Ministry of Justice 'fixes' Atos billing system 8 years into £500m deal

The Ministry of Justice (MoJ) does not know what services were delivered and paid for within its £500 million IT contract with Atos, ComputerworldUK can exclusively reveal.


The Ministry of Justice (MoJ) does not know what services were delivered and paid for within its £500 million IT contract with Atos, ComputerworldUK can exclusively reveal.

Following Serco and G4S’ electronic tagging scandal, the MoJ dodged another overcharging fiasco at the close of last year, ComputerworldUK has found. Eight years into the contract and five months after the irregularities were discovered, work to resolve invoicing and pricing mechanism issues is “ongoing”, the MoJ said.

The MoJ Contract Management Review Findings and Recommendations Report December 2013 by Barclays and MoJ’s non-executive director Tim Breedon found invoicing and payment problems gave "rise to the risk of material errors or irregularities in charging, or a significant operational failure” in Atos' IT contract. 

The review found that the MoJ authorised invoices based on Atos’ own service delivery data and that, “in some instances, MoJ has minimal visibility of what is being delivered and what is being paid for”. The ministry refused to comment on exactly how much of the contract suffered from visibility issues.

ComputerworldUK understands that the IT infrastructure services that were subject to payment queries consist of desktop, service desk, networks printing, hosting/data centre, applications and security services as part of the DISC (Development, Innovation and Support Contract), which covers all aspects of the Ministry of Justice and the court system. The 10-year long DISC contract cost the MoJ £47.2 million last year.

The MoJ insisted that: "There is absolutely no evidence of overcharging or misreporting of information regarding the Atos contract to provide IT services to the courts.

"The report merely identified areas where the MoJ could further improve the management of the contract. These are being taken forward to ensure the taxpayer continues to receive value for money." 

Atos has said that it supports transparency in its contracts, and that it is working with the government to enable this.

Contract problems were not confined to IT, the report revealed. Visibility problems and authorisation of invoices based on suppliers' own service delivery data occured in seven of the 15 most expensive MoJ contracts last year.

Open book accounting

Following the electronic tagging and court facilities scandal in which the MoJ paid for services for phantom prisoners, G4S and Serco refunded the department £108.9 million plus tax and £68.5 million, respectively, to settle. But a forensic audit by PricewaterhouseCoopers for the National Audit Office revealed that the government does not have its own independent data to prove where they have been overcharged. The potential overcharge “may amount to tens of millions of pounds” according to the audit report.

The MoJ told ComputerworldUK that “the infrastructure services contract incorporates open book accounting principles”. 

Open book accounting is an arrangement whereby costing information is shared transparently between client and contractor. Although many large contracts across government are "open-book", many departments do not use open-book clauses to request information from the supplier.

In evidence to the Public Accounts Committee (PAC) in November, chief procurement officer Bill Crothers said: "In a recent sample of large contracts, about a third were open book, although most of the open-book clauses were not used. What we have is a right, but for some reason, the departments were not enacting the open-book clauses."

Lack of understanding 

Breedon’s review found that in Atos’ case, alongside G4S and Serco’s contracts, “it is apparent that some contract management staff lack understanding of the complete invoice process”. 

However, the MoJ would not confirm whether it was the same staff who handled contract management across the department. 

Since the review, the MoJ has been implementing all six of Breedon's recommendations to avoid invoicing and price mechanism problems. But it told ComputerworldUK that it was an “ongoing” process that will “take time” and cannot “happen over a few days”. They could not disclose when this process would conclude.

The recommendations were designed to enable the MoJ to either verify data independently or to put into place systems that allow the ministry to trust self-certified invoices from suppliers.

For example, it suggested the MoJ collect its own cost and delivery data so that it can independently verify invoices, and that it should ensure that payment is linked to actual delivery of service by checking against payment data.

It also suggested that the MoJ develop independent assurance and contract compliance plans for all contract. This would include audits of invoiced amounts of payments.

Meanwhile, where the MoJ accepts self-certified invoices from suppliers, the report recommended the MoJ ensure that the systems and processes in place to produce the invoices are audited.

The report suggested that these recommendations are incorporated during the contract creation, and monitored throughout.

“For all contracts, it is recommended that an exercise is conducted to identify the key risks that threaten invoice accuracy and validity; this may build on the existing key assessment processes,” the report said.

Atos response

A spokesperson from Atos told ComputerworldUK: "We support transparency and the principle of open book where it is applied consistently across suppliers and government contract. 

“We have provided it where asked by our clients in the past – the NAO have reviewed this when they looked at private providers in government last year. We support more transparency going forwards and we are working with government to look at options." 

The MoJ paid three different providers for ICT contracts last year, ComputerworldUK understands. CGI provides services under the DISCs contract owned by Atos, which also include the crown prosecution services’ case management systems. Steria received £69.5 million for the probation services contract and HP received £88.1 million for hosting the payroll and HR services. 

The UK Supreme Court did not renew its part of the service agreement under the DISCs contract last year and opted for an in-house system from the Government's G-Cloud store in January. It told ComputerworldUK that this decision was for efficiency and cost-saving reasons.

The government confirmed, in April, that it will now accept bids from G4S, having barred the company from bidding for public sector work in July last year after the fraud investigation and settlement. 

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