Contract came with an initial seven-year potential term but will now run until 2022

Credit: Pxhere

HM Treasury’s long-standing “core IT” contract with outsourcer NTT Data is to be extended into an eighth year.

The ministry first signed NTT Data as its primary IT provider in April 2014. That agreement was scheduled to run for a maximum of seven years.

Having already been extended to its full, 84-month term – which is due to end on 30 June 2021 – the Treasury has acted early to agree a further one-year extension, taking the deal’s end date to 30 June 2022.

But, according to an extension letter, “the total contract value remains at £250m, as published in the OJEU contract notice” that was first released back in 2013.

“All other terms and conditions of the contract remain unchanged,” the Treasury added. 

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The department previously worked with Fujitsu, which was the Treasury’s sole supplier of IT services until the end of 2014. Once that engagement came to an end, the ministry launched its ‘ICT 2015’ programme, in which separate contracts were awarded for each of five ‘towers’ of service delivery: core IT; line-of-business applications; WAN; printing; and media and wireless.

The contract-award notice published in 2014 said: “HM Treasury… is transitioning its ICT supply chain to a new multi-sourced model and away from its current single outsource provider contract. In doing so, the ICT 2015 programme will need to procure on a disaggregated basis all of the primary unclassified and restricted ICT services used by the department”

It added: “To align with government strategy, increase the ability of SMEs to respond to the invitations to tender, and increase value for money, the future ICT services have been broken up into a number of service towers.”

NTT Data scooped the deal for the first and largest of these towers.

The IT and business-process-outsourcing firm is owned by £87bn-turnover Japanese telecoms giant NTT.

Since the start of the coronavirus crisis, public sector procurement rules have been relaxed to allow greater flexibility for direct contract awards and extensions of deals beyond previously agreed limits.