Taxpayers could shoulder millions of pounds more costs associated with replacing the controversial Post Office Horizon software, as the losing bidder for the contract challenges the award going to cloud-based EPOS supplier OneView Commerce.
Already anxious subpostmasters face more uncertainty as sources claim a supplier challenge to the contract award is holding up Post Office Horizon replacement contract. According to a source, Escher – the supplier who made the final two bidders, but lost out on the contract – believes the contract was not properly awarded and is making a claim for loss of profits for a contract it believes it should have won.
Computer Weekly asked the Post Office and Escher for comment, but neither would confirm or deny the claims. The Department for Business and Trade, which owns the Post Office, also declined to comment.
A legal challenge and demand for compensation could cost taxpayers millions of pounds more and delays will hold up the desperately needed Horizon replacement.
The £169.2m deal for an electronic point of sale system (EPOS), known as Lot 2, is part of the plan to remove Fujitsu and its controversial Horizon system from the Post Office business. The contract was initially set to be formally signed on 3 June, but this was extended on six occasions, with the latest delay meaning the earliest it could be signed off is now 22 August.
One outsourcing legal expert described the delay to a contract of “such a high profile” as “irregular, if not unprecedented”.
The other contract in the Horizon replacement plan, Lot 1, is a £322.8m contract to run Horizon. It was won by Accenture and formally signed off weeks ago, but the formal signing of the OneView Commerce contract has been repeatedly delayed, with the standstill period between the initial agreement and its formal signing extended six times so far.
Escher has a historic link to Horizon. As part of the controversial Horizon system, the Post Office used middleware from Escher, known as Riposte, and the Fujitsu-designed software was written onto it.
There is no suggestion the Escher software was at fault. A source, who worked in the development of the original Horizon EPOS system in the 1990s, told Computer Weekly in 2021 that the big flaw in Horizon was the way data was being written to Riposte.
In July last year, Computer Weekly learned that two former Post Office executives, who served for decades at the Post Office, including in senior roles, were in the Escher team bidding for the Horizon replacement contract. Although Escher was not at fault, many see the company as being an unpalatable choice, particularly with former Post Office staff working in the bidding team.
The move to an off-the-shelf EPOS system was supposed to reduce complexity. The Post Office announced its plan to buy an off-the-shelf replacement, which had been on the cards since October last year, when, during his appearance at the Post Office scandal public inquiry, Post Office chairman Nigel Railton said the company’s decision to build the new system in-house was one of two reasons the project was “set up to fail”.
Railton told the inquiry: “One was the decision ‘to get off Horizon’, which is different to building a system for the future, and the second was the decision to build in-house.”
He said there were many “horror stories” of people trying to build systems in-house. “I think, based on my experience, that this was always set up to fail,” he told the public inquiry.
The Post Office scandal was first exposed by Computer Weekly in 2009, revealing the stories of seven subpostmasters and the problems they suffered due to Horizon accounting software, which led to the most widespread miscarriage of justice in British history (see below timeline of Computer Weekly articles about the scandal since 2009).
