hmrc has awarded Amazon Web Services a near-£473 million contract to migrate services from three Fujitsu-run datacentres, a decision recorded in a contract notice dated 23 March (ET). The contract, priced at £472. 8 million including VAT, is set to run for a minimum of seven years from April 2026 with options to extend to ten years. The procurement is aimed at enabling exit from the legacy datacentres and moving HMRC-hosted services onto a hyperscaler cloud platform hosted in the UK.
Critical details of the award and scope
The commercial notice states the appointment followed a single tender process: “one tender received [and] one tender assessed in the final stage, ” noted in the published documentation. The programme’s technical objective is explicit: “The objective of the programme is to exit all services from three managed datacentres and decommission any remaining infrastructure within the current contract period of the incumbent data centre hosting provider [which ends in] June 2028, ” the notice confirms. The contract allows for additional services at HMRC’s discretion, including application modernisation, cloud cost optimisation, security hardening and staff training.
Financially, the award was framed against an earlier estimate of near-£500 million including VAT; the formal award figure included in the notice is £472. 8 million. The notice also made clear the procurement targeted major hyperscalers capable of migrating a diverse legacy estate that uses multiple operating systems.
Immediate reactions: Hmrc notice and regulator response
HM Revenue and Customs published the commercial notice that set out the singular tender outcome and the migration objectives. The Competition and Markets Authority has signalled regulatory scrutiny of the market, stating that “competition is not working as well as it could” when commenting on the dominance of the largest cloud providers. Political scrutiny has already entered the record: a parliamentary question by Conservative MP Julia Lopez asked government bodies how limited competition is affecting public sector procurement costs.
Quick context
The procurement was launched to replace three Fujitsu-managed datacentres and to host migrated services on a UK-based hyperscaler cloud platform. The incumbent data centre hosting contract is scheduled to end in June 2028, driving the timetable for migration and decommissioning.
What’s next
The award triggered a statutory standstill period that runs until 1 April (ET), with the notice indicating the contract may be signed on or around 14 April (ET). Over the coming months the prime tasks will be finalising the migration plan, confirming which services fall within the programme scope and beginning technical negotiations on hosting, modernisation and security work under the multi‑year agreement. Expect regulators and parliamentarians to press for answers on market competition and value for money as the programme moves from award to execution, and for hmrc to publish further procurement and implementation details as negotiations conclude.
