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Tieto wins Stockholm’s multimillion IT outsourcing contract

Swedish capital switches IT services provider after “administrative error” ruled original contractor out of agreement

The City of Stockholm has found a new IT services outsourcing partner for its administrative operations. It has awarded the contract to Finland’s Tieto after the original contractor was ruled out because of a legal technicality.

The public tender for the deal was initially won by Norwegian IT firm Evry in 2016, but after a complaint and a court ruling, the contract has been awarded to Finnish IT services provider Tieto.

“We are pleased that we now, together with Tieto, can embark on our project to implement the next generation of IT services for the city’s administration and municipally owned companies,” said Ann Hellenius, CIO for the City of Stockholm.

The decision follows a Swedish court of appeal ruling in October that Evry’s bid should not have been included in the public tender because of a seemingly minor administrative error by the Norwegian company.

The IT firm submitted its bid as a group with Evry Ab and Evry Norge As. Although the bid included a copy of their cooperation agreement as requested, it failed to name the representatives for this group, which was a City of Stockholm requirement for all group tenders.

This error has now cost Evry the outsourcing deal, which is worth about SEK3bn (£264m). Tieto came second in the original tender contest.

And the decision could be costly. According to Computer Sweden, Evry’s bid was significantly lower than Tieto’s – SEK256m (£23m) compared with SEK332m (£29m) a year. But Hellenius said the new deal is cheaper than the city’s current agreement with Volvo IT (acquired by HCL in 2015) – and that is what matters.

The outsourcing deal covers joint IT services for Stockholm’s administrative operations and municipally owned companies. It includes workplace services, server and application management, and service desk. The contract is until the end of 2023, with the option to extend it by up to six years. Stockholm’s contract with Volvo IT/HCL will be gradually phased out.

The outsourcing deal is part of Stockholm’s digital transformation strategy, launched in April 2017, which sets an ambitious goal of Stockholm becoming the “world’s smartest city” by 2040.

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