Capgemini wins contract to look after legacy HMRC Aspire tech

Updated The UK tax collector has extended its relationship with French IT service provider Capgemini in a £215m contract, which awards the outsourcer work to look after tech provided under the controversial 2004 Aspire contract at least eight years beyond the first proposed end date for the deal.

In a contract award notice published last week, Her Majesty's Revenue & Customs (HMRC) said it was extending the current arrangement, set to end in June 2022, for three to five years to "ensure the secure and continued support of the legacy applications whilst they are either decommissioned or undergo technical modernisation."

"HMRC has awarded a contract to Capgemini to provide business application, support and maintenance services for a set of business-critical legacy HMRC applications. Prior to this Capgemini was the incumbent service provider to HMRC for these services," the notice said.

The new contract, seemingly signed without external competition, is set to last three years, with two options to extend for a single year.

In 2016, HMRC set out to replace the Aspire IT contract through a procurement that was expected to interest smaller and medium-sized companies, as well as larger providers, in a transition said to be fraught with risk.

It is not the first time work on tech provided under the contract has been extended. In an announcement in 2019, Capgemini said it had won a deal to provide services for applications management services until June 2022.

"This extension builds on a successful 15-year partnership between the two organisations, which has been instrumental in the delivery of services that underpin the collection of UK tax revenues," the French firm said.

Between April 2006 and March 2014, Aspire accounted for about 84 percent of HMRC's total spending on technology. The Aspire contract has provided stable but expensive IT systems. The contract has contributed to HMRC's technology becoming out of date.

The French outsourcer has succeeded in securing other work hanging over from the mega-deal. In January, it won a £51m deal to continue supporting HMRC's Enterprise Tax Management Platform (ETMP) Enterprise Operations (EOPS) Run & Associated Change Services as a sole supplier under a single lot, a tender notice said.

A report from UK public spending watchdog the National Audit Office (NAO) said the Aspire contract had been due to end in 2017.

In a 2016 memorandum [PDF] for Parliament's Public Accounts Committee (PAC), the NAO said: "Between April 2006 and March 2014, Aspire accounted for about 84 percent of HMRC's total spending on technology. The Aspire contract has provided stable but expensive IT systems. The contract has contributed to HMRC's technology becoming out of date.

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"In January 2015, the [PAC] reported that the Aspire contract had provided stability but HMRC had not managed the costs of the contract well. The Committee was concerned about HMRC's progress in preparing to replace Aspire, which was due to end in June 2017."

The NAO said that in March 2015, HMRC was not planning to extend Aspire but replace it in phases. "HMRC believes a phased approach reduces technical and operational risk and gives it the continuity it needs to carry out its transformation plans, protect tax revenue and maintain customer service standards. The last phase of the replacement is now due to be completed in 2020," the report said.

With aspects of the mega-contract now potentially lasting until 2027, Whitehall IT watchers may be forgiven for thinking the arrangement is not providing value for money or much-needed modernization to underlying IT systems. The planned approach to replace Aspire, dubbed the Technology Sourcing Programme, also seems to be slipping.

The Register has contacted HMRC for comment. ®

Updated to add on March 30, 2022: HMRC has been in touch to say: "This is an award of a contract via the negotiated procedure without prior publication under Regulation 32 of the Public Contracts Regulations 2015.

"We have used a recognised public procurement route and the approach was part of the Cabinet Office approved programme strategy.

"The Aspire contract will end on 30 June 2022. This is not a continuation of the Aspire contract."