Sopra Steria sues UK government over £958M Capita outsourcing award
- Reference: 1772192713
- News link: https://www.theregister.co.uk/2026/02/27/sopra_steria_sues_ukgov/
- Source link:
In court filings accessed by The Register , the French outsourcer claims the Department for Work and Pensions (DWP), which leads the shared services program for multiple departments, failed to spot that Capita's bid for the contract was "abnormally low" relative to Sopra Steria's tender for the same work.
It also alleges that after the UK outsourcer was named preferred bidder for the contract, the DWP conducted further renegotiations around Capita's tender. Sopra Steria argues it was excluded from any such process.
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A DWP spokesperson said: "We are aware of the legal challenge and are cooperating fully with the relevant processes. As this matter is currently subject to litigation, it would be inappropriate to comment further at this time. Our priority is to ensure continuity of service and value for money for the public." Capita declined to comment.
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The Public and Commercial Services (PCS) Union this week claimed Capita's winning bid was £700 million. The contact award, which will see Capita handling payroll for 250,000 civil servants, was criticized by the union.
The Register has asked Capita and the DWP to confirm the size of the bid accepted.
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The DWP told us: "We have delivered a robust procurement process, in line with Government procurement regulations to identify a preferred bidder for the Synergy BPS contract.
"We stand ready to work with the successful bidder to ensure a smooth transition of service. Our priority remains to ensure continuity of service and value for money for the public."
The DWP leads the Synergy program, intended to transfer it, the Ministry of Justice (MoJ), the Department for Environment, Food and Rural Affairs (Defra), and the Home Office to one SaaS ERP and HR system with a common set of business processes. [5]Oracle and IBM have already won the contract for ERP technology and systems integration as part of a single £711 million deal.
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Sopra Steria is the incumbent provider for three of these departments' shared service, the Oracle EBS-based Single Operating Platform, run by SSCL, which the French company owns. The Home Office is not part of that shared service, but SSCL also supports the department and moved it from EBS to Fusion in 2021.
In September 2024, [7]the DWP launched the competition for a supplier to develop and run business process services (BPS) for the Synergy departments, under a contract set to be worth up to £958.7 million for ten years, including extensions.
The tender said the BPS contract would "deliver modern and innovative value for money services which maximize positive user experience." It added: "The BPS supplier will also be challenged to continuously evolve, improve, and optimize service delivery over the course of the contract."
According to the legal papers filed by Sopra Steria, in December 2025, the DWP confirmed it had been unsuccessful in the procurement and that Capita had won the tender.
The legal papers allege, based on information Sopra Steria claims it received: "Capita was not able to satisfy the requirements" set out in the selection process because of its "limited business in payroll and HR services" and because it could provide "few examples of design, deployment and operation of BPS Services running on... an Oracle SaaS ERP" system.
Following correspondence between the DWP and Sopra Steria, the government department provided an assessment of Capita's bid, which the outsourcing vendor alleges in the legal filing shows Capita's implementation service charges were "assessed as appearing abnormally low" as of July 2025. The DWP then made two requests for clarification, one in August 2025, which was issued after the evaluation end date, Sopra Steria alleges. Following this clarification process, Capita's bid was determined to be "not abnormally low."
The legal claim also alleges that Capita's pricing implies "Capita's proposed staffing solution is significantly below the current staffing levels for the BPS service, and that proposed by the [DWP]. Such low staffing levels raise serious and legitimate concerns as to the ability of Capita to provide the Synergy BPS in line with the [DWP's] requirements, both in themselves and in conjunction with the apparently low level of technology investment from Capita."
The claim also alleges that the DWP, Oracle, and IBM discussed a change request to their project, which included consolidation of go-live dates across Synergy departments, postponing go-live dates and altering parts of the solution.
The DWP decided to renegotiate Capita's tender to help it align with this change request after the outsourcing company's selection as preferred bidder, Sopra Steria's particulars of claim allege. "Such renegotiation of the tender and/or amendment to the Synergy Contract is in breach of" the DWP's obligations under the procurement rules, the claim alleges.
[8]Quebec vehicles agency spent C$245M over budget on SAP ERP it wasn't sure it needed
[9]UK council digs deeper into capital assets to keep Oracle project afloat
[10]Most SAP migrations bust budgets and project timelines, research finds
[11]Birmingham City Council's Oracle ERP fiasco now £144M and still not working
[12]Capita taps Microsoft Copilot to dig it out from UK pensions backlog
Sopra Steria wants the court to terminate and/or rerun the procurement process. It is also asking for damages. No date has been set for the hearing, pending requests to assess further commercially sensitive information.
Regardless of its merit, the claim comes at a difficult time for Capita. It was forced to defend its performance in [13]the Civil Service Pension Scheme , which has seen a string of complaints from members.
In a statement issued this week, the PCS called the DWP contract award to Capita a "reckless gamble."
PCS general secretary Fran Heathcote said: "Capita is already at the center of a pensions crisis that has left retired civil servants in distress. Privatization is a failure, so why does the government continue to reward those responsible with yet another massive public contract?"
The DWP will also want to avoid a legal case derailing progress on Synergy. In 2021, [14]the Ministry of Justice cancelled its ERP upgrade project to get in step with the wider program. Delays could jeopardize the goodwill needed to change people's working processes. ®
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[5] https://www.find-tender.service.gov.uk/Notice/030687-2024
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[7] https://www.theregister.com/2024/09/18/dwp_business_processes_procurement/
[8] https://www.theregister.com/2026/02/20/saaq_sap_overrun/
[9] https://www.theregister.com/2026/02/06/west_sussex_oracle/
[10] https://www.theregister.com/2026/02/05/sap_migrations_research/
[11] https://www.theregister.com/2026/01/29/birmingham_oracle_latest/
[12] https://www.theregister.com/2026/02/17/capita_microsoft_copilot_pensions/
[13] https://www.theregister.com/2026/01/29/capita_pension_portal_update/
[14] https://www.theregister.com/2021/03/29/moj_cancels_100m_erp_procurement/
[15] https://whitepapers.theregister.com/
Re: In other news...
Indeed, they both seem to have left a wake of poorly implemented solutions behind them.
Parasites
From the mugged tax payer point of view, what's the difference?
Re: Parasites
You start to wonder if anyone has even heard the term "accountability costs". I mean, sure, ok, maybe we can save some money on some project by outsourcing it; but when it goes wrong - and it always goes wrong - what leverage do we have over the people responsible and can we get them to carry the costs for making it right? None? We can't? Oh. Not looking so much cheaper than doing it in-house now is it?
I'd have much more sympathy for this sort of thing if we negotiated contracts that said "You're getting paid £100 million a year for ten years to meet the following contractual terms. You will not get paid any more regardless of the cost over-runs. There will not be a contract extension, delivery on this timescale is non-negotiable. If you cannot meet all terms agreed at the pre-agreed milestones you will be considered in breach of contract and you will be required to re-pay everything that has been paid so far. If you go bankrupt because of this you will be nationalised, work will continue, and everyone at the executive level will be fired with no compensation."
Watch how fast people stop lowballing numbers and allowing massive over-runs when the terms of the contract actually include penalties that will hurt for not meeting them. Then watch how much the difference in cost between doing it your damn self and outsourcing it vanishes.
lowest price - lowest service
A number of years ago I was working at JPMorgan when they had outsourced their IT services to IBM, who had won the contract as the lowest bidder. However, the agreement included professional services billed separately from the core contract.
By the time I joined, the arrangement had been running for several years, and it was widely understood internally that almost any change was classified as professional services. The associated costs steadily accumulated and, over time, likely matched or even exceeded what some of the higher bidders would have charged in the first place.
As I understand it, JPMorgan eventually decided to terminate the remaining contract early and bring it all back-in-house (backsourcing). This may have not been the only reason because there was a merger at the time and I guess there probably were a few reasons.
As much as I dislike Crapita
This is something that should be handled in the UK by a UK company. Data like this should not be handled by a foreign company. Full stop.
Re: As much as I dislike Crapita
Better yet, as this is the Civil Service, they should be running payroll and HR directly in-house, and not pissing taxpayers money away on private profits at all.
Of course, that modestly increases the total number of civil servants required, which is currently anathema to the British Govt (even though a broadly-similar number of workers will be employed just to service the CS contract), so simply cannot be countenanced.
French?
Is [1]this them?
[1] https://www.youtube.com/watch?v=YfkPcTNnGNk
In other news...
Voracious glutton annoyed that someone else ate the pies...