UK gov paid Atos £24 million to settle lawsuit

The UK government paid Atos £24 million ($29.1m) to settle a lawsuit over the procurement of a new supercomputer for the Met Office.

First reported by the FT, the Department for Business, Energy and Industrial Strategy (BEIS) quietly admitted it paid the French company to settle a suit filed after losing out on a £1.2 billion (US$1.56bn) tender awarded to Microsoft and HPE.

Atos had argued that the government mismanaged the supercomputer procurement process after BEIS and the Met Office found the company’s proposals to be ‘non-compliant’ with the tender’s specifications.

The case was settled in June 2022 with ‘with no admission of liability from any party’ but the terms of the agreement were not shared.

The information about the size of the settlement was included in the BEIS Annual Report 2021-22, published in October 2022.

“The Department and Met Office entered into a settlement agreement with Atos IT Services UK Ltd for joint payment of £24 million to Atos, without admission of liability, in relation to a procurement exercise undertaken by the Met Office,” BEIS said.

BEIS contributed £20.7 million ($25.1m) to the settlement, with the remaining £3.3 million ($4m) being paid by the Met Office.

In a statement, Atos told the FT that it was “pleased to have resolved this matter.”

“This is yet another example of the Conservatives failing to take care of public money. While families are counting every penny, the Tories are shelling out taxpayers’ cash to pay for their own mistakes,” Angela Rayner, Labour’s deputy leader, told the publication.

The government said: “The proceedings regarding supercomputer procurement have been resolved with no admission of liability from any party. This settlement is in the best interest of taxpayers.”

It added that an “independent review has assured that all procurement processes were followed and there were no failures associated with governance or lack of controls”.

The legal challenge posed by Atos was the result of a February 2020 announcement that the Met Office would spend £1.2bn (US$1.56bn) on building the world’s most powerful supercomputer dedicated to weather and climate.

Atos and competitor Microsoft both submitted a final tender to build the supercomputer, however, it was announced in February 2021 that Microsoft had been awarded the contract.

Atos then filed a legal challenge against the decision, based on claims that the Department for Business, Energy and Industrial Strategy and the Met Office had violated procurement law when they had deemed Atos’s tender to be non-compliant.

The Microsoft supercomputer will comprise four Azure-integrated HPE Cray EX supercomputers based on AMD “Milan” Epyc processors, and will be capable of storing nearly four exabytes of data. The first generation of the supercomputer solution will have a combined total of over 1.5 million processor cores and over 60 petaflops of aggregate peak computing capacity. Microsoft says it will deliver further upgrades in computing capability over the next ten years.

“Microsoft is hosting the multiple supercomputers underlying this service in dedicated halls within Microsoft data centers that have been designed and optimized for these supercomputers, rather than generic cloud hosting,” Microsoft later told DCD. Data Center Dynamics