Capgemini increases Aspire profits to £1.1bn

HMRC says cost of IT services will rise to £8.5bn

Capgemini is poised to more than treble the £300m it expected to make by taking over as IT services supplier to HM Revenue and Customs (HMRC), according to a Public Accounts Committee (PAC) report published this morning.

The 10 year Aspire (Acquiring Strategic Partners for the Inland Revenue) contract is now likely to net the company £1.1bn in profit.

The scale of Capgemini's potential profits have been criticised by the PAC, which says the department should have foreseen that IT requirements could soar.

Capgemini struck a £2.8bn deal with HMRC three years ago, but officials now estimate the department will spend some £8.5bn on IT services over the next decade.

PAC chairman Edward Leigh has demanded future additions to Capgemini's workload be 'rigorously benchmarked' to ensure prices reflect the actual work carried out.

Capgemini assumed responsibility for Aspire from EDS. Accenture and Fujitsu were also suppliers.

MPs have objected to paying Capgemini's bidding and transfer costs, which in the case of the national insurance system NIRS 2, were abortive because Capgemini ended up retaining previous operator Accenture as its sub-contractor following difficulties taking the system over.

Leigh says the £52m paid towards bidders' costs, including £37.6m to Capgemini - to encourage competition since EDS and Accenture were seen to have a huge incumbents' advantage - was 'hard to justify'.

'Any department doing this in future must show there is no other
cost-effective way of securing competition,' he said.