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Inland Revenue sacks EDS

CGEY wins

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The Inland Revenue confirmed today that it has sacked EDS.

The ASPIRE contract to manage the UK's tax and national insurance systems, worth an estimated £4bn-£5bn over 10 years, is to be run by the Cap Gemini Ernst and Young consortium, comprising CGEY, Fujitsu and BT.

More than 2,000 EDS staff, based mostly in Telford, Shropshire will transfer to CGEY and some 900 will move over to Fujitsu under Transfer of Undertaking (Protection of Employment) - better known as TUPE - rules which safeguard workers rights for two years following an outsourcing switch. So there shouldn't be any job losses at foot soldier level. It could be a different story at the top.

The loss of the Inland Revenue contract will come as a huge blow to EDS, which has managed the department's computer systems for 10 years. At times, EDS has seemed to be the IT wing of the UK government, scooping up 60 per cent of the outsourcing contracts by value.

It is unusual for such a big outsourcing contract to change hands. But EDS is paying the price for last year's disastrous introduction of tax credits. The Inland Revenue, the self-dubbed "intelligent customer", appears to have escaped most of the political recriminations that followed, largely by successfully positioning EDS as the sole scapegoat.

CGEY will assume control of ASPIRE in June, 2004. In its lobbying against CGEY last week, EDS estimated that the cost of the handover at £60m.

Finally, let's not forget today's other loser, Accenture, EDS's junior partner in the Inland Revenue gig. ®

Related link

Inland Revenue press release

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Inland revenue poised to ditch EDS
EDS rallies troops over tax credits fiasco

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