UK’s Nest and Atos prematurely end £1.5bn contract after disagreement

The UK National Employment and Savings Trust (Nest) has terminated its contract with Atos after the two failed to agree on the service delivery timeline. In February 2021, Nest announced that it had appointed the French IT service provider to design and build a digital scheme administrator in a 10-year contract with an optional extension period of up to 5 years and an additional 3 years for transition.

Atos would be responsible for the provision of software packages, databases, operating systems, and IT consultancy services.

However, barely two years into the contract, there has been a fallout. What led to the collapse? According to a popular publisher, Nest requested some last-minute design changes which prompted Atos to request an extension of the product delivery timeline. However, Nest was unwilling to renegotiate the deadlines and maintained that Atos had to adhere to the terms and conditions set in the contract.

The contract termination is another big blow to Atos which has been undergoing some tough times since it announced that it was exploring a two-way split of operations in June last year. According to reports, the termination of the £1.5bn contract may lead to as many as 1,000 Atos job losses in the UK and India.

“We want to thank the team at Atos for all their support and partnership over the past two years. They have been instrumental in helping us transition to becoming a more data-led organisation. They have also helped us crystallise our digital transformation journey, setting us up for a strong future,” said Gavin Perera-Betts, Nest chief customer officer in a prepared statement.

"As we start to plan the next phase of our transformation programme, we're taking some time to review the support we'll need. The services Nest offers to members will continue to operate as usual."

This marks the official breakup between Nest and Atos and the publicly owned pensions scheme will continue working with their long-time partners, Tata Consultancy Services (TCS) while it maps out its plan for the future.

Speaking to the press, John Ainsworth, head of Atos Business Transformation Services, said: "We are proud of the work we've achieved with Nest and have helped set strong foundations for the organisation's digital transformation journey. We are working with our teams and partners to manage the transition of the contract."