BT/CSC dumped in Inland Revenue outsourcing race
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BT and CSC have been surprisingly dumped from the shortlist for the Inland Revenue's 4 billion mega-outsourcing contract.
18 July 2003 BT and CSC have been surprisingly dumped from the shortlist for the Inland Revenue's £4 billion mega-outsourcing contract -- leaving just the incumbent EDS and Cap Gemini Ernst &Young's partnership with Fujitsu to slug it out.
BT and CSC had been working on the bid for a year.
"Following the evaluation of the responses to the Invitation to Tender (ITT), received in March 2003, the following will go forward to the next stage... Cap Gemini Ernst &Young — in alliance with Fujitsu; and Revenue Professional Services — EDS in alliance with Accenture," said the Inland Revenue in a statement.
Anthony Miller, principal analyst at services specialist Ovum Holway, expressed surprise at the move. He had believed that BT and CSC's Fusion Alliance was the stronger of the two challengers, but the Inland Revenue clearly thought otherwise.
But Fujitsu — which used to operate under the ICL brand in the UK — and Cap Gemini will have to convince Inland Revenue management that they are capable of managing a public sector contract of this size, something neither has ever done before, says Miller.
The winners will have the task of supporting 70,000 desktop PCs, 177 IBM and Hewlett-Packard Unix machines and 200 ICL mainframes, as well as developing software for future IT projects at the Inland Revenue.
Renewal of the Inland Revenue contract had initially been considered a straightforward deal for EDS because the challenge of switching the management of such major IT infrastructure from one provider to another was considered overwhelming.
However, the Inland Revenue's management has been dissatisfied with many elements of EDS's management following a number of project failures during the last ten years.
The tendering process is now moving into its final stages, including a period of due diligence. The winner will be announced in December, before the new contract starts in July 2004.
However, BT remains in the running for an equally lucrative outsourcing contract in the Ministry of Defence. At the end of June, BT's RaDII consortium was one of four short-listed for the £4 billion, ten year Defence Information Infrastructure contract, called Future.
That contract is also being bid for in partnership with CSC, while EDS and Fujitsu have lined up together in one of the four opposing bids.
