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Sinking Fujitsu axed from UK flood warning system

by on05 April 2024

Post office scandal has knock-on effects

The Department for Environment, Food and Rural Affairs (Defra) has given Fujitsu the old heave-ho from providing a flood warning system to the UK, just two months after signing an extension of up to 12 months.

According to Computer Weekly  the move comes as Fujitsu finds itself under the microscope in the UK due to its role in the Post Office Horizon scandal and ends a decade-long relationship with the Environment Agency.

In December, Fujitsu was handed an extension to the €20.5 million contract, which kicked off in 2015, for up to 12 months while a long-term supplier was chosen, with Fujitsu among the shortlisted bidders. The Environment Agency - the part of Defra responsible for flood alerts - has now appointed Leidos Innovations UK to run the service as part of a six-year deal worth about €28.08 million.

Fujitsu's loss of the contract comes hot on the heels of the Post Office Horizon scandal hitting the national media headlines. When the extension was signed at the tail end of last year, Fujitsu's role in the scandal was being probed as part of the public inquiry, but the TV drama Mr Bates vs the Post Office had not yet been broadcast. The nationwide uproar that followed the series led to the Environment Agency facing a grilling about its choice of supplier.

The Leidos deal includes the delivery of software packages and information systems, communication software, telephone and data transmission services, IT services and systems, and technical consultancy services. The tender award notice said the system has remained largely unchanged for the donkey's years.

“This is a complex technology estate that includes telemetry systems, forecasting systems, and services, all of which feed into messages issued from the flood warning system,” it said.

Although Fujitsu announced a pause in bidding for government contracts as a concession amid the furore over the Post Office scandal after the TV drama, this does not include work with existing customers. Fujitsu threw its hat in the ring for the new contract, along with Accenture and IBM, which lost out.

Fujitsu’s reputation has taken a massive hit since the broadcast of ITV’s drama about the Post Office, which told the stories of subpostmasters who became victims of the scandal triggered by Fujitsu’s error-prone Horizon software. The Japanese supplier’s UK operation is under intense scrutiny, and there is pressure on it to cease bidding for all government contracts. It has already agreed to cough up the enormous compensation costs, estimated to be well over €1.17 billion, and announced it would pause bidding for government contracts until after the current statutory public inquiry.

However, it is yet to agree on how much it will pay, and its self-imposed pause on bidding for government contracts has done little to quench its thirst for UK public sector work. Leaked Fujitsu internal communications reveal that the supplier is targeting €1.52 billion in UK government business in the next 12 months and has a backlog of about €760.5 million in contracts to fulfill.

Further internal communications revealed that Fujitsu is splashing cash to manage the current scandal fallout. It has sought external support in a project known as Holly, which has engaged PR, ethical business experts and lawyers for  €31.59 million.

According to procurement expert Tussell, Fujitsu has only won one government contract in 2024, down from six at the same point last year.


Last modified on 05 April 2024
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