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Shout99.com previously reported how the Revenue sought to attract other bidders for the contract by offering to cover the transition costs as well as other financial incentives of up to £10 million in March.
The US IT outsourcing giant, EDS, has held the contract to maintain the Inland Revenue's IT infrastructure since 1994.
The new contract to supply IT services from summer 2004 went out to tender earlier this year under the 'Acquiring Strategic Partners for the Inland Revenue' (ASPIRE) programme. However, according to a recent article in The Times, three of the world's top IT companies: Lockheed Martin, the biggest provider of IT outsourcing to the US Government; Computer Sciences Corporation; and IBM, have declined invitations to bid due to the prohibitive costs involved, the contract's structure and the expectation it will be handed to EDS.
Mr Montagu defended the Department's technology services competition process in an open letter on the Revenue's website.
He said: "The competition is far from being open and shut. We recognised early on that EDS and Accenture potentially have an advantage of incumbency. So we have throughout made a concerted effort to ensure that potential suppliers fully understand that we are serious about competition will change strategic partners if that is what it takes to ensure we gain access to the right skills in the market place. Most key players in the IT industry now accept this.
"We undertook an initial market making exercise with over 10 potential suppliers - including IBM and CSC - to explain what we were looking for from a technology partner and for them to raise issues about the competition. Having listened to them, we took steps to "level the playing field" and will, where necessary, take further steps to ensure [short-listed bidders] continue to have an equal chance to succeed in this competition."
Short listed bidders for the new contract are: BT Group, Cap Gemini Ernst & Young and a joint tender by EDS and Accenture Alliance.
The bidding process for the contract will close on October 31.
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Richard Powell, © Shout99.com 2002
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