The government IT outsourcing contracts that could go next

I was just looking through Ovum’s latest report about the IT outsourcing trends in central government.

The report lists the projects that have already been targeted for cancellation or face cancellation or renegotiation. It also outlines the projects that could go next in the government cull.

Already cancelled are Capita’s £430m twenty year Child Trust Fund programme, Capgemini’s £40m ContactPoint six year project and IBM’s National Identity Register deal worth £265m.

So here is what Ovum thinks could be next:

1 – Tata Consultancy Services faces the axe

TCS’s £600m Pensions Administrations and Delivery Agency could be the first to go. This was a big deal because it is the biggest government deal to be won by an Indian offshore service provider. There is a clause in the contract that states that when the first stage of the deal is complete in October 2010 there will be a decision on whether to continue or not.

TCS is responsible for IT services, system implementation and administration of the National Employment Savings Trust.

See earlier post about this.

 2 –  DWP deal with Fujitsu faces review

In March this year Fujitsu won a £330m contract to replace HP providing desktop services. The contract is over the new government’s £100m maximum cost ceiling and was only due to start at the end of 2010

3 – CSC National ID scheme deal could change 

It also thinks CSC’s £385m ten-year National Identity Scheme deal will be reviewed.


The report warns suppliers to look for growth outside the public sector but there is some good news.

This is that IT service providers “hold a trump card” because IT can help government deliver more for less. It also says that the government has not “waged war” on IT suppliers but just on projects perceived to lack value.

Opportunities in government will, according to Ovum, be outsourcing, BPO, shared services and G-cloud.

See also:

Ten ways to cut government IT costs

For the full report sign in with Ovum