Government issues £4.2bn tender to update HMRC's legacy applications
The contract's value might reach £4.2 billion over the course of four years
The Crown Commercial Services (CCS) has published the contract notice for the Digital and Legacy Application Services (DALAS) framework to update the aged legacy applications used by the HM Revenue and Customs (HMRC).
The contract's value might reach £4.2 billion over the course of four years.
The purpose of the DALAS framework is to provide HMRC a strategic gateway to support the delivery of future application services and to move it toward an application services support model that is less dependent upon legacy technologies.
The framework will provide a commercial vehicle to replace current contractual agreements that are set to expire between September 2023 and January 2025.
The framework will be accessible to Central Government departments and all other UK public sector bodies, including Local Authorities, Police, Fire and Rescue, Health, Education and Devolved Administrations.
HMRC published a prior information notice in August to initiate preliminary discussions with suppliers before the formal competition begins.
The notice stated that the multibillion-pound expenditure would be divided over four years, starting in July 2023. The budget limits the total amount that may be spent on the contract per financial year at £1.125 billion.
The HMRC last week released a contract notice with further information on the procurement's timeline.
The notice states that the invitation to tender - the process through which suppliers compete for spots on the framework deals - will be split in different phases.
Phase 1 will start in February of next year; a date for Phase 2 has not yet been set.
It is expected that invitations to tender will be issued to the successful early-round suppliers in the month of February 2023.
Consulting, software development, internet, and support are among the contract lots covered by Phase 1.
The maintenance and support of new or existing custom applications, as well as education on subjects like DevOps, Scala, Microsoft Dynamics and SAP are all included in this phase.
With more than 600 systems, 800 terabytes of data and a 24/7 IT operation, HMRC has one of the biggest IT estates in all of Europe. It serves more than 5 million business taxpayers and 45 million citizens.
The size of HMRC's IT systems has made it difficult for it to manage the providers required to support them.
It began the £10 billion Aspire contract with Fujitsu and Capgemini in 2004, which - according to Parliament's spending watchdog - offered reliable but costly IT systems.
The agreement was supposed to be in effect until 2020. This year, Capgemini won work that had originally been given under Aspire, although HMRC claimed that this was not a continuation of the mega-deal.
The National Audit Office's director issued a warning to HMRC in November 2020 regarding the investment required to update old applications due to prior cost-cutting measures.
At that time, comptroller and auditor general Gareth Davies said: "HMRC has recognized that, due to the need in the past to forgo operational maintenance and upgrades to its systems to secure cost savings, its IT systems now constitute a significant risk to the Department. This will require significant investment and will need to be at the heart of any future Spending Review settlement."