IBM joins Accenture in the 'no competition' UK govt club: Fights off no one for £25m contract extension from DWP

'High risk of disruption' means Big Blue makes gov bods 'appy' for next 3 years

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IBM has grabbed a £25.25m contract extension from the UK’s Department for Work and Pensions without outside competition, to keep the government ministry’s ageing application estate up and running.

The apparently easy money is linked to an application deployment services (ADEP) contract, which initially included support for the £2bn push to build the government’s controversial Universal Credit system.

IBM was contracted onto the ADEP framework in 2011 to help support or build 60 applications including a customer information system, resource management, fraud referral and intervention management for an initial seven years in a deal worth between £50m and £75m.

In 2018, the parties agreed a three-year contract extension, which is currently due to expire on 22 September 2021.

According to a tender notice, “an extension of up to an additional three years to 22 September 2024 has become necessary and will be executed to mitigate the high risk of disruption to the critical public services these applications support.”

(Keen-eyed readers will notice the name and address of the contractor/concessionaire is apparently Accenture UK Ltd rather than IBM, but a UK.gov spokesperson assured us this was an error, and the named contractor was supposed to be Big Blue. The Reg was told the erroneous notice will be replaced by a corrected copy within the next few days.)

IBM has been given the £25.25m extension without competition as “a change of contractor cannot be made due to technical and economic factors” while an “extension period is needed to ensure the Department can continue to support live service and provide business continuity for the applications and critical public services”, the notice said.

In August, Accenture got a similar deal from the DWP, which handed the outsourcer £20m because the “technology stack is aged and requires significant upgrading that would be extremely difficult without existing knowledge of the solution.”

Accenture is set to support applications including the Pension Transformation Programme Customer Account Manager, which is based on a customised version of Siebel’s CRM software, providing customer account management with integrated telephony across Pension Centres and other departmental offices.

Meanwhile, IBM is set to support more of a pared-down portfolio of products, despite getting a larger slice of the money pie. “Only four applications will be covered by the ADEP contract during this [IBM] extension period,” the contract notice said. It explained that 47 of the relevant DWP applications “will have been exited from the ADEP contract by the date of the extension (22 September 2021).”

The department will either decommission, in-source or replace these applications with “new digital services”, it said.

This would leave IBM to support the Customer Information System, Provider Referrals and Payments, along with the Bank Liaison and Automation and Customer Contact and Fraud Referral and Intervention Management System (FRAIMS). FRAIMS, for example, is integral to investigating potential fraud within the government’s Universal Credit system, a £4.6bn [PDF] IT and change programme which started off in 2010, and by 2018 was still “unproven” in value, according to UK public spending watchdog the National Audit Office. ®

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