MPs will grill Cabinet Office over Fujitsu contract bidding pause

Three Parliamentary select committees will coordinate their inquiries into Fujitsu and its response to the Post Office Horizon scandal, with its relationship with the Cabinet Office to be examined.

The public accounts, treasury, and business and trade select committees are all examining Fujitsu’s promises, which include a pause on bidding for government contracts.

The pause has had little impact on Fujitsu’s appetite for government work, however, calling into question its purpose.

MPs will get to the bottom of Fujitsu’s response to the Post Office scandal, including criticisms over it “dodging” its own contract bidding pause.

Liam Byrne MP, chair of the business and trade select committee, said the three select committees were now focused on Fujitsu. “Between us, I think we can coordinate inquiries into the Cabinet Office and try and get to the bottom of whether civil servants are complicit in Fujitsu’s intention to dodge the rules,” he said.

Leaked comms and public statements have revealed that Fujitsu is working with the Cabinet Office on managing the sanction it placed on itself.

In a forum answer to a question from a member of staff about bidding for contracts through other suppliers, Dave Riley, head of public sector at Fujitsu UK, described a Cabinet Office “position” on the route. He wrote: “The current Cabinet Office position is, where we bid with a partner, it is up to the partner to decide if they are comfortable to work with [Fujitsu], so not currently subject of the gateway checks for us bidding.”

The supplier’s statement on its adherence to its self-imposed bidding pause also includes a Cabinet Office role. “Fujitsu continues to work very closely with the Cabinet Office to ensure that the guidelines that we have voluntarily put in place are being followed appropriately,” it said.

Fujitsu has regular meetings with the Cabinet Office.

Kevan Jones MP, who has campaigned for victims of the Horizon scandal for over a decade, said the Cabinet Office should not have been involved in shaping Fujitsu’s concession, and if it was, it should come clean.

Computer Weekly asked the Cabinet Office what role it played in creating and monitoring Fujitsu’s freeze on bidding for government contracts. The Cabinet Office said: “We welcome Fujitsu’s decision to pause bidding for work with new government customers until such time as the inquiry concludes.

“Ahead of that, and as with all contracts, we continue to keep Fujitsu’s conduct and commercial performance under review.”

Following the long-running Post Office scandal becoming mainstream news, Fujitsu was forced into making major concessions to Parliament, taxpayers and victims.

The supplier’s first concession was to announce the pause in bidding for government IT contracts.

Fujitsu wrote to the Cabinet Office with the promise to “pause bidding for new government customers ... until such time the inquiry has reported, or with prior consultation and support from such government customers”.

It added: “In support of government, where there are existing customer relationships or an agreed need for Fujitsu skills and capability, we will bid as appropriate in line with public procurement process.

“Where we are already actively engaged in a live procurement, we will sensitively assess our continued involvement whilst seeking not to disrupt ongoing procurement processes or disrupt essential government work.”

At first glance, this would appear significant. According to figures from Tussell, Fujitsu has active contracts with the UK government and public sector worth over £4bn. The biggest of these, worth nearly £2.4bn, is its deal to supply and support the Post Office’s Horizon system. This contract is being phased out with the Post Office’s ongoing project to replace the controversial system.

But when examined, the offer loses its headline-grabbing significance.

One source told Computer Weekly that few government departments could be classed as new customers as they have existing contracts with Fujitsu. “Extensions to contracts, opportunities where Fujitsu is already bidding, or where customers have invited it to bid, are fair game,” said the source.

Computer Weekly has also seen leaked Fujitsu internal comms that reveal the supplier is targeting £1.3bn in UK government business in the next 12 months and currently has a backlog of about £650m in contracts to fulfil.

The leaked documents also reveal that senior Fujitsu staff have played down the bidding pause, calling it “an extra gateway” rather than an outright ban. Staff were told they could bid for new contracts through partners if the partner was happy to do so, and were provided with a flow diagram advising them how to work around the self-imposed bidding freeze.

Other promises made by Fujitsu that MPs will examine are its contribution to the costs of the scandal, including financial redress for victims and its agreement to support the families of victims. This includes meeting a group set up by children of former subpostmasters, whose lives were impacted.

The Post Office scandal was first exposed by Computer Weekly in 2009, revealing the stories of seven subpostmasters and the problems they suffered due to the accounting software (see timeline of Computer Weekly articles about the scandal below).

• Also read: What you need to know about the Horizon scandal •

• Also watch: ITV’s documentary – Mr Bates vs The Post Office: The real story •