Firms await verdict on £2bn ID cards project

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The Independent Online

The technology industry will next week learn who the Government has awarded contracts to supply the £2bn biometric identity card programme, the last and among the most secretive of the recent crop of major public-sector IT schemes.

The framework deals under the hammer do not guarantee a role in the ID programme, but only those companies that win a place on the list will be eligible to compete for the lucrative work.

According to insiders, best and final offers have been submitted by the shortlist of Fujitsu, IBM, Computer Sciences Corporation (CSC), Thales and EDS. A decision is expected next Monday.

The programme has been politically and technologically controversial from the start, and the procurement process has not been smooth either. Of the eight companies shortlisted last October, three – Accenture, BAE Systems and Steria – have dropped out. Should the Identity and Passport Service (IPS) team stick to the original plan for a group of five major suppliers, it is in danger of undermining the credibility of the programme by letting through all the companies still in the race.

Insiders tip CSC as the most likely loser. The company took more than £2bn-worth of NHS IT contracts from Accenture in 2006, giving it responsibility for three out of the five geographical regions of the world's largest healthcare technology programme. According to sources, CSC's first main subcontractor, Siemens, dropped out six months ago, and Unisys, which took over from Siemens, stepped down last month.

"It is obvious that CSC is the weak figure," said a source close to the negotiations. "They are noticeably three steps behind everyone else and the whole dialogue process and every contractor they have brought with them to the party has abandoned them."

There is also speculation about the effect of HP's takeover of EDS, announced last week, and the possible impact on competing suppliers if the merger distracts attention from the next phase of procurements, which are expected to start later this year with replacement fingerprint systems and the enrolment application.

Although the first cards will be issued to foreign nationals this year and British citizens in 2009, the future of the scheme is not guaranteed. In February last year, the Conservative Party sent a warning letter to all major contractors saying a Tory government would cancel the scheme, and pointing to the long-standing convention that one parliament's decisions cannot bind a subsequent one – a strategy likely to have pushed up the price of the contracts as the suppliers built the extra risk into their costing.

The design of the scheme has also changed considerably since its original conception, prompting speculation that it is being quietly watered down because of unpopularity with the Prime Minister and the Treasury.

The plan for identity cards is now part of wider, international requirements for biometric passports and will use the existing Citizen Information System database run by the Department for Work and Pensions as the basis for a central identity register.