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“Botched government procurement” leads to £24 million Atos settlement

Labour has accused the Conservative government of using taxpayers’ money to pay for their own mistakes

The UK government has paid a £24 million settlement to Atos after it awarded a Met Office supercomputing contract to Microsoft.

Microsoft was awarded an £850 million contract in April 2021 with the Met Office to build a supercomputer for the purposes of protecting public infrastructure from severe weather events.

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The French IT multinational alleged a month later that the government had breached its obligations under public procurement regulations, the Financial Times reported.

The contract reportedly contained requirements to provide a main supercomputer system as well as two test supercomputers and a development supercomputer. All the systems needed to be “architecturally equivalent”.

Atos alleged in its lawsuit that the government had rejected its proposal as it used different processors in the development supercomputer compared to the main supercomputer system. 

“Met Office has chosen a final tender which scored lower in quality, transferred more commercial risk to the Met Office and is more expensive,” said the French company.

An Atos spokesperson told IT Pro: “We were pleased to have resolved this matter.

Full details of the settlement remain unclear, as do the reasons why the government decided to settle despite the contract stipulating all systems needed to be "architecturally equivalent".

Denying Atos' allegations, both the Met Office and the Department for Business, Energy and Industrial Strategy (BEIS) said proposed a non-compliant solution that was "not the most economically advantageous".

“The proceedings regarding supercomputer procurement have been resolved with no admission of liability from any party. This settlement is in the best interest of taxpayers,” the Met Office said in a statement to IT Pro.

“An independent review has assured that all procurement processes were followed and there were no failures associated with governance or lack of controls. We will take forward such lessons identified as are applicable to the Met Office."

The settlement with Atos, the only other bidder for the contract, was revealed in the BEIS 2021-2022 annual report, published on 20 October 2022. 

“The Core Department and Met Office entered into a settlement agreement with Atos IT Services UK Ltd for joint payment of £24.0 million to Atos, without admission of liability, in relation to a procurement exercise undertaken by the Met Office, an executive agency (trading fund) of the Department,” it said.

The BEIS contributed £20.7 million to the settlement while the Met Office paid £3.3 million, according to the report.

IT Pro has contacted the BEIS for comment.

“Botched government procurement has left the British people picking up the tab,” said Angela Rayner, Labour’s deputy leader, via Twitter. “While families count every penny, the Tories are shelling out taxpayers’ cash to pay for their own mistakes.”

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