The House of Commons Public Accounts Committee said the decision to award the firm an extension to its NIRS2 contract – said to be worth between £70m and £144m – without launching a tender competition has put Accenture in a commanding position.
The extension – worth more than the original deal – was needed because the original deadlines were too tight for data transfer and legislative changes.The all-party group said that Accenture, formerly known as Andersen Consulting, appeared to be earning ‘excessive profits’ thanks to the deal.
The PAC said: ‘Accenture have outperformed their target productivity levels by a wide margin. On the basis of experience so far, the prices agreed appear to be very generous for a non-competitive contract, where, in practice, the Inland Revenue had little option but to use Accenture because of the high break costs of the original contract.
‘The Inland Revenue face a fresh challenge in 2004, when their contracts with Accenture and with EDS (their strategic supplier of other information technology systems) come up for renewal.’
The committee’s chairman – former Tory minister Edward Leigh – said: ‘The huge costs of getting out of the original deal effectively tied the Inland Revenue’s hands into having to give Accenture a large extra contract.’
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