Ministry of Defence criticised over EDS contract

Last week, a consortium led by EDS won the contract for the second phase of the ATLAS project, the Ministry of Defence's information infrastructure, and at £4bn one of the largest public sector projects in the UK. At least one of the trade unions involved is not very happy about it and this week complained.

According to the Public and Commercial Services Union (PCS), the win has shown that the Ministry of Defence (MoD) is prepared "to reward failure". The union is angered that despite what PCS believes are obvious issues in phase one, the MoD is allowing EDS to retain the contract.

The phased contract is part of the MoD's defence information infrastructure (DII) project that is intended to modernise its IT from desktop computers through to battlefield infrastructure.

"Despite rocketing costs, continual problems and a failure by ATLAS to deliver all the agreed services under the first part of the contract, the MoD still awarded the contract to ATLAS," the union said in a statement.

The union went on to say that it has "major concerns" about the contract and is writing to the Defence Select Committee and the Public Accounts Committee, calling for an investigation.

Mark Serwotka, PCS general secretary, said: "It is astounding that the MoD is prepared to reward failure by handing over billions more pounds of taxpayers' money to a consortium that has failed to deliver what it said it would. You have to question how the taxpayer and the Armed Forces know whether they are getting value for money when the MoD refuse to allow an in-house bid on this contract and other contracts such as defence training. We have major concerns about the contract and will be writing to the Defence Select Committee and Public Accounts Committee asking them to investigate the DII contract."

As a result of its contract win, EDS has raised its estimate of what it will earn from ATLAS to $1.27bn over the next eight years. While the ATLAS consortium is led by EDS, the other main partner is Fujitsu Services and sub-contractors include General Dynamics, EADS Defence and Security Systems and LogicaCMG. HP and IBM are also partners in other areas of ATLAS.

The second phase deployment includes around 44,000 additional "user access devices" (PCs) and 58,000 "user accounts", EDS said.