5 The New IT Contract
26. The Agency is a significant user of IT systems.
Its vehicle database holds records on almost 31 million vehicles
and its driver database holds records on almost 40 million individuals.[64]
It also supports a network of 40 local offices across Great Britain.[65]
During 2002-03, as a result of a major re-tendering exercise,
the Agency ended its 10-year relationship with EDS Ltd and struck
a new deal with IBM/Fujitsu for all its IT/IS requirements and
development.[66]
27. The Agency took the opportunity of the end of
its contract with EDS to re-appraise its IT requirements. It sought
to extend the boundaries of a straightforward IS/IT provision
contract to one that offered greater flexibility to deal with
the Agency's agenda for change, particularly in electronic service
delivery and the business process changes that would be needed
to support it. In changing the basis of the contract, the Agency
knew that it would incur additional costs and in its business
case had estimated these to range between £13 million (if
the provider did not change) to £29 million (if a new provider
was selected).[67] The
Agency also told us that it had anticipated having to pay EDS
Ltd to provide much of the 'skills transfer' to any new supplier.[68]
28. A new contract with the successful bidder, IBM/Fujitsu
became effective in October 2002. Between the date of signing
this contract and the transition stage, additional costs of £4
million were identified.[69]
This charge was to novate some software licenses, as the original
EDS contract did not allow these to pass to a third party and
so new contracts with the software suppliers were required. This
arose because the contract signed with EDS in 1993 did not include
the full transparency of their contracts with software suppliers
and therefore the Agency had been unaware of the terms that EDS
had agreed with external parties.[70]
The new contract with IBM/Fujitsu includes revised contract termination
clauses to prevent any recurrence.[71]
29. The Agency has done well to successfully transfer
its IT supplier onto the new 'partnership' arrangement. The additional
costs involved in the transfer had not materially affected the
robustness of the Agency's overall business case to change to
a new supplier.[72]
64 DVLA Annual Report 2002-03, p10 Back
65
C&AG's Report, para 11 Back
66
DVLA Annual Accounts 2002-03, Note 5, p32 Back
67
Qq 81, 138-139 Back
68
Qq 82, 140-143 Back
69
Qq 131-133; DVLA Annual Accounts 2002-03, Note 5, p32 Back
70
Qq 134-138, 147 Back
71
Q 155 Back
72
Qq 152-154 Back
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