Last month’s announcement that all five remaining suppliers bidding for £2bn-worth of contracts for the government’s ID card programme have gone through to the next round has prompted critics to question the rigour of the procurement process.

The Identity and Passport Service (IPS) has yet to reject a single bidder from the original shortlist of eight ­- Accenture, BAE Systems and Steria dropped out of their own accord ­- while CSC, EDS, Fujitsu, IBM and Thales all went through to the next round.

IPS operations director Bill Crothers defended the process, saying that a move to drop a supplier would have been for PR purposes alone.

“We have done what we believe is best for the project ­ and that is to have more competitive bids to choose from,” he said.

But industry insiders have started to question the competitiveness of the scheme.
“CSC in particular is over-committed with the NHS National Programme for IT (NPfIT) ­ it should not still be in there,” said one source.

CSC is responsible for three of the five geographical regions of NPfIT -­ and took over some of the contracts from Accenture after the supplier pulled out citing the financial viability of the project.

Suppliers are worried that a results-based contract formula similar to that used in NPfIT will put the squeeze on their profits.

“It is no surprise three companies have dropped out already,” said one industry source. “And the Conservatives are saying they will pull the scheme if they win the next election, which looks increasingly likely.”

As the suppliers were announced, the Tories reiterated their commitment to cancel the scheme if elected -­ having already written to suppliers to inform them of this earlier in the year.

“Along with growing evidence of the risks and costs of ID cards, we have seen declining commercial interest, reflected in the dwindling numbers bidding for contracts,” said shadow home affairs spokesman David Davis.

The government has sought to allay these concerns by splitting up the scheme into a number of smaller projects, one of which it hopes to have completed before 2010.
This is a system to provide an interim capability for the ID cards that are being issued in 2009 for certain critical workers and foreign nationals.

The three-year contract will be worth about £10m, with the procurement beginning this summer.

IPS has also said that other parts of the scheme, such as the £500m application and enrolment system, will not be a waste of money if the scheme is scrapped because it can be adapted for UK passport allocation.

“The fact the government has split it up like this and is already trying to justify expenditure in the light of the scheme being potentially scrapped, suggests they are rushing parts of it ­ and this never bodes well,” said another supplier source.

But Ovum analyst Eric Woods said there is still money to be made for the vendors.
“Suppliers will have factored in political risks to the scheme, and they would have dropped out if they did not think it was worth their while,” he said.

Although the suppliers will be required to bid for different parts of the scheme, they are not contractually required to undertake some or any part of it ­ meaning they could still withdraw.

ID cards ­ a brief history

2001 Then-home secretary David Blunkett brings forward ideas for an ID card scheme in the wake of the 11 September attacks in the US. ID cards are proposed as a way of tackling terrorism, illegal immigration and identity fraud.

2004 The draft ID cards Bill and consultation paper is published. An original plan aims to take iris scans and fingerprints of applicants, with cards to be issued between 2008 and 2010. The Bill also envisages the creation of a National Identity Register with biometric and biographical details.

2006 The Identity Cards Act is given Royal Assent. New home secretary John Reid’s review of the scheme envisages that at first only those renewing their passport will have to have an ID card. To save money, the National Identity Register will be based on an existing Department of Work and Pensions customer information system.

2008 Home secretary Jacqui Smith announces that ID cards will only be compulsory for foreign nationals, airport workers and other critical staff from 2009. They will not be compulsory for other sections of the population, although after 2011 anyone renewing a passport will have their details put on the National Identity Register ­ regardless of whether or not they choose to have an ID card.

2010 Procurement of technology systems to support the scheme is staggered against a backdrop of mounting political pressure from the Conservatives and Liberal Democrats for the government to abandon the scheme.