The Department for Work and Pensions (DWP) has inked two major software extension deals with HP, covering a core benefits system and departmental application support, strengthening its dominant position with five major contracts in the department.
HP already provides desktop services on an interim basis to the department, after the DWP tore up a £300 million contract with Fujitsu only one year in, for undisclosed reasons. HP also runs hosting and integration for the DWP.
The move has already raised questions over the department's commitment to the government promise of broadening its supplier base, as suppliers that lost out on the work had gone through expensive bid processes.
In winning the core benefits system work, which is a major project, Accenture and Capgemini had been part of the original bid process, and for the overall applications support, Accenture and IBM took part, until the HP deals were extended.
The new deals are understood to be worth over £100 million a year in total.
The DWP insisted that by adding to the amount of work run by HP it will “reduce the amount of daily and monthly charges paid for the service we receive and will result in savings ", analyst house TechMarketView reported.
Georgina O’Toole, director at TechMarketView, said that the move “looks suspiciously like an admittance that, in times of austerity, large broad-ranging deals with one supplier can help to keep costs down”.
While the government had proposed moving to a wider range of suppliers, she said, “spreading the spoils ... looks like a good idea on paper but won't always get the best deal for departments in reality”.
Last week, the DWP awarded application development contracts to IBM and Capgemini.