Fujitsu won Foreign Office contract despite concerns

Fujitsu won a £184m government contract in 2021 despite concerns from officials that the system it was offering was likely to be "unfit for purpose".

The Japanese-owned firm is at the heart of the long-running Post Office IT scandal.

Court documents reveal the Foreign Office had originally wanted to rehire Vodafone for the contract to supply communications equipment.

But it re-ran its procurement following a legal challenge from Fujitsu.

Last autumn the most senior civil servant in the department told MPs scrutinising government spending that the programme to replace its communications system would also be 12 months late being delivered.

A government spokesperson said, as with all contracts, it continued to keep Fujitsu's conduct and commercial performance under review.

Fujitsu declined to comment.

• Minister wants to avoid outsourcing AI to tech firms

• Post Office paid Fujitsu £95m to extend Horizon

• Fujitsu should pay compensation, says postmaster

Fujitsu was one of three companies bidding for a Foreign, Commonwealth and Development Office (FCDO) contract in 2021 to replace a system of secure electronic communications connecting civil servants and diplomats across 532 sites in more than 170 countries.

Officials had abandoned an earlier procurement process in 2018 following a challenge from Fujitsu.

When Vodafone contested the FCDO's decision in the courts it emerged that Fujitsu's winning 2021 bid had been evaluated as having "significant deficiencies resulting in a technical solution that is likely to be unfit for purpose, and requiring workarounds".

It was nevertheless the highest scoring bid.

Vodafone was ultimately unsuccessful in its attempt to overturn the FCDO's decision.

'Under review'

Last October the most senior civil servant in the department wrote to the chair of the Public Accounts Committee, which scrutinises government spending, to warn the replacement of the communications system was forecast to be 12 months late in being delivered.

MPs from across the House of Commons have questioned why Fujitsu has continued to win government contracts despite a High Court judge ruling in 2019 that its Horizon system serving the Post Office contained "bugs, errors and defects".

A government spokesperson said: "It is right that we do not pre-empt the conclusions of the ongoing, formal inquiry, but once the full facts are established we will consider all options to hold those responsible for this scandal to account - legally and financially.

"Ahead of that, and as with all contracts, we continue to keep Fujitsu's conduct and commercial performance under review."

They added that Fujitsu's system has undergone extensive testing to ensure it is "fit for purpose" before its deployment to the FCDO's global sites.

Digital procurement expert Mike Bracken said governments often signed contracts with suppliers on the basis that any problems would be ironed out once work begins.

"In a world of rapid technology change and changing customer demand, [this] is not very wise," he told the BBC.

"It leads to government holding many legacy contracts which are not fit for purpose but are contractually and operationally difficult to move away from."

Mr Bracken, who led the Government Digital Service before setting up consultancy Public Digital, said governments would be better off "starting small" with pilot projects and having shorter contracts.

But he added: "They often prefer to offer one big contract and hope that issues can be worked on as they arise, despite minimal evidence that this ever works."

New procurement rules aimed at strengthening the accountability of suppliers and the government's power to challenge and remove them come into force later this year.