Costs mount for Customs outsourcing

E-business plans have pushed up the cost of an IT outsourcing contract signed by HM Customs and Excise ((HMCE) by almost one-third, taking the value of the deal, with Fujitsu Services, to nearly £1bn.

HMCE blamed the increase on a vital part of its e-business programme.

A spokesman told vnunet.com that the additional costs would cover the building of electronic payment systems as well as web-based case tracking systems.

"When the initial contract was signed, contract change controls were put in place. Once the e-programme was developed, we were able to revise the contract to meet our needs," he said.

The initial 10-year IT infrastructure programme was signed with Fujitsu Services (then ICL) in 1999.

At the time, the deal was worth £680m. The subsequent changes take the value of the contract to £929m.

HMCE did not draw up its e-business plan until June 2001. This programme introduced such radical changes that it fell outside the remit of the original deal. HMCE denied that the changes could have been incorporated into the original deal.