DWP Swaps Strike-Hit HP For Strike-Hit Fujitsu

The Department for Work and Pensions (DWP), which has been hit by strikes over redundancies, has signed a massive desktop services deal with Fujitsu, which itself has been hit by strike action over pensions.

In a statement released this week, DWP IT director general and chief information officer John Harley said that the department had awarded its desktop services contract to Fujitsu with the new contract due to start on 1 September 2010. The exact worth of the deal has not been disclosed but some reports have placed it in the region of £1 billion.

Although DWP has already used Fujitsu for some IT services, this latest agreement sees the computer services specialist oust HP from one of the largest IT contracts in the UK. The deal involves around 140,000 desktops and, according to Fujitsu, is the single biggest desktop and thin client outsourcing deal in the UK.

The latest agreement with Fujitsu is part on an ongoing plan to make tendering for DWP IT contracts more competitive. “The DWP Desktop Services competition is part of the Department’s contracting strategy announced on 1 July 2008, which will see all of its IT Services competed for by 2015,” the department said in a statement. “Along with the Application Deployment services competition launched last year, this means that about 50 percent of DWP’s IT has been opened to competition.”

Commenting on the deal, Eithne Wallis, managing director of the UK Government Division, Fujitsu UK and Ireland, said the decision to award this contract to Fujitsu reflects the company’s track record of providing services to other government departments and including the Flex framework. “This, coupled with the decision last year to integrate the IT hardware supplier Fujitsu Siemens Computers into the company, means we have established ourselves as the major force in desktop provision in the UK.”

Fujitsu’s Flex framework is a seven-year agreement made in 2007 – developed in conjunction with the Cabinet Office – to provide shared services to government departments.

But in an ironic twist for a department that is concerned with managing UK employment and pension provision, the DWP has been hit by strike action recently from HP staff outsourced to the government by the IT provider. On 22 January, More than 1,000 HP employees at the DWP went on strike on 22 January, after negotiations over pay and job losses collapsed. Workers – members of the union Unite – set up picket lines in Newcastle, Washington, Preston and the Fylde Coast.

It is not clear what part this HP strike action may have played in the decision to award the desktop support contract to Fujitsu but the Japanese company has also been hit by strike action.

Fujitsu has been embroiled in a long-running dispute with its staff over changes to pensions. At the end of January, Fujitsu staff – also members of Unite – announced plans to extend their strike action for five more days over planned cuts to jobs and pension schemes. Union Unite is also representing Fujitsu employees in the House of Commons, after the company announced plans to cut 70 staff by the end of January and closed the final salary pension scheme – effectively cutting members’ salaries by 20 percent.

DWP’s use of thin-client technology is part of a commitment to more efficient technology spelled out by the organisation last year at the Green IT conference in London. DWP director of supplier relationship and performance management, Frank Tudor, said that green and energy efficient approaches to IT should be integrated into any IT contract – rather than being an added extra.

“I am absolutely passionate that green IT is part of the core service offerings for all the IT industry,” he said. “I somewhat get obsessed when service providers turn around to me and say: ‘Thanks for spending hundreds of millions of pounds with us each year – now we want to sell you a service to tell you what the carbon footprint of that is’.”