Capita and Updata ink £325m Scottish PSN deal

BT disses tender process, fire legals for 'damages'

Capita and Updata Infrastructure UK pipped BT and a joint bidding team from Vodafone and Virgin Media to scoop up the mega Scottish Wide Area Networking (SWAN) framework gig.

The nine-year contract, valued at £325m, involves building and running a public sector network to be accessed by up to 4,600 sites in the country, including schools, hospital, local councils and GP surgeries.

The pair have already tag teamed in previous tenders, and as revealed by us last week, Capita have currently got an offer on the table to buy Updata that is being considered by management and VC backers.

Capita confirmed that four "vanguard" organisations accounting for 30 public sector bodies - NHS Scotland, Education Scotland, Pathfinder North and Pathfinder South have committed to the network. These are expected to generate revenues of £110m over the first seven years.

The agreement is designed to promote "infrastructure and service sharing" said Ian Crichton, CEO at NHS National Services Scotland.

The contract win will give Capita a "platform" to spread its tendrils across the Scottish government space to fire off "additional services and build our business here," said outgoing CEO Paul Pinder.

This is the first "big seal" Capita has won in the networking arena since buying Synetrix and its broadband and infrastructure services play in 2009, said TechMarketView director Tola Sergeant.

"Failure to secure SWAN is a particular blow to BT, which currently provides networking services to NHS Scotland via its N3 contract, which was worth £530m over seven years when first signed in 2004," she said.

BT fired a legal at NHS Scotland last December when Capita/ Updata emerged the preferred bidder for SWAN, citing flaws in the tender process, and the framework was held back.

Last month Judge Lord Malcolm lifted this hold on the contract, and BT has confirmed to us that it will pursue litigation as a "damages claim", believed to be for £20m, which means SWAN can get going in April.

"Though BT's primary aim was always to seek a re-run of the procurement process, the case will now proceed as a damages claim, Lord Malcolm having found damages to be an appropriate remedy for BT to seek for that breach," BT said.

"We believe that it will now be unclear whether the most economically advantageous tender will be awarded…our bid was more than £10m below the price for which maximum points could be awarded under the National Services Scotland scoring process," it added. ®

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