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IBM secures DWP contract worth up to £2.1m for 6 months of cloud services

UK government department extends 11-year relationship following legacy application challenges

The UK's Department for Work and Pensions (DWP) has awarded IBM a contract for cloud services worth up to £2.13 million ($2.67 million) for just six months.

The deal began at the beginning of April, although a public procurement notice was only published in the past week.

It said the contract, which is set to run until 30 September 2022, will be worth up to £2.127m (c $2.67 million). It engages IBM via the G-Cloud 12 Framework Agreement (RM1557.12).

The contract award notice said that IBM would provide "service for a development, enhancement and migration programme of work across multiple product areas to reduce our reliance on heritage systems and provide an improved, performance, security and accessible offering to our consuming partners both internally within DWP and externally to other Government departments."

The DWP and Crown Commercial Services, which manages cross-government framework agreements, were contacted for further details.

The DWP's need to address risk in its legacy estate was underscored in January when a report from Parliament's Public Accounts Committee said the department should consider as a "matter of urgency" whether there are "cost-effective ways to upgrade its IT systems and enhance its administrative processes to ensure the quality and timeliness of management information and reduce the risk of repeated errors."

The report noted "a State Pension payment system that is not fit for purpose." According to MPs, "effective measures to mitigate against the system's intrinsic vulnerability to error constitutes a fundamental control failure in a critical part of the Department's responsibilities."

"The underlying IT system that it relies on to manage millions of pensioner records dates back to 1988 and is heavily manual," the report said.

It follows a September report from UK public spending watchdog the National Audit Office (NAO) which found that a legacy ICL-era mainframe was one of the causes behind the failure to pay more than £1bn in state pensions.

At the time of the NAO report, a DWP spokesperson said: "We are fully committed to ensuring the historical errors that have been made by successive governments are corrected, and as this report acknowledges, we're dedicating significant resources to doing so. Anyone impacted will be contacted by us to ensure they receive all that they are owed.

"Since we became aware of this issue, we have introduced new quality control processes and improved training to help ensure this does not happen again."

Last year Big Blue won a £25.25m DWP contract to keep the government ministry's ageing application estate up and running without outside competition.

The deal extended an application deployment services 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 £50 million and £75 million. The current contract extension is set to end on 22 September 2024.

It is unclear whether the latest deal and the ADEP deal are linked. We asked IBM to comment. ®

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