Five bidders each left footing estimated €200,000 bill for doomed tender process
IBRC, the former Anglo Irish Bank, has abruptly cancelled plans to hire outside companies to manage its day-to-day operations in areas such as technology, facilities management and human resources.
Staff at Irish Bank Resolution Corp (IBRC) were told of the decision yesterday, after the plug had been pulled on a 10-month search for external providers of "outsourced" services.
Bidders for the contract are understood to have learned of the decision earlier this week.
Around one-in-four of the current 1,000 jobs at the bank would have been directly affected if the plan to outsource the bank's information technology, facilities, back-office operations and human resources work had gone ahead.
The original plan had been to outsource all of those functions in a single five-year contract.
If it had gone ahead, staff currently working in the areas affected would have transferred from employment with the state-owned bank to the outsourcing provider.
The bank last night declined to say why the decision had been taken not to proceed with the outsourcing plan.
Up to five potential service providers are understood to have been shortlisted for the outsourcing contract three months ago.
KPMG managed the tendering process on behalf of the State. One source involved in a bid for the work estimated the tender process had cost around €200,000 for each bidder.
It means around 250 staff will now remain directly employed by the bank itself.
IBRC is being gradually wound down over a 10-year period. All jobs at the bank will ultimately be lost as it is shut down. Sources at the bank said last night that some work might be outsourced in the new year, but it would be done through smaller contracts for specific functions rather than an over-arching management contract.
It is the second time this year that a major outsourcing plan has been cancelled by the bank.
In April, IBRC abandoned a multimillion euro deal to outsource parts of its former wealth management business to Key Capital.
The unit is being managed internally instead, and will be "wound down" over five years.
At the time the outsourcing scheme was shelved, IBRC said the deal with Key Capital would "not deliver the best outcome for all stakeholders".
IBRC had spent more than a year working on ways to dispose of that business.
The "complexities" of transferring around 30 staff and assets valued at €500m was blamed for the decision not to proceed with the deal back in April.