Fujitsu top secret military contract needs urgent review, say MPs

A Government contract with Fujitsu to run a top secret UK military system must be urgently reviewed, MPs have warned.

i revealed yesterday that the IT giant has been managing a highly secretive military computer system faciliating the “strategic command and control of UK armed forces” for decades.

The contract should have expired nearly two years ago and was allocated to another firm but delays to security vetting have forced the Government to issue costly extensions to Fujitsu to continue to run the sensitive systems, according to two UK intelligence sources.

The military project is “not public and kept secret”. In the interest of national security, i has kept further details of the contract out of this story.

Three MPs, who sit on the Defence Select Committee, urged the Government to review Fujitsu’s work with the Ministry of Defence following i‘s revelations.

The cross-party group of MPs specialise in defence and scrutinise policy and related public bodies such as the Armed Forces. They are often designated access to information or operations which are otherwise kept from public view.

Fujitsu has enjoyed a close relationship with the Ministry of Defence for almost 50 years, providing IT systems for ongoing military operations in the UK and abroad including technical support for the Royal Navy’s nuclear submarines. Fujitsu claims to have 3,500 security-cleared staff across the UK and Ireland, as well as a dedicated National Defence Centre providing support to over 220,000 UK MOD users.

But the Government contractor has comes under close scrutiny following the airing of ITV’s primetime drama about the Post Office Horizon scandal, Mr Bates vs The Post Office, leading to a government-wide ousting of the Japanese firm.

Labour MP Kevan Jones urged the Government to “get to grips” with security clearance delays, which he claimed were having a “negative impact across the entire UK defence industry.”

According to a UK intelligence source, incoming staff for the contract have the “wrong level of clearance”, meaning “they must go through the vetting machine and therefore there is a delay in taking over the contract”.

And a Foreign Office insider said replacing Fujitsu was a challenge as they have “so many top-secret contracts with government”, and they “have access to senior officials in every agency and department.”

Mr Jones told i: “It is incredibly concerning that one company can have such a stranglehold over sensitive government operations.

“When contracts are not extended or awarded elsewhere there must be a swift handover of capabilities and systems.”

SNP MP Martin Docherty-Hughes called on the Ministry of Defence to “explain itself” about the amount of money being spent on the contract.

“Clearly the impact of the privatisation of the very basic functions of the state are coming home to roost for Westminster, from the postal service to the MOD,” Mr Docherty-Hughes told i.

Former Armed forces minister Mark Francois also called for an “urgent review” into the MOD’s use of the IT firm.

He said: “The MoD should now conduct an urgent review of any further contracts with Fujitsu, with a view to protecting both national security and sub-postmasters, who they should surely help to compensate for the misery that failed IT system has already caused.”

More than 900 Post Office managers were convicted between 1999 and 2015 after the IT firm’s faulty accounting software Horizon made it look as if money was missing from their sites.

Lee Castleton, a former sub-postmaster who went bankrupt as a result of the Post Office scandal, said Fujitsu are relied upon by government “very significantly”, adding that quality of performance is not always the reason the company wins a government contract.

“The complicity of government never ceases to amaze me,” he said. “I just hope that the quality and the calibre of the people running the MOD contract is substantially better than those that were running the the horizon system.”

The Foreign Office source said the money Fujitsu will be charging for the contract extension would be “more than enough” to pay any fines linked to the Horizon scandal.

Last month, Fujitsu execs wrote to the Cabinet Office to say the firm has “voluntarily” decided not to bid for government contracts during an inquiry into its conduct, unless it is asked.

A UK Government spokesperson didn’t recognise the delays caused by security vetting, insisting instead that Fujitsu is “in the transition period between contracts, continuing to deliver their obligations as contractually agreed”.

The spokesperson said: “More broadly, it is right that Fujitsu has withdrawn from bidding for new public sector contracts until the Post Office Horizon inquiry concludes.”

According to data previously revealed by i, Fujitsu won nearly £700m worth of contracts using a Government priority procurement system since 2015, including one with HMRC that was valued at £500m, with some of the deals extended as recently as December last year.

Fujitsu declined to comment.

Fujitsu’s relationship with Government

Until January, Fujitsu continued to win contracts to carry out work for the Government despite the firm being at the centre of the Horizon Post Office scandal, thought to be one of the most widespread miscarriages of justice in UK legal history.

The Japanese IT giant won £6.8 billion for nearly 200 contracts from the public sector since 2012, including 11 contracts by HMRC worth over £1 billion, and 12 contracts with the Ministry of Defence worth £582 million.

The UK Government awarded £4.9 billion in contracts to Fujitsu since the High Court found that the Horizon system did contain bugs, errors and defects in 2019.

Earlier this year, i revealed that the Environment Agency, a public body, extended Fujitsu’s contract to provide England’s flood alerts system at the end of December. In the same month, the IT giant agreed a £485 million award with the Education Authority in Northern Ireland.

Fujitsu was signed up to provide HS2 computer services last year, and it has contracts with the Home Office and other public bodies worth hundreds of millions of pounds.

Last year, peers branded “immoral” the Government’s decision to hand Fujitsu a contract to work on a new UK emergency alert system for mobile phones and tablets.

The firm was handed a contract worth £5m, running until October 2025, to carry out the work, and the system was tested in April.

A total of £3.6bn in contracts have been awarded to Fujitsu during Rishi Sunak’s time as chancellor and prime minister.

The Government previously said that all contracts given to Fujitsu have been awarded in line with regulations and transparency guidelines.

Fujitsu also continues to hold contracts worth tens of millions of pounds with the Post Office to support the branch accounting system Horizon and data centres.

The Met Police is currently investigating two former Fujitsu experts, who were witnesses in trials of Post Office managers, for perjury and perverting the course of justice. The force said the investigation was launched in January 2020 and two people had been interviewed under caution. No arrests have been made.

The Japanese IT firm has co-operated with the ongoing statutory public inquiry.