Big Four firm Deloitte was twice drafted in to examine troubled public sector IT supplier Electronic Data Systems’ finances over the last two years. This news was revealed when the Freedom of Information Act (FOI) forced Whitehall procurement body the Office of Government Commerce to release certain material.
The revelation comes as Texas-based EDS, the world’s second-largest computer services group, bid for one of the UK’s largest IT contracts – a £4bn overhaul of the Ministry of Defence’s computer systems. EDS is also being forced to sign a ‘failure clause’ for its pitch to be accepted. As a result it must hand back control of the MoD’s systems in the event of an IT meltdown.
The MoD contract is expected to be awarded within the next two months, while EDS is also down to the final two bidders for a massive outsourcing contract for the Metropolitan Police.
The government ordered a total of four inquiries into one of Whitehall’s biggest IT suppliers and consultancy firms. However, under the FOI, the reasons for the investigation, as well as the areas of EDS’s finances, which were examined, cannot be revealed unless specifically requested and then accepted by the OGC.
The two inquiries involving Deloitte were Ranger I and Ranger II, while a further two were carried out internally in 2004 by the OGC, an independent arm of the Treasury formed in April 2000 to set standards for government procurement and police suppliers.
An EDS spokesman described the reports as ‘standard’, and said the company’s competitors would have had similar investigations carried out. However, he refused to comment on any details of reports commissioned reports prior to the OGC’s inception.
The company has a poor record within government IT projects. It hit problems in 2002 and 2003 when the Revenue dumped EDS during a contract worth £3bn, for a series of errors over tax-credit payments.
In 2004, EDS was strongly criticised by a committee of MPs for its work with the Child Support Agency after a £456m IT system failed to pay thousands of single parents. They attacked ‘chronic, systemic failures’ of management across the agency
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