DWP reviews £4.5bn IT deals

The Department for Work and Pensions (DWP) is looking for suppliers for up to £4.5bn-worth of technology deals to run from 2010 to 2015.

The replacement of desktop and datacentre management contracts, which are currently held by EDS and BT and will expire in 2010, will be worth about £3bn. But the design and deployment of future applications may be worth up to £1.5bn, and the DWP is following the trend set by the Home Office's identity card programme with plans to sign up a small number of companies to a framework contract of standard terms and conditions, so that new developments can be put together more quickly than the traditional European procurement regulations enable.

"I envisage in the future two or three consortia within a framework agreement for new application development so that when a need emerges we can have a competition between a limited number of organisations," Stephen Timms, the Minister for welfare reform, said.

The DWP's technology strategy, which is one of the government's largest and most complex, is about to face a considerable test – against a backdrop of repeated failures in government IT.

The Employment Support Allowance, which is to replace the Incapacity Benefit, will go live at the end of October – and with it the £295m technology programme to run it.

"This is the flagship project in the department at the moment and I am confident that it will be a good example of the successful and effective management of risk on big IT projects," Mr Timms said.