DWP tenders £700m IT deals

The Department for Work and Pensions (DWP) is looking for suppliers for IT contracts worth £700m, as part of plans to shake up its technology provision.

But some suppliers are concerned that the requirements are so general it is unclear what they are being asked to bid for.

The department's IT is currently outsourced under two contracts led by services firm EDS.

The new Unity framework deals are part of plans to move to a more multi-supplier environment, but they have no implications for existing agreements.

'Through the Unity contract the DWP is looking at establishing framework agreements to secure additional supply routes for future IT business, including re-letting existing contracts as they come to an end,' said a spokesman.

The contracts are to be awarded in June 2004. But so far details cover every conceivable type of project - including application development, infrastructure solution design, build and operation and client-side IT consultancy - while committing to no specific programmes or requirements.

Because Unity is a framework deal there is no actual award of business at this stage but it will cover a range of 'packages' of work over its four-year life span, says the DWP.

Sources say suppliers are concerned they will be expected to spend many millions of pounds bidding in yet another huge government procurement, with only vague requirements and an unspecified return as a guide.

'Is the DWP wasting a lot of government and industry money running competitions? And is there business to be had at the end of it?' said an insider.

In-house expertise will become increasingly important, says Robert Morgan, chief executive of outsourcing advisors Morgan Chambers.

'Taking a fragmented approach is potentially expensive for the taxpayer and dangerous if government doesn't design and implement high-quality governance,' he said.

'Part of the reason for government outsourcing IT originally was it was never able to attract staff as competitively as private enterprise.'

One of the aims of the DWP's modernisation programme, of which Unity is a part, is to improve supplier performance.

'The department's focus is getting the most out of suppliers as a whole, and encouraging collaborative working,' said the spokesman.