IBM has beaten Capgemini to become the preferred bidder for the IT outsourcing contract at the Department of the Environment, Food and Rural Affairs, it was announced on Thursday.
Under the contract, which could be worth up to £850m over 10 years, IBM will manage and support Defra’s desktop IT infrastructure and business systems and develop a range of new applications.
Approximately 330 Defra IT staff will transfer to IBM when the contract begins and a detailed consultation process will take place with the trades unions over the coming weeks.
The initial decision to outsource IT at Defra provoked controversy in 2003, with one MP calling the decision “woeful”. The department told the committee that it had taken the decision to outsource even though it lacked an IT director or an IT strategy.
David Taylor, the MP for North-West Leicestershire, was a member of the Commons Committee that oversees Defra's activities and concentrates on the department's IT strategy.
"We on the committee were all disappointed at the weak, perhaps even woeful, approach to IT,” he said.
Soon after the committee's highly critical report, an IT director was appointed, who piloted the outsourcing procurement.
Alun Michael, minister of state for rural affairs, said he is confident that IBM will play a key role in transforming Defra and improving its service to customers.
“The agreement will create capacity to accelerate our pace of change, while reducing costs and increasing the quality of service delivered to staff,” he said.
Programme director David Myers added, “Building on the solid base of an excellent Defra IT strategy, this approach contributed to a very smooth procurement process which has been completed on time, with all delivery dates being hit.”