Department’s 17-month extension takes contract length to cumulative tally of 17 years

Credit: Nick Ansell/PA Wire

The Department for Environment, Food and Rural Affairs has cited the demands of the Brexit process as a key reason why it is spending £30m on extending its long-term engagement with IBM for a further 17 months.

Defra has worked with the technology titan since 2004. The deal – which was extended last year to its current end date of 2019 – is now to be stretched out by a further 17 months. When it finally concludes in 2021, IBM will have provided IT and services to the department for a consecutive period of 17 years.

The new extension announced in a recent contract notice comes at a cost of £30m. This takes the total lifetime worth of the deal from £1.445bn to £1.475bn.

Defra is one of a number of Whitehall departments engaged in a gradual process of breaking up monolithic outsourcing deals and moving towards a multi-supplier environment. This programme, dubbed UnITy, is working to disaggregate the IBM contract, as well as the Environment Agency’s long-term engagement with Capgemini – which was also extended last year by a period of 18 months.

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The contract notice outlining the IBM extension said that transferring services from the vendor giant to other suppliers is proving difficult while simultaneously undertaking “substantial application development and maintenance services required as a result of the United Kingdom’s exit from the European Union”.

The notice also points to the “increased costs of project management and technical resources needed to manage safely the transition and development of new applications” as a reason for extending the deal. 

Also cited as contributory factors were “increased risk of delay or system failure during transition… [and] increased and unnecessary costs of additional project management and technical resource”.

The scope of the IBM contract includes “a wide range of IT, telecommunications and business-change services”, covering software, hardware, and support services.

It also provides for “the design of a revised environment, with a significantly enhanced technical infrastructure and applications, and improved associated processes”.