathetic to the transferring staff.

The Measures Letter

You will be required to write to the outgoing employer detailing any "measures" (changes) you plan to take regarding the transferring staff. This includes changes to pay dates, reporting structures, or work locations [4]. In your bid response, explain your process for drafting and issuing the measures letter in good time to allow for statutory consultation.

A strong bid response will provide a template or an outline of the measures letter, demonstrating to the buyer that you have done this before and understand the legal requirements. You should also explain how you will handle any objections or queries raised by the incumbent provider or the transferring staff.

The consultation process

Detail your timeline for engaging with the transferring staff. Explain how you will hold town hall meetings, 1-to-1 consultations, and welcome sessions. Buyers want to see that you treat transferring staff as assets, not liabilities.

TUPE bid responses should be focused on the needs of the individuals being transferred, so a personal approach should be adopted throughout, prioritising employee welfare from point of transfer to employment duration [7].

Your consultation plan should be detailed and specific. State who will lead the consultations (e.g., your HR Director), where they will take place, and what will be discussed. Mention that you will provide staff with a clear point of contact for any questions or concerns during the transition period.

It is also vital to explain how you will communicate with staff who are absent during the consultation period, such as those on maternity leave or long-term sick leave. Failing to consult with absent staff is a common pitfall that can lead to tribunal claims. Detail your process for sending letters to home addresses and offering remote consultation meetings.

Aligning TUPE with Social Value

Do not double-count TUPE staff in your social value commitments. If a contract requires you to create new local jobs, retaining the incumbent workforce under TUPE does not count as job creation. Instead, focus your social value response on upskilling the transferring staff, offering apprenticeships, or improving their wellbeing benefits [8].

For example, you could commit to putting all transferring cleaners through a Level 2 NVQ in Cleaning and Support Services. This demonstrates a commitment to the workforce and aligns with the buyer's social value objectives without artificially inflating job creation numbers.

Worked example

Consider a real-world scenario based on a typical local authority soft FM procurement. A council issues a tender for a combined cleaning and security contract worth £2.2m over three years [9].

The tender pack includes a TUPE spreadsheet listing 35 staff (25 cleaners, 10 security guards).

The scenario: The incumbent provider pays the Real Living Wage, but the council has mandated that the new contract must also include an enhanced sick pay scheme. Three of the security guards are members of the LGPS.

The bidder's action:

  1. Pricing: The bidder calculates the increased cost of the enhanced sick pay for all 35 staff. They obtain an actuary's estimate for the LGPS employer contributions for the three guards and price the cost of an admission bond.
  2. Clarification: The TUPE list shows two cleaners currently on long-term sick leave. The bidder submits a clarification question asking for the expected return dates to calculate temporary cover costs.
  3. Method Statement: The bidder writes a mobilisation plan detailing a 4-week consultation period. They include a sample "Welcome Pack" that will be given to all staff, outlining the new uniform policy and the date of their induction training.

This level of detail shows the buyer that the bidder has thoroughly analysed the TUPE data and built a robust plan to manage the transition. The bidder has not just accepted the data at face value; they have actively interrogated it to identify risks and build contingencies into their pricing and operational models.

By clearly setting out the assumptions made in the pricing model, the bidder also protects themselves if the TUPE data turns out to be wildly inaccurate after the contract is awarded.

Common mistakes

  • Ignoring missing data. Bidders often assume the buyer will sort out missing ELI data after the contract award. Once you submit your pricing, you own the risk. Always raise clarifications to request accurate data.
  • Underestimating pension costs. Failing to account for LGPS contribution rates or the legal costs of an admission agreement can wipe out the profit margin on a public sector contract. Engage an actuary or pension specialist during the bid phase.
  • Treating TUPE as a tick-box exercise. Generic bid responses that simply state "we will comply with TUPE regulations" score poorly. Buyers want a detailed timeline of consultations, meetings, and data transfers.
  • Planning immediate redundancies. Assuming you can immediately sack the incumbent staff to replace them with cheaper labour is illegal. Redundancies must have a valid ETO reason and follow strict consultation processes.
  • Forgetting mobilisation costs. Transferring staff need new uniforms, ID badges, and training on your CAFM systems. These costs occur on day one and must be priced into the mobilisation budget.
  • Failing to engage HR early. TUPE is a complex legal area. Leaving the HR team out of the bid process until the last minute is a recipe for disaster. Bring them in early to review the ELI data and help draft the consultation plan.
  • Assuming indemnities will save you. Many public sector contracts include standard clauses that attempt to limit the buyer's liability for TUPE errors. Do not assume you can easily sue the buyer or the incumbent if the data is wrong. You must actively manage the risk during the bid phase.

Frequently asked questions

Can we refuse to take on the incumbent staff?

No. If TUPE applies, the transfer of assigned staff is automatic by operation of law. You cannot opt out of taking them.

What if the incumbent provider refuses to share the TUPE data?

The outgoing provider has a legal obligation under Regulation 11 to provide ELI at least 28 days before the transfer. If they fail to do so, you can bring a claim in the Employment Tribunal for compensation. However, during the tender stage, it is the buyer's responsibility to extract this data to ensure a fair procurement process.

Do we have to match their exact pension scheme?

For private sector transfers, you must provide a minimum level of pension provision (usually a defined contribution scheme matching up to 6%). For public sector transfers under New Fair Deal, you must provide continued access to the public sector scheme (like LGPS) or a broadly comparable scheme certified by the Government Actuary's Department.

Can we change their working hours after the transfer?

You cannot change terms and conditions if the sole or principal reason for the change is the transfer itself. You can only make changes if there is an Economic, Technical, or Organisational (ETO) reason involving changes in the workforce, and even then, you must consult properly.

What happens if an employee objects to the transfer?

If an employee formally objects to the transfer, their employment will terminate on the transfer date. They will not transfer to your business, and they will not be considered dismissed, meaning they generally cannot claim unfair dismissal or redundancy pay.

Does TUPE apply to sub-contractors?

Yes, TUPE can apply to sub-contractors. If the incumbent provider sub-contracted the window cleaning, and you also plan to sub-contract the window cleaning, the sub-contractor's staff may transfer to your new sub-contractor. You must ensure your sub-contractors are aware of their TUPE obligations and that you have appropriate indemnities in place with them.

Further reading

References

[1] https://thorntonandlowe.com/tupe-requirements-key-considerations-tenders/ [2] https://cms.law/en/gbr/legal-updates/tupe-does-it-apply-to-facilities-management-contracts-and-if-so-does-it-matter [3] https://thorntonandlowe.com/tupe-requirements-key-considerations-tenders/ [4] https://www.acas.org.uk/tupe/advice-for-employers-and-employees/employee-liability-information [5] https://thorntonandlowe.com/tupe-requirements-key-considerations-tenders/ [6] https://thorntonandlowe.com/tupe-requirements-key-considerations-tenders/ [7] https://www.executivecompass.co.uk/blog/bid-management/tupe-procurement-documents/ [8] https://thorntonandlowe.com/tupe-requirements-key-considerations-tenders/ [9] https://www.find-tender.service.gov.uk/Notice/054895-2025?origin=SearchResults&p=1

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