Two years late and £100m extra IT2000 deal signed

The Home Office has finally signed the troubled £350m IT 2000 infrastructure and services contract - two years late and £100m...

The Home Office has finally signed the troubled £350m IT 2000 infrastructure and services contract - two years late and £100m more than expected.

Mike Simons

The 10-year Private Finance Initiative contract was awarded after a procurement process which saw the Sema Group, the original preferred supplier, dumped in November 1999.

The Government initially expected to award the IT 2000 contract in November 1998, when it was valued at £250m.

Home Office permanent secretary David Omand refused to give details on why Sema was dropped, but admitted that disagreements over the allocation of risk in the contract played a part.

The successful bidders, Pricewaterhouse-Coopers, ICL and telecoms provider Global Crossing, will own, operate and develop the Home Office IT and telephony infrastructure, including the provision of secure e-mail, Internet and extranet technologies for 4,800 desktops.

The group will also provide strategic business advice about major change projects. Finance for the venture will come from Dai-Ichi Kangyo Bank, one of Japan's leading commercial finance houses.

The contract is the first to pass through the Gateway Review process of the Office of Government Commerce, which is led by former ICL director Peter Gershon.

Omand said the deal with ICL was a "path-breaking contract" and that the Home Office had learnt the lessons of IT project disasters such as the Passport Agency and Immigration Service, which both hit the headlines in the summer of 1999.

Omand said he was determined to separate IT renewal from business process re-engineering. "This is not a big bang. We are not saying let's introduce a paperless office," he said.

ICL acting chief executive Richard Christou said the contract represented a framework for modernising the Home Office, "not one single project".

The deal will see 80 staff transfer to the new consortium from Sema and 14 from the Home Office.

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