MoD signs with Palantir while HMRC is stifled by legacy

US tech continues to creep into UK public sector

British government departments continue their march towards the 21^st century, but some of the deals are controversial.

In the first instance, the Ministry of Defence has signed on the dotted line with US surveillance – sorry, “data integration and analytics” - company Palantir, a follow-on from the deal agreed last year.

The MoD awarded the new contract, worth £240.6 million, directly to Palantir rather than going through a standard procurement process, using a defence and security exemption to justify the move.

The deal, signed in December, will run for three years from 1^st April. A contract notice published last week describes it as “a follow on enterprise agreement… for continued licensing and support to data analytics capabilities supporting critical strategic, tactical and live operational decision making across classifications across defence and interoperable with Nato and other allied nations’ Palantir systems.”

Palantir has a storied history with the UK public sector, with many agreements seeing pushback from members of the public and stakeholders.

For example, when it failed to secure an expansion of its agreements with the NHS in 2021, the company was revealed to be trying to buy its way into the health service through supplier acquisitions.

More recently, OpenDemocracy covered an MoD-to-Palantir employment pipeline, the firm having hired four ex-MoD officials shortly before signing this recent deal.

HMRC tries to kill legacy...again

While the MoD lines up with Palantir, HMRC continues to wage its ongoing war against legacy tech, to the tune of £2 billion.

A spreadsheet of the tax collector’s procurement pipeline, seen by The Register, says the work will begin with a data warehouse transformation programme worth about £410 million. That is most likely replacing SAP ECC Business Warehouse.

SAP is also working with HMRC on an ERP upgrade worth £246 million, and a transformation of the tax system worth £275 million.

SAP won the latter contract without a tender.

AWS is in the mix, too, with a contract for AWS Public Cloud Compute worth £350 million.

The third-largest procurement in terms of estimated value is "Digital Platforms Run and Change Products," which is seeking IT to support application services, including legacy live services. It is worth about £306 million.

There are also four more procurements worth more than £200 million in the pipeline document, including a Mobility and Workplace services contract (£250 million); Digital Platforms Run and Change Platforms (£250 million); Data Centre Services (£220 million); and Legacy - Retained HMRC Services Contract (£214 million).

The final contract will replace the Core Business Platform Support and Maintenance Services agreement, which went to Capgemini – without a tender – in 2022.

HMRC has been trying to get rid of its legacy for well over a decade. So far, though, systems appear to be ageing out faster than the tax body can replace them.