Capgemini to keep the legacy lights on at HMRC for £245.5M

The UK's tax collector has awarded tech consultancy and service provider Capgemini a contract worth up to £245.5 million to keep legacy systems up and running.

The award brings the French outsourcer's potential windfall from His Majesty's Revenue and Customs (HMRC) to nearly half a billion pounds in the last two and a half years, and extends a sometimes controversial relationship in place for 20 years.

HMRC has one of the largest and most complex IT estates in Europe with over 600 systems, 800 terabytes of data, 1,000 IT changes a month, and a 24/7 IT operation. It serves 45 million citizens and more than 5 million business taxpayers.

Tender documents reveal Capgemini has won work under Lot 3 of the Digital & Legacy Application Services framework.

The contract is designed to help address the management of new or existing custom applications and middleware, including APIs, API platforms, and enterprise service buses.

This latest agreement adds to a string of HMRC contract wins for Capgemini. They include a £51 million arrangement inked in January 2022 to support HMRC's Enterprise Tax Management Platform (ETMP) Enterprise Operations (EOPS) Run & Associated Change Services as a sole supplier under a single lot.

In March 2022, HMRC extended a Capgemini deal in a £215 million contract, which awarded 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 it. The contract will have a duration of three to five years.

Capgemini began work to build and support the systems under the controversial £10 billion Aspire contract, a joint venture between with Fujitsu and HMRC first signed in 2004. According to a 2016 report from government spending watchdog the National Audit Office, HMRC initially planned to extend deals related to Aspire - which was supposed to end in 2017 - only until 2020.

At the time of the further deals, a spokesperson from HMRC said neither of the more recent contracts was a continuation of the Aspire deal, which was said to end on June 30, 2022.

The latest agreement comes under the DALAS framework, an arrangement with tech suppliers worth up to £4.5 billion in total. The consultation began for the deal in August 2022.

In September 2023, the government named Accenture, Capgemini, and IBM among the winners of Phase 1 of DALAS.

In April, the final slots on DALAS were offered to Accenture, Atos, Capgemini, CGI It, Cognizant Deloitte, and others under contracts collectively worth up to £2.8 billion. Since then, other awards made under the framework include contracts going to Netcompany (£75.3 million), IBM (£75.3 million), and Accenture (£151 million).

In these times of slowing growth in the private sector, it is great to see British taxpayers topping up the funds for tech providers in the public sector. Just great. ®

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