A proposed five-year ICT outsourcing contract between Cumbria County Council and IT services provider Computacenter has fallen through just two weeks before it was planned to start.

Cumbria Council announced in January that Computacenter was its "preferred bidder" for the contract to supply IT and telecommunications services from April 1 2012. The contract was due to be worth £10 million in its first year, and £33 million in total.

Computacenter was to replace Agilisys, which has been Cumbria’s IT supplier for the past five years.

However, the council announced yesterday that "following extensive discussions with Computacenter, it has not proved possible for the two parties to conclude the finalisation of the proposed contract".

The council is therefore putting in place interim arrangements with Agilisys to ensure service continuity from April 1st," it said, and is now "assessing a number of options for longer term service delivery."

Computacenter’s director of public sector Chris Price confirmed that "we haven’t been able to agree terms that were agreeable to both parties.”

A press release from Cumbria Council in June 2011 revealed that only the following companies were eligible to bid for the new contract: BT Global Services, local supplier Commendium, Computacenter, Fujitsu and TCS.

Agilisys was not eligible to bid, even though Cumbria councillor Liz Mallinson said in January that the company had "served us well over the last five years and who have made a significant contribution to the councils improvement journey’.

According to a case study on Agilisys’ web site, 85 IT staff were transferred from the council to the company when the original deal was agreed. Agilisys says that during the engagement with Cumbria, it built a new data centre, increased network bandwidth by 500% and generated £1 million-worth of savings through electronic procurement.