ICT Telecoms and Software Expert Advice

Advising on the commercial impact of technology and
market changes in telecoms, software and IT services

Home > Media > Telecoms and Software News

TELECOMS AND SOFTWARE NEWS

Lockheed Martin wins 2011 census contract

Georgina O`Toole

Lockheed Martin wins 2011 census contract

Lockheed Martin has beaten T-Systems to a £150 million contract to support delivery of the UK 2011 census. Lockheed now faces intense scrutiny as critics question the decision to allow a US defence contractor to handle personal census data. Meanwhile, T-Systems has another reason to question its strategy for entering the UK government market.

ONS began its search for a supplier for the 2011 census in 2005. It short-listed six companies for detailed evaluation and towards the end of 2006 selected T-Systems and Lockheed Martin to run technology and services tests across part of England and Wales during May 2007 in preparation for the full census. The performance of the two companies during the test period, in which they were challenged to develop high-tech solutions to collect, process and respond to millions of questionnaires, will have impacted the final selection of the overall winner for the 2011 programme. They each made their final bid for the contract in August 2007.

T-Systems must question its approach

In 2006, T-Systems' then-CEO Lothar Pauly expressed his desire to place a stronger emphasis on business development abroad, particularly in Western Europe, including the UK. With the arrival of new CEO Richard Clemens in December 2007, that strategy continued. Indeed, its international business as a proportion of total non-captive revenues has risen steadily over the last few quarters (it stood at 28% for the full FY07).

Nonetheless, T-Systems remains over-dependent on the domestic German market. Attempts to expand its presence outside of Germany on the back of major outsourcing deals have not been as successful as it might have hoped. The UK public sector is a case in point; T-Systems has very little experience of the sector but has shown considerable ambition over the last few years. Aside from the Census 2011 contract, most notably it targeted the Home Office eBorders contract, where it competed for the prime contractor role but lost out to the Raytheon-led Trusted Borders consortium.

It is notoriously difficult to break into the UK public sector market. However, it is possible, as the likes of Raytheon have recently shown. T-Systems has put a lot of time and effort into bidding for some high-profile contracts but has emerged 'runner up' more than once. The company must now assess its approach and either cut its losses or invest more heavily in industry-sector specialists if it is to ever make its mark.

US defence contractors defy the critics

Lockheed Martin is the incumbent; it was involved in the 2001 Census, during which ONS spent a total of £87.5 million with external suppliers. The prize is bigger this time round, as ONS has contracted out a broader range of services. For example, for the first time, ONS requires a system allowing for census questionnaires to be completed via the Internet.

However, in winning the deal Lockheed must also stand up to its critics. Since the 2001 Census, the US Patriot Act has been introduced compelling personal data held by any company on systems in the US to be made available to government intelligence (without informing the people involved). As a result, critics have expressed concerns about the involvement of a US company (in particular a US defence contractor with clients within the intelligence community) in collecting and processing Census data.

What's interesting about this award, and indeed the award of the Home Office eBorders contract to Raytheon, is that the UK government shows little concern about working with non-UK companies on projects involving sensitive information. Instead it believes that any potential obstacles can be overcome. In this case, ONS owns all the data, all data processing will be conducted by British companies (in Britain) with no data leaving UK shores either physically or electronically, and no US companies (including Lockheed Martin staff in the UK) having access to personal census data.

This approach should work as long as all processes and procedures are correctly adhered to by client and supplier. However, recent events, for example at the National Offender Management Service, have proven that data loss by external contractors is possible despite strict rules being in place. Any failure by Lockheed to protect the personal data of UK citizens will have serious implications for all external contractors to UK government, regardless of whether they are controlled by a UK foreign parent.

About:

This article is an extract taken from Ovum's Straight Talk service. This daily email bulletin provides our expert's views and opinions on important news and events in global IT and telecoms. If you have a comment or question regarding this article then please submit your details here:

Email address:

Suggestion:

If you would like to find out more about Straight Talk please contact StraightTalk@ovum.com

If you would like to find out more about Ovum services then please click here for details

Search

Contact Us

Expertise

© Datamonitor - Ovum is a Datamonitor company