UK MoD pauses £92M Oracle Fusion contract amid project governance review

The UK's Ministry of Defence has delayed procurement of a £92 million contract to implement Oracle's Fusion cloud-based ERP system.

Last year, the majority of central government departments made contract awards worth hundreds of millions of pounds in a bid to modernize their ERP systems and move them to the cloud. However, the MoD has deferred the hunt for a service partner to implement Oracle Fusion while it reconsiders project governance.

In a procurement notice issued late last week, the MoD said the Corporate Services Modernisation (CSM) Portfolio was waiting for the business case for the transformation and implementation (T&I) phase and related contract to be signed off. The department is "currently going through governance which is not due to complete until the latter part of 2025," the notice said.

The procurement for the five-year contract is expected to go ahead in "early 2026." The MoD first began engaging with the market for the "Phase 3" stage in 2024.

"The [MoD] recognizes the need to have clear outputs to facilitate the T&I phase. This need was reinforced by the market during the market engagement in September 2024 where the clear message was that not having these clear outputs would mean that significant risk pricing would be built into any bids submitted and likely result in significant scope changes being required during the T&I phase. This would further put the delivery timelines at risk," the procurement notice said.

An earlier market engagement for Phase 2, design and implementation, specified that Oracle Cloud Fusion would be the "primary ERP technology." The MoD is already an Oracle user. This contract was awarded to KPMG in May 2025 for £8 million.

CSM is set to complete detailed "design, capability building and pre-implementation preparedness activity" for replacing finance, commercial, and HR services across civilian and military organizations.

The MoD's ERP upgrade and cloud migration is part of the Shared Services Strategy for Government [PDF], launched in 2021.

The major cross-government technology refresh sees central government departments brought together into clusters for procurement and implementation. The MoD is grouped with the armed forces and the armed forces pension scheme.

Other clusters have already named their main contractors. In September, IBM and Oracle won a £711 million ($967 million) competition to support the Synergy Programme, which will run the ERP project for the Department for Work and Pensions, the Ministry of Justice, the Department for the Environment, Food and Rural Affairs, and the Home Office.

In October, the "Matrix" cluster awarded SaaS vendor Workday and systems integrator Cognizant a £144 million ($196 million) deal for a group of government departments including Cabinet Office, the Treasury, the Department for Science, Innovation and Technology, Department for Energy, Security and Net Zero, Department for Culture, Media and Sport.

In November, SAP and Deloitte won contracts worth up to £366 million ($497 million) for the Unity cluster, which includes tax collector HMRC, Department for Transport, the Ministry of Housing, Communities and Local Government. ®