The government is locked into using one of its major outsourcing suppliers, Accenture, more than two years after the company was paid £14m as part of the closure of its contract to run national insurance systems.
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The tie-in between HM Revenue and Customs (HMRC) and Accenture on the running of the National Insurance Recording System 2 (Nirs2) shows that it is not always possible to dislodge a company whose staff have a profound understanding of business systems and processes that are critical to the smooth running of the organisation.
Even though Accenture lost its joint bid with EDS three years ago to continue running tax and national insurance systems, it is being retained for its expertise in running Nirs2, which holds details on more than 60 million people.
When in 2003 the two contracts for running tax and national insurance systems were combined and re-tendered under a competition called Aspire, Capgemini and its partner Fujitsu won the contract.
However, Computer Weekly has learned that only EDS has been replaced - Accenture's work passed initially to Fujitsu but was handed back.
And Accenture's status as an irreplaceable expert on Nirs2 has been reconfirmed by a joint HMRC and Capgemini decision to renew its work on Nirs2 beyond July 2007.
Attempts to transfer Nirs2 work to new suppliers have run into several barriers:
● HMRC had limited in-house knowledge of the IT used in Nirs2
● Changing the contractor as part of Aspire involved Nirs2's hardware, software and operating system being transferred from equipment hosted by Accenture to Fujitsu. But Capgemini and Fujitsu "encountered major problems in the system build", said the National Audit Office.
● Despite the £14m paid to Accenture for HMRC to continue using Nirs2 when Capgemini won the Aspire deal, Accenture retained copyright over the Nirs2 software
● Auditors found that initially the degree of collaboration between Accenture and the incoming supplier "was not as strong as in the main transition [with EDS] but Accenture did meet its obligations".
An HMRC spokesman said Accenture was being retained as a "material subcontractor". He added, "We have now made arrangements to extend the availability of Accenture skills beyond the end of year three of the Aspire contract."
A spokeswoman for Capgemini said Accenture was a best-of-breed partner providing services at "agreed standard contract rates - ie, at no extra charge to HMRC".
Accenture declined to comment.