The naming of the country’s new prime minister David Cameron and Chancellor George Osborne has pushed government outsourcing contracts in limbo as companies anticipate the stance the new government will enforce, following the UK elections and subsequently. When the news broke out that the new UK government would be splitting large outsourcing orders into a smaller deals in order to cut government spending by as much as 9 billion this year, it was Indian company Tata Consultancy Services who suffered negative feedback as its stock fell as much 2.6 percent. For the Nest Scheme, the TCS currently has a £600 million contract with the Personal Accounts Delivery Authority for the NEST scheme administration services. The NEST deal had already seen its fair share of the controversy before when fellow bidders of the deal such as Logica suddenly withdrew form the bidding, leaving TCS as sole bidder.
The contract has been singled out by George Osborne as the last mega deal to be signed under the former Labor administration. To cap all future Information Technology contracts at £100 million so this £600 million deal falls way outside the comfort zone. With a sword of Damocles above, it is not however just the NEST deal that sits. The contracts such as the 12.7 billion National Health Services Information Technology program which has already been trading on the thin ice these past few months as it has been plagued with numerous delays, it is also under the government’s eye. The other contracts named are a 13 billion defense program, 420 million school building contracts and a 1.2 billion E-borders immigration service project being delivered by the Trusted Borders consortium led by Raytheon and it includes company’s Accenture, Detica, Serco, QinetiQ, Steria, Capgemini and DAON.
From the state owned departments at this point, it becomes difficult to believe tat just a little over a year ago. The companies such as TCS, Infosys and Wipro had been angling for UK outsourcing deals worth about 3 billion dollars from state owned departments. As the UK strives to reach its target of reduced government spending, multi-million dollar government contracts in the UK that will be a things of the past. Although there might be more contracts to expect from the government as struggles to reform Information Technology are ongoing payouts that will be less and it may likely go to smaller outsourcing companies in an effort to drive down cost.
REFERENCE:
http://www.blog.infinit-o.com/uk-government-outsourcing-contracts-fear-sword-damocles-overhead/
