UK taxman discovers low code doesn't mean low cost with £657M awards

The UK tax authority, HM Revenue & Customs (HMRC), has awarded three contracts totaling up to £657 million for low-code software development and support, challenging the assumption that empowering users with tech skills would automatically lead to reduced costs. Atos, a French consultancy and outsourcing firm, secured a £78.2 million contract as part of Lot 3 of HMRC's low-code procurement, awarded through Lot 4a of the Digital and Legacy Application Services (DALAS) framework.

This contract includes programme oversight, supplier management, governance, assurance, and delivery support for HMRC's low-code technology estate. The DALAS framework, which encompasses low-code technologies such as Pega, ServiceNow, Microsoft Dynamics, and Power Platform, had an initial estimated value of £700 million but was later valued at £2.8 billion for the second phase, comprising Lots 1, 4a, and 4b.

Cognizant and Coforge, two Indian tech services companies, also won contracts under the DALAS Lot 4a, with Cognizant's contract valued at £360 million and Coforge's at £219 million. Both contracts share the same initial term and extension options as Atos' deal. HMRC's IT estate is notoriously complex and legacy systems have proven to be a persistent issue, with the National Audit Office stating that remediation is taking longer than anticipated and costing more.

Despite these challenges, HMRC aims to modernize its IT infrastructure to keep up with evolving technology.