MoD makes astonishing decision in handing payroll deal to failed NHS contractor CSC
The Ministry of Defence (MoD) has surprised everyone by awarding a contract for the delivery of payroll and personnel services to serving and veteran communities to CSC, an outsourcer which is currently shrouded in legal wrangles with the government over its £957 million failed NHS work.The decision has completely wrongfooted the analysts who were very confident that the contract, worth £100 million per year, would go to the current supplier HP, whose contract is due to expire in November 2012. Analysts were confident that HP's strong performance in delivering the contract so far would seal it the deal.
Analysts were particularly surprised because CSC is not a leading player in the subsector of defence, nor in the business process outsourcing contract type, rather its UK public sector business has been dominated by its involvement in the ill-fated NHS National programme for IT contract.
This astonishing decision also puts Chris Chants' resignation blog comments into perspective. Only last week he was railing against the government's inability to loosen the stranglehold of the major suppliers. http://bit.ly/HOxSKs This decision appoints not just a major supplier but a failed major supplier to the list of contractors who can still get a contract out of the government bureaucracy despite having failed completely in a previous contract.
Member of Parliament Richard Bacon, a senior member of the public accounts committee, has publicly criticised the MoD's decision in light of the NHS failure.