The Inland Revenue, has awarded a 10-year, £3 billion (US$5.2 billion) IT outsourcing contract to Cap Gemini Ernst and Young (CGE&Y) and Fujitsu.

Electronic Data Systems (EDS) and Accenture have held the outsourcing contract since 1994. Around 2,250 staff will move from the two companies to work for CGE&Y, and a further 900 will join Fujitsu, said CGE&Y.

"Very simply, CGE&Y's proposal met our business needs best and offered the best value for money. It was very close," Inland revenue spokesman Paul Franklin said Thursday.

CGE&Y and Fujitsu will take over the ASPIRE (Acquiring Strategic Partners for the Inland Revenue) contract from July 2004, Inland Revenue said. The contract is for an initial 10 years but may be extended for a further eight years, it said.

Fujitsu will operate as a subcontractor to CGE&Y, managing the Inland Revenue's data centers, while BT will also be subcontracted to provide WAN and voice-support services, CGE&Y said.

A team has been set up within the Inland Revenue to manage the transition from EDS and Accenture to the new suppliers, the tax authority said.

"It will be a significant transition, but we've been working on it since October, with both CGE&Y and EDS, and we have a transition plan in place," Franklin said.

No jobs will be lost, Franklin said, and all employees will be offered a transition to CGE&Y. "I don't think they'll even have to change building. Terms and conditions will remain the same, and just the name on the door should change," he said.

EDS, Accenture and Fujitsu were all unavailable to comment.