Cabinet inherits dumped Compaq kit

The Cabinet Office has been left with millions of pounds worth of Compaq kit after the computer manufacturer was dumped as...

The Cabinet Office has been left with millions of pounds worth of Compaq kit after the computer manufacturer was dumped as preferred supplier status on the Government Gateway project.

Mike Simons

Cabinet Office minister Ian McCartney said Compaq received £5.6m after last year's unsuccessful bid for the project to build the middleware that links the UK online portal with government departments' back-end systems.

Compaq lost the contract after the Office of Government Commerce expressed doubts about the viability of the proposals. The lead role was then taken by Microsoft.

Public sector outsourcing experts have told Computer Weekly that it is unprecedented for a supplier to receive payments for a failed bid.

But the Cabinet Office this week insisted that Compaq had not been "paid-off".

"Compaq were paid a total of £5.6m (including VAT) for work undertaken in connection with the Government Gateway project," said a spokesman.

"Of this, £2.2m worth of hardware, consisting of servers and communication equipment, has been returned to the Cabinet Office."

The Inland Revenue, Cabinet Office and EDS have purchased items of this returned hardware, while more kit has been reused in testing the Gateway.

"The Cabinet Office remain confident that all the hardware will be reused," the spokesman said.

The bulk of the payment to Compaq, said the Cabinet Office, was for development work the company undertook before its role in the project was terminated.

"This work made an important contribution to the future development of the project when management was taken back into the Cabinet Office," said a spokesman.

"The Government took a tough decision to terminate the contract when it had concerns about how the project was proceeding.

"This was as part of a robust management structure of risk assessment, and reflects the prudent and responsible approach taken from the start," added the spokesman.

Details of payments to Microsoft and other suppliers are hidden behind a veil of commercial secrecy but McCartney told MPs that the first phase of the Gateway project would cost £18.3m in addition to the £5.6m paid to Compaq.

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