CSC wins £400m MoD payroll administration contract

By Graeme Burton
18 Apr 2012 View Comments

IT services company CSC has won a £400m contract with the Ministry of Defence (MoD) to provide pay, human resources and pensions administration to the Service Personnel and Veterans Agency (SPVA).

This award comes shortly after the IT outsourcing specialist was slammed by the chair of the Public Accounts Committee, Margaret Hodge, for its failure to deliver "functional" software for the disastrous NHS National Programme for IT (NPfIT).

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CSC's rivals for the contract were incumbent HP Enterprise Services, who many insiders believed were in pole position to win the deal, and Capita.

CSC is now in discussions with the MoD to finalise the contract, which ought to be signed by mid-May. The deal will be worth up to £400m over seven years, according to the original tender documents, with an option to extend the contract to 15 years, potentially valuing the contract at up to £750m.

In December 2011, after learning that CSC was demanding further payments in order to complete its contracted work under NPfIT, Hodge suggested that CSC ought to be barred from bidding for further public-sector contracts.

"Any private-sector company that cares so little about the public interest that they are prepared to extract this kind of money from the public purse should not be given the right to work for the government again," she wrote in The Times newspaper.

The SPVA provides personnel, pensions, welfare and support services to members of the UK Armed Forces and veterans and their dependants. It was formed by merging the former Armed Forces Personnel Administration Agency (AFPAA) with the Veterans Agency.

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