Bidding opens for £1.4bn Defra deal

The Department for Environment, Food and Rural Affairs (Defra) is to outsource its IT in a deal worth up to £1.4bn.

Last week, Defra issued a tender inviting companies to bid to run its IT systems.

Project costs have risen dramatically from previous estimates of £350m due to increasing reliance on technology in developing new services.

The contract is now expected to be worth £85m a year to the successful bidder. It will be awarded for an initial seven to 10 year period, with the ability to be extended to 17 years.

A spokesman for Defra says that initial bidders will have until 12 May to register their interest, with the contract due to start by summer 2004.

Defra is looking to technology to deliver service improvements in areas such payments and management information to farmers, disease monitoring, and livestock and land registers.

But the decision to outsource has not been welcomed by all MPs.

Speaking in the House of Commons, David Taylor, Labour MP and member of the Environment, Food and Rural Affairs Select Committee, said the decision did not consider whether outsourcing was appropriate.

'The Department rushed to finalise its IT strategy in response to criticism from the Select Committee. That strategy did not exist prior to the decision to privatise the IT services. It is therefore a strategy to support the programme rather than reflect the business needs of Defra,' he said.

Taylor, a former IT manager at Leicestershire County Council, said that his 18 years industry experience had led him to conclude that public sector outsourcing was 'the last desperate act of an IT-illiterate top management' and that 'IT suppliers often regard Government as a cash cow'.

If Defra was contracted to a single supplier during the foot and mouth crisis, it would not have had the flexibility necessary to establish the temporary communication networks needed, said Taylor.

But the project has already received approval from an independent review, said Alun Michael, Minister for Rural Affairs.

'The programme is a big undertaking. We would not be doing this if we did not believe that it was the right way forward for the Department,' he said.