Revenue created a one-horse race

The Aspire competition, the Inland Revenue's attempt to inject some measure of competition into the tendering process for its...

The Aspire competition, the Inland Revenue's attempt to inject some measure of competition into the tendering process for its £4bn outsourced technology services contract by offering carrot-and-stick incentives to tender, is valiant and noble - but it is also doomed.

In a frank opinion article in this week's Computer Weekly, John Yard, director of business services at the Inland Revenue, makes an appeal for a business partner that can maintain the Revenue's legacy systems and transform its business IT beyond 2004.

"It is absolutely vital that we do not make such a fundamental strategic choice without inviting the market to bid," he says. In principle, Yard is quite correct. A one-horse race may suit the one horse and its owner, but for punters anticipating the spectacle of a hard-fought contest, it is without value.

The Inland Revenue contract is extremely unlikely to go to any other companies than the present incumbents, EDS and Accenture - which were thrown together when the Revenue assumed control of the National Insurance branch of the DSS - for a reason to which Yard himself refers in his article: the criticality of business continuity.

The Revenue became the architect of its current difficulties when it awarded the contract to acquire its 2,000 staff and run its 16 datacentres exclusively to EDS in 1994. By outsourcing all its IT to a single supplier, it triggered a steady haemorrhaging of knowledge to the Texan services giant.

EDS has spent the past eight years getting fully on top of the systems and sub-systems that underpin the UK's taxation infrastructure. Now that it has done so - remarkably successfully - is the Revenue really in a position to start afresh with another supplier that is back at square one?

Clearly not.

Had there been shareholders breathing down the necks of the Revenue's executives, they might have sought a multi-supplier outsourcing solution that would have produced healthy competition and therefore cheaper prices. As this was not the case, they instead took the view that managing one supplier was easier than managing several, and put all their eggs in the EDS basket.

Worse still, the Revenue's contract stated that it could only open a project or system to competitive tender if it could prove that the marketplace could offer a cheaper price than EDS. And, even then, EDS reserved the right to undercut the competition.

In an ideal world, EDS and Accenture would now together be fighting off seriously challenging tenders from competing organisations in a battle to retain the lucrative Revenue contract.

But this is the real world, and the Revenue's priority is to guarantee the integrity of its systems. After all, no downtime is acceptable in systems that process the taxes that allow the Exchequer to pay for hospitals, education and defence.

The Revenue may wish to see a competitive tendering process in place, but in its heart of hearts it must know that only its current suppliers can offer the business continuity such an important limb of government demands.

The Revenue's exclusive deal with a single supplier should never have been forged. Now the crows have come home to roost.

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