The Department for Work and Pensions (DWP) has handed Atos a £10m-a-year deal to continue handling the IT services for work capability assessments, despite the French outsourcer's plans to quit its controversial role in handling the tests.
Atos will pay a fee to step down as the main supplier of disability assessments in February 2015, six months ahead of schedule, after receiving criticism for the number of decisions subsequently overturned on appeal.
But the DWP has posted an official contract award notice to state it has signed an interim deal with Atos to continue to supply IT services as the department embarks on a procurement process to find a replacement contractor to handle the tests.
Under the terms of the deal, Atos will continue to provide the IT that underpins the assessments until at least 2016, with the option of four yearly extensions, as the department seeks a smooth transition between suppliers.
The DWP said: "This contract is an interim arrangement to support the Authority's statutory duties to deliver certain health and disability benefits.
"Any IT solution that the Authority uses to support the new health and disability assessment provider must not include unacceptable levels of service transition and delivery risk failure that could prevent the Authority complying with its statutory duties."
The DWP justified the award of the contract without a tender process for competitors by claiming the IT services could not be provided by any other firm.
It said: "The technical requirements of the IT services, including hardware, software, premises, mean that another supplier would not be able to build, test and deliver new IT services in time for the new IT assessment services contract."
The news comes at a time when Whitehall is seeking to cut its reliance on large suppliers and boost SMB IT expenditure to 25% by 2015.
However, the DWP was left disputing figures from think tank Institute for Government earlier this month, that suggested HP took in £1.7bn in 2013, 86% of which allegedly came from a job centre contract with the department.
Atos was the fourth-highest earning IT supplier from public sector contracts, raking in £401m in 2013, £35m down on 2012.
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