Supreme Court Decision: NS&I Can Give Atos £130M Contract Without Specific Competition

A case at the UK’s Supreme Court this month confirmed the award of a £130 million revenue contract, awarded without a new public competition, to giant French firm Atos. We have reported on the case with more legal detail on our Public Spend Matters Europe (PSME) site; but in summary, it came about when the UK government introduced a new scheme for providing parents with tax-free childcare. It was decided that the government owned NS&I (National Savings and Investments) organisation would deliver the new scheme of tax-free childcare (TFC) by providing and administering childcare accounts and supporting services.

Now all of the NS&I operational services were already run on an outsourced service basis by Atos, who won the contract to provide those services, so NS&I proposed to amend its contract with Atos to include the new TFC administrative work. That would all happen without any new public procurement process, which NS&I said was acceptable because the original competition that Atos won included the provision for new work to come into scope during the contract period.

But an incumbent supplier who provided childcare vouchers under the previous scheme challenged and said there should have been a new competition. After going through several courts, with Edenred (the challenger) losing at each stage, the Supreme Court finally confirmed that and decided otherwise.

Never mind the legal element though, just fill us in here - how exactly does giving Atos £130 million worth of additional revenue, without a competitive process for the specific work, fit with the government’s wider "policy through procurement" objectives?

  • Atos are huge, about as far away from being a small supplier (SME) as you can imagine.
  • Atos walked away from the DWP disability examinations contract, after some well publicised issues.
  • Atos are based in France, their entire Management Committee are French, and the firm is quoted on the French stock market.
  • Hundreds of jobs have been offshored to India, reducing UK employment.

Now we are being deliberately provoking here, and we are actually no great fans of supporting "local suppliers". We even have doubts about the whole SME imperative. But the government could have chosen a different way of sourcing the requirement, one that might have been more supportive to smaller, local, British firms. But no, the contract was handed over, without competition, to Atos.

We have reported on the legal issues in more detail on our European site, and genuine congratulations are due to the NS&I procurement team for the way the contract was originally let and structured. That enabled the contract to be given to Atos without the need for further competition, according to the courts, and reading the judgement, you can see why that decision was made.

But it does seem a little paradoxical perhaps when we see a process like this, which goes against so many of the stated objectives behind UK public procurement. When it comes down to it, pragmatism wins the day, particularly if the Treasury has anything to do with it!

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First Voice

  1. Dan:

    You’re forgetting about the ‘through’ spend that Atos spend with their supply chain, conveniently counted when publishing the SME figures

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