Capita wins uncontested extension to mega millions Northern Ireland Education contract

Northern Ireland's Education Authority has awarded UK tech outsourcer Capita a managed services contract extension worth £33 million ($41.8 million) without external competition.

The award takes the total value of the IT agreement, which began in 2012, to £546 million ($692 million) or about a fifth of the Authority's annual budget.

In a contract modification notice, the Education Authority argued the extension was necessary to "facilitate the continuation of the existing managed service arrangements, functionality changes to effectively meet schools' requirements and permit transition to a new contract." It will provide an additional year of Capita's services until March 31 2025.

The add-on was awarded in a negotiated procedure without a prior call for competition because services "can be provided only by a particular economic operator" in order to protect "exclusive rights, including intellectual property rights."

The Education Authority first awarded the deal to Capita in 2012, under a £350 million ($444 million) deal expected to last for five years. In 2017, it was extended by two years until 2019, then it was extended by three years until 2022, and then for another two years. The Education Authority argues that because the total value of extensions is less than half the original contract, it is allowed within procurement law.

Capita provides a range of computer services to the Education Authority and more than a thousand schools. The deal includes ongoing management, operation and maintenance services, as well as information technology consultancy services and the supply of computer hardware, software and associated products.

"The systems and services provided via the current contract have been uniquely configured to reflect the varying requirements of the Education Authority," the notice said.

The extension of such a large contract to more than 12 years draws into question the Authority's ability to create competition among technology suppliers.

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In a notice published on December 22, the Authority awarded Fujitsu a £485 million ($615 million) project to provide services, including a school management system for nursery, primary, secondary, and other education settings. The Register revealed only the Japanese technology firm made a formal bid for the contract at the final stage of the competition.

Northern Ireland Libraries (Fujitsu, £27 million / $33 million) and the Finance Department (BT, £26 million / $33 million) are among the other public authorities in the province awarding contracts to the incumbent supplier or without competition. ®

PS: We explained why vendors keep winning deals like this here and here, for what it's worth.