HMRC signs five-year £169m contract with Fujitsu for VME platform

Supplier will host 13 HMRC applications on its virtual managed environment platform, following its role as an incumbent provider to the department under two different contracts

HM Revenue and Customs (HMRC) has signed a five-year deal with Fujitsu worth £168.8m for its virtual managed environment (VME) platform.

The contract will see 13 HMRC applications hosted on the platform and includes the option of potential modernisation and services for the applications.

Fujitsu has previously been the incumbent provider to the department under two contracts, including support of the old Customs Handling of Import and Export Freight (Chief) system, which HMRC is transitioning away from as it implements the new customs declaration service (CDS). Fujitsu’s Chief contract expires on 31 March 2021. The second contract, known as the prime contract, is for a series of applications and expires in June 2022.

The contract notice said that the current deal “shall terminate when the new contract takes full effect”.

Under the new deal, Fujitsu will provide its VME for a range of applications, including Chief and the related consolidated tariff system, VAT applications, a computerised environment for self-assessment, non-VAT accounting, which includes five different applications, trade statistics, VAT information exchange services and applications dealing with accounting summaries, customer overpayments and managing tax.

“The need for the new contract has arisen from delays to the programme (including uncertainty regarding the impact of the EU Exit final deal on the future, volume and operation of some applications),” said the contract notice. “Therefore, support for legacy applications is required, beyond the term anticipated by the Chief contract and the prime contract.

“As these are key applications, HMRC requires the secure and uninterrupted delivery of support to those applications and considers the award of the new contract to be the best option for securing delivery of those services until 2025, when it expects to have fully completed the programme.

“The award of the new contract to Fujitsu ensures the secure and continued support of the legacy applications on a reducing basis while the applications are transitioned/decommissioned over the next five years.”

The VME system has been in place with HMRC for more than 30 years, and Fujitsu was part of the department’s huge Aspire outsourcing deal.

Read more about HMRC and technology

  • Former digital and data chief at Centrica, Daljit Rehal, takes the helm at HMRC as chief digital and information officer.
  • As it disentangles the Aspire contract, HMRC has been working directly with key IT suppliers, with this latest agreement providing managed desktop IT.
  • Maxing Tax programme to be extended gradually until April 2023 to cover business below the VAT threshold and income tax self-assessments above £10,000 a year.

“The VME hosting platform is proprietary to Fujitsu and so VME-based services are technically only available from Fujitsu and are not available in the market from alternative third-party service providers,” the contract notice said.

It added that HMRC’s assessment is that there is “no alternative that would technically be capable of being successfully deployed before HMRC’s requirements for the run-off services come to an end”.

The department said that for “technical reasons” it was procuring services under the new contract “which only Fujitsu could provide and for which there was no reasonable alternative”.

Last month, HMRC signed a two-year extension to its managed desktop services contract to support its goal to continue to deliver a professional, efficient and engaged organisation. 

Through the agreement, Fujitsu said it would provide IT support for HMRC’s 65,000 employees, covering user and network services. It will also provide HMRC with dedicated service management, on-site support desks and what it describes as “committed project services”.

Read more on IT for government and public sector

Data Center
Data Management