In January 2004, the Inland Revenue entered into a contract with Capgemini to provide IT services to support the Department's business. The contract, known as ASPIRE (Acquiring Strategic Partners for the Inland Revenue), replaced two previous contracts with EDS and Accenture and, following the merger of the Inland Revenue and HM Customs & Excise in 2005, the latter's IT services contract with Fujitsu was incorporated within ASPIRE in April 2006. This change from one supplier to another was the first of this scale in the public sector, and the contract provides wider lessons for the public sector in re-competing major contracts, particularly relating to the payment of transition costs. The cost of the contract has risen from £2.83 billion to £8.5 billion over the 10 year term. Following on from a NAO report on this topic (HCP 938, session 2005-06; ISBN 9780102939170) published in July 2006, the Committee's report examines the procurement process, the transition to a new supplier and the performance of the ASPIRE contract to date. Findings include: i) before concluding the deal, the Department should have evaluated bids against a range of demands for IT services and analysed the effect of different scenarios on suppliers' prices and profit margins; ii) it should have evaluated the performance of consultants and the lessons to be learned from their use, not only for their own benefit but for that of other departments; iii) by contributing to bid costs and paying transition costs to secure competition for the contract, the Department incurred a premium of £51.9 million; iv) it should set more challenging performance targets to impose sufficient discipline on suppliers; and v) the Government should not be placed in the invidious position of having to commission further work from a contractor in order to recover compensation for underperformance.