HMRC launches 20 million tender for IT consulting

19 October 2015

The HMRC has launched a £20 million tender for consulting firms to guide its IT department in a move away from a one sized mega-project IT system operated by one main contractor to one that is open to many smaller and mid-sized IT contractors. The reason for the decision is increased control over projects, as well as increased competition lowering profit-making. The department is looking to make the changes by 2017, when its current contract with Capgemini ends.

Since the mid-1990s, the HM Revenue & Customs (HMRC) has gone for a one player mega-contract approach for its IT needs. The first contract going to EDS, followed by Capgemini’s Aspire IT framework which started in 2004 and is contracted to run until 2017.

Whereas a one contract approach has advantages – such that the main sub-contractors Fujitsu and Accenture are all co-ordinated by Capgemini – there have also been issues raised by the approach. A 2014 National Audit Office report highlights that, by giving full control of IT to one contractor, the department lost direction and control of its ICT, lost flexibility to get things done with the right supplier quickly or make greater use of cross-government shared infrastructure and services.

HMRC one player mega-contract run by Capgemini

Further issues highlighted by the report are that, through the HMRC’s dependence on a single supplier, the department becomes dependent on the expertise of its suppliers. Recent benchmarking studies also show that of the around £10 billion the project is expected to cost by 2017, Capgemini will be making a tidy 16% profit, amounting to £1.2 billion. This is more than double the £500 million original projection.

Changing direction
To end the excessive profit making, as well as gain more control over its IT estate, the HMRC is looking to change the way in which its IT systems are operated. It is seeking for consultancy advice worth up to £20 million to move away from its single Aspire outsourcing arrangement towards a more varied outsourcing approach that involves a number of smaller contracts that manage the HMRC’s IT systems.

Under the new procurement system, the department will seek to have its IT systems managed by up to 400 IT subcontract suppliers, with no contract worth more than £100 million. The new way of operating is expected to generate a number of advantages, which include the ability for a wide range of contractors to tender, while opening up the government service to smaller and medium-sized IT contractors and services companies that can compete for contracts.

To make the changes, the HMRC recently advertised for a tender, stating it is looking for an expert firm that can see that the HMRC “needs an injection of strategic-level experience and capacity to support people and culture transformation... HMRC will require the supplier to provide strategic input to the planning of this activity and for support for senior line managers in delivering it.”

HMRC seeks new IT procurement system

Future havoc
Not everyone believes however that bringing in a large number of small players will improve the quality of service or lower operating costs. For instance, Mark Dearnley, the department’s Chief Information and Digital Officer, says that getting rid of Aspire for a new system could itself cost up to £600 million. The government’s Chief Commercial Officer Bill Crothers warns that if wide-ranging changes are to be made then planning needs to start early. “This is enormous, risky and important, and that should guide what we do. Sitting behind this is getting better capability, being a better client and doing things in a phased way as much as possible...we should not be complacent,” he says.

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Capgemini provides IT services for BAE Systems Maritime-Submarines

24 April 2019

BAE Systems Maritime-Submarines has confirmed a five-year contract with Capgemini to take over the provision of a spectrum of IT services in the UK. The deal will help BAE Systems Maritime-Submarines reduce the cost of IT from its base in Barrow-in-Furness in Cumbria.

Since the firm’s UK profits were found to have halved in 2018, Capgemini has been working to improve its offering and attract new clients. In the summer, the global IT services consultancy combined a number of its creative wings to form Capgemini Invent, while a deal with Amazon Web Services enabled the firm to improve its cost-saving digital offering to clients looking for IT outsourcing work.

In the last year, Capgemini has subsequently won a series of contracts leveraging its IT delivery services on behalf of a variety of entities. The firm partnered with Statoil to deliver digital innovation across the company, as well as taking a role to innovate the fan experience of the Rugby World Cup 7s tournament, and replacing Atos as the IT services provider of McDonald’s

Capgemini provides IT services for BAE Systems Maritime-Submarines

Now, the firm has continued this surge of new business with the confirmation of a partnership with BAE Systems, which will see Capgemini collaborate on a key defence contract. Capgemini’s five-year contract with BAE Systems Maritime-Submarines will see Capgemini take over the provision of a spectrum of IT services for the BAE wing in the UK, including service orchestration, networking, hosting, end-user computing, DevOps, reporting and analytics, automation, and a digital service desk.

BAE Systems has been looking to improve its bottom line in the UK in recent years, and the move is aimed at transforming its Maritime-Submarines business IT delivery, allowing the company to take advantage of innovative digital technologies, create better user experiences, ensure high service availability, and reduce the cost of IT, from its base in Barrow-in-Furness in Cumbria. Capgemini’s IT solution was selected because of its ability to support the company’s evolving requirements, including the need to further enhance the responsiveness of the IT service, and effectiveness and agility of the delivery model.

Stephen Cole, CIO, BAE Systems Submarines, said, “As we embarked on this critical programme for our Submarines business that will deliver improved agile digital services, world-class service transformation and orchestration capabilities underpinned by very strong references were essential in our selection process. We are confident that Capgemini met these requirements and is the right partner for us. The team really understands where we are trying to get to as a business and its collaborative approach alongside its commitment to developing skills in the local area were paramount to our decision.”

Paul Margetts, Managing Director, UK Business Unit at Capgemini, added, “We are delighted to expand upon our business relationship with BAE Systems. Having worked with the company over the past four years, we have seen the tremendous opportunities for change that this programme presents and are hugely excited to be part of the journey at BAE Systems Maritime-Submarines, to help the company make a step change and satisfy new business requirements. We also look forward to increasing our involvement with the local North West community and Barrow in particular.”