HMRC’s £40m deal with ‘tech delivery partner’ requires £2 in every £5 to be fulfilled by SMEs

Written by Sam Trendall on 9 May 2022 in News
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Tax agency awards two-year contract to large IT consultancy – but stipulates that it must cultivate an ecosystem of smaller firms

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HM Revenue and Customs has awarded a major deal that will see CGI serve as the tax agency’s “business partner for new technology delivery” over the next two years.

More than £40m is expected to be spent during that time, with the contract stipulating that the Canada-headquartered IT services heavyweight must cultivate a supply chain through which £2 in every £5 is spent with SMEs. The terms of the engagement further require that the proportion of work being fulfilled by smaller firms will be “measured and reported annually”.

The deal, which covers “IT strategy and architecture” services, is due to come into effect on 1 July and run until 30 June 2024.

The contract-award notice said: “The scope for this procurement is to partner with HMRC's Chief Technology and Design Office team in the delivery of future projects and programmes as required on a per-project basis, to support the aim of becoming the business partner for new technology delivery. The procurement will include a broad range of project deliverables through statements of work across a number of skill areas.”

Over the course of the engagement, HMRC expects to issue CGI with periodic statements of work (SoW) for the fulfilment of various projects or objectives. Although the contract has “zero committed spend”, the terms list £42m as the “anticipated potential value” between now and June 2024.

“Each statement of work will be scoped, drafted and signed on an individual basis,” the contract added. “These… will have the flexibility to agree specific packages of work as fixed price, time and materials and additional commercial models deemed appropriate by both buyer and supplier.”


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CGI must provide a personnel rate card setting out maximum costs for each role it may be asked to provide during the deal’s lifespan. SMEs working through the outsourcer’s supply chain will also be expected to adhere to this pricing structure.

HMRC is currently in the process of delivering its Technology Sourcing Programme (TSP), which aims to manage the department’s exit from a handful of large technology contracts and revamp how – and with whom – an estimated £900m a year is spent on IT and services.

A number of major deals have already been awarded via TSP, including £300m across two contracts, won respectively by Capgemini and Accenture, while Cognizant was chosen to deliver a pair of contracts worth a cumulative £150m. IT reseller SCC recently secured an £85m contract to provide software and support for the IT platforms that underpin the UK’s post-Brexit customs system.

Deloitte, meanwhile, has been retained by HMRC since 2020 to provide consultancy support for the tech procurement transformation scheme. The professional services firm most recently signed a £15m one-year deal with the department that came into effect on 1 April.

In an exclusive Q&A earlier this year, HMRC chief digital and information officer Daljit Rehal told PublicTechnology that the rollout of TSP is progressing well.

“We’re on track with our plans to break up our largest IT contracts and award new ones, while protecting our live services, by June 2022,” he said. “So far, we’ve launched 26 competitive tenders, addressing over 85% of our IT spend, and awarded 22 contracts to 9 different suppliers. But our Technology Sourcing Programme is about much more than contracts. Between now and 2025, we will create the IT organisation we need for the future, helping ensure HMRC can meet its objectives and charter commitments. This includes making our services accessible and easy and quick to use, and protecting the customer information we hold.”

Based in Montreal and founded in 1976, CGI posted worldwide revenues of about £7.5bn in 2021.

The company provides IT and related services to a wide range of public-sector customers and, in the past year, has won multimillion-pound deals with the likes of the Ministry of Defence, the Ministry of Justice, the University of Nottingham, and the Department for Environment, Food and Rural Affairs.

 

About the author

Sam Trendall is editor of PublicTechnology. He can be reached on sam.trendall@dodsgroup.com.

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