Capita £370M bid 40% under UK.gov estimate for Oracle HR and finance system project, court case reveals

Cost model designed to protect against low-cost bid bias, claims rival

A new court filing has revealed the UK’s Department for Work and Pensions accepted a bid from Capita to run its new Oracle-based HR and finance system at £272 million less than its own cost modelling.

In March, the UK outsourcing company won the contract for running shared services for £370 million over ten years. The central government department had earlier produced a "Should Cost Model" — designed to protect against a bias towards low bids — which provided a total price of £642 million, according to court papers. Capita’s bid was 42 percent less than the “should-cost” estimate.

Since January, the deal to run HR and finance systems for four UK government departments has been the subject of a legal claimfrom rival bidder Sopra Steria, which alleges Capita's bid was "abnormally low" and based...

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