Transport for London has spent £100m on a temporary contract that is still running after five and half years and will be clocking up more costs until 2014.
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TfL gave a temporary IT contract to Computer Sciences Corporation in December 2006 after terminating an existing deal with Capgemini, claiming the stop-gap would be for just a year. But the temporary arrangement has been refreshed at least three times already.
TfL revealed the full cost of the temporary contract under coalition government orders to publish all contracts above £25m. TfL has like other departments not published its contract. But it did disclose a budget of £100m+ for CSC’s “Marathon”, the name of the temporary desktop computer contract.
A TfL spokeswoman said £100m was the total TfL had paid CSC under the temporary contract since 2006. The bill was inflated in January with another £21m for what the spokeswoman said was another temporary contract with CSC. This one would last until 2014.
She said TfL had extended its CSC contract again in 2011 while it conducted another IT review. Called “Project Horizon”, it was completed in January. But TfL still needed more time to work out how it should organize its contracts. In 2007, TfL said it needed just a few months to work out how to organize its IT contracts. Then it stalled for more time until 2009 when it launched Project Horizon.
The spokeswoman said: “In August 2011, TfL had a contract providing a single point of contact for all IT incidents, the central helpdesk was provided by CSC. Following the completion of project Horizon in January 2012, the decision was made to extend the CSC contract to 2014 in order to provide time for us to complete the sourcing review and undertake and award any resultant procurement.”
“Since the structural changes to TfL under Project Horizon, the information management team now operates for the whole organisation. In light of the new structure and emerging commercial and technological supply models we are in the process of reviewing the multi-sourcing arrangements to ensure they fully meet our business needs and provide the best service,” she said.
CSC revealed January’s temporary contract renewal in April, one week before its new CEO Mike Lawrie made his first presentation to Wall Street after joining the company in March. CSC had not had any good news in the UK since its 2009 cloud contract renewal with Royal Mail.
Liz Benison, CSC UK president, said in a press release: “We are delighted to be extending our relationship with TFL.”
The temporary contract was set up by Phil Pavitt. Now chief information officer at HM Revenue & Customs, Pavitt is locked into a £multi-billion contract with Capgemini until 2017.
After Pavitt left TfL for HMRC, the transport body claimed to save money on its IT by bringing services back in-house from CSC. This is known only to have amounted to £6.7m over 2007 and 2009, according to TfL’s board minutes.
Other budgeted TfL IT expenditure includes £100m+ with IBM for the congestion charge “enforcement” system, another £100m+ to Siemens for other congestion charge systems, £50-100m to NSL Limited for information systems and taxi licensing services, up to £25m to BT for an Automatic Vehicle Location system, up to £25m for SAP software licences and “maintenance”, £25m for SAP managed services and application hosting and £25m to Computacenter for other hardware and software.