Organisation publishes details of commercial plans for provider to ‘take over from the incumbent rapidly, virtualise and transition to cloud, and transform operation’ before the implementation of a new system
The Post Office has alerted the market to a £500m opportunity for new suppliers to take over management of the Horizon IT platform before delivering a long-term replacement.
Post Office Limited (POL) has published a commercial planning notice outlining its intent to award a two-lot framework for “multi-sourcing of Horizon IT services”. This deal will cover the support of existing tech and implementation of new systems, and will last for a potential term of 12 years.
The first lot is for a “replacement service provider” that will “walk in and take over (WITO) from the incumbent rapidly, virtualise and transition to cloud, [and] transform operations”. This lot is scheduled to come into effect in early June 2026 and the chosen firm – that is set to take over from Horizon developer and long-term Post Office supplier Fujitsu – will be tasked with providing “the management and execution of activities for all physical and digital infrastructure and all data within the datacentres used for the Horizon service”.
The notice adds: “Lot 1 will require the supplier to: take over the existing Horizon Services… on a WITO basis (excluding network interconnections between datacentres); be responsible for maintaining and supporting IT infrastructure within the datacentre; manage bespoke applications and integrations; stabilise the current Horizon services; and execute key transformations such as cloud migration.”
The chosen company will be appointed to an initial five-year engagement, valued at £322.8m. The deal can be extended for a further two years if POL decides that it needs to “ensure key transformations and transitions have concluded”.
The second lot is dedicated to the provision of a new electronic point of sale (EPOS) system to replace Horizon. Unlike the outgoing platform – which was created by Fujitsu specifically for the Post Office – the replacement system will be a commercial off-the-shelf product (COTS), the notice indicates.
The supplier of this platform will be appointed to a contract beginning in July of next year and running until at least 2036 – and potentially 2038. Estimated spending on this section is £169.2m, adding up to £492m across the two-lot framework.
The notice says: “The Lot 2 COTS EPOS software provider shall be required to: assess and select appropriate EPOS COTS solutions tailored to POL’s future needs; ensure compatibility with existing systems (where applicable) and enable future enhancements; support implementation, including configuration, testing and rollout; comply with the target operating model implemented to support ongoing operations; and provide ongoing support, updates, and optimisation services. The… supplier must be capable of delivering a modern, scalable, and future-ready solution for a term of 12 years.”
Related content
- Auditors query Horizon compensation data gaps in DBT accounts
- ‘A complete lack of control’ – how Horizon highlights the public sector’s over-reliance on outsourcers
- Post Office to issue 2026 tenders for £120m Horizon deals for ‘ongoing development’ and datacentre ops
A formal tender has not yet been issued, and the Post Office indicated it expects to issue a contract notice inviting bids from prospective providers around the end of June.
POL’s issuing of the planning notice comes about six weeks after it was revealed that the organisation’s latest one-year extension with Fujitsu – which runs until March 2026 – cost £75m. Since Horizon was first implemented in 1999, the Post Office’s spending with the tech firm has risen from about £1bn to almost £3bn, as of the latest extension.
Last month, meanwhile, government sought advice from regulators over the “possible market distortion” caused by its plans to provide a £136m subsidy to support the replacement of Horizon.
The planning notice adds: “The current service being provided to POL relies on a system known as Horizon to process all of its transactions with customers which includes numerous legacy systems and assets. The suppliers will be required to take on delivery of relevant parts of the Horizon services within the respective lot scope and provide, in each case where relevant, transition and transformation services to modernise and streamline the Horizon services.”
In the years after its deployment, faults with the Horizon system led to almost 1,000 sub-postmasters being wrongfully prosecuted for fraud or false accounting in what is typically regarded as the biggest miscarriage of justice in British legal history. Interest in the scandal grew following the broadcast last year of a major TV dramatisation – since when governments in Westminster and Holyrood have expedited programmes and legislation to effect mass exonerations and financially compensate those wrongfully convicted as a result of the defective technology platform.
