EDS fails to bid for £850m Defra outsourcing deal

Accenture, Cap Gemini Ernst & Young and IBM have been shortlisted for the controversial outsourcing contract at the Department...

Accenture, Cap Gemini Ernst & Young and IBM have been shortlisted for the controversial outsourcing contract at the Department for Environment, Food and Rural Affairs, despite concerns about strategy from users and MPs.

EDS, the number-one IT outsourcer to central government, did not bid for the contract, a company representative said.

Last year the Public and Commercial Services (PCS) union threatened strike action over the department's plan to outsource its IT and warned that up to 1,000 jobs could be threatened.

MPs have also criticised the 10-year, £850m contract. Earlier this year, Labour MP David Taylor launched a fierce attack on Defra's "woeful" decision to outsource its IT.

The former Leicestershire County Council IT manager condemned the move to outsource before Defra had an IT director or a coherent IT strategy.

Analyst group OvumHolway said, "The fact that there is resistance to this contract is unsurprising."

In January 2002, the Office of Government Commerce warned that the project would be very high risk unless shortfalls in skills and resources were met, according to the analyst group.

"Defra was forced to make a number of changes before tendering the contract. Changes included designing a future IT architecture and strengthening its internal management by appointing an IT director with extensive experience of outsourcing," OvumHolway added.

Defra says that there will now be "detailed discussions" with the three shortlisted bidders, with a contract due to be signed in June next year.

The successful bidder will play a key role in the Developing Defra programme, the department's long-term modernisation plan, which aligns corporate services and systems to better support business needs.

A Defra spokesman said, "It's not just a question of continuing to provide what is already here - we're looking for a partner who can support Defra through the changes we are undergoing."

A spokesman for the PCS said the union was closely monitoring developments at Defra. He said, "We don't believe that outsourcing this function in this instance will provide value for money."

Defra tried to reassure the union on jobs. "The intention is that no jobs will be lost," said a spokesman.

He added that any IT staff transferring to the successful supplier would be protected by Transfer of Undertakings Protection of Employment (Tupe) regulations.

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