HMRC seeks partner to oversee IT contracts

Lonely mature tax collector, seeks strong, single IT expert for short-term relationship

Her Majesty’s Revenue & Customs is on the hunt for a partner to help manage the transition away from its multi-billion pound bottomless pit of an IT contract.

‘Aspire’ is the tax authority’s decade-old outsourced IT contract and has been a pain point for nearly as long. The government now wants to move both hardware and systems back in house and has issued a £40m two-year tender for a private adviser to oversee the project.

Keeping in line with Cabinet Office’s policy aimed at leveling the government contract playing field, HMRC has also said that it wants to award up to 400 short-term deals with smaller suppliers, replacing the current mega-deal with Capgemini.

The current contract is one of the largest of its kind in the world, and by far the biggest in UK government, accounting for 84% of HMRC’s ICT spend and costing over £8bn between 2004 and 2014. The figure is twice the cost anticipated when HMRC procured the contract, which is due to come to an end in 2017.

While the move towards a leaner more agile solution is to be applauded, and will undoubtedly have many channel players licking their lips, the government has a less-than-stellar track record when it comes to IT projects.

Anthony Miller, analyst for TechMarketView, said that managing 400 suppliers without a prime contractor running the show was easier said than done.

“I would suggest that any IT supplier seriously thinking of taking on the challenge of advising how to make this project work would either want to have an ‘all care, no responsibility’ clause firmly cemented into the contract, or ask for a darn sight more than £40m,” Miller commented.

Indeed, even the Public Accounts Committee has said that, on this occasion, it may be a case of better the devil you know, arguing that the tax collector has neither the experience nor the internal talent to keep all these balls in the air.

“HMRC anticipates meeting its future ICT requirements with a 'mixed economy' of small and large suppliers,” the committee wrote in its report. “However, since 2006-07, some 84% of HMRC's ICT spend has been through a single supplier under the Aspire contract.”

“Getting the skills to manage multiple suppliers, and to design and integrate technology, is a pre-requisite for the success of the proposed change. HMRC believes that it is an attractive employer for ICT specialists due to the scale of its digital ambitions and it plans to expand programmes to recruit graduates and apprentices,” the report stated, adding that constraints on public sector pay was getting in the way of recruiting top talent.

“Although expensive, the Aspire contract has provided stable systems to support the collection of taxes, over £500 billion in 2013-14. A failure of HMRC's ICT could put at risk the timely and accurate collection of tax, potentially resulting in reduced revenue,” the report concluded.

The Revenue disagrees. With an air of complacency, the likes of which only government bodies can muster, HMRC said in a statement:

“We are making significant progress in the phased transition from the Aspire IT contract. The tender exercise for a transformation partner is one of the steps in working towards the 2017 deadline. We have developed considerable internal talent within HMRC, but we will also use specialist external help from the market and across government to make this transition a success."

For suppliers brave enough to get into bed with the taxman, there will be a supplier event held in London next week, and interviews with potential candidates taking place week commencing 20 July. The contract is expected to begin 1 September 2015.

Read more on Finance and Credit