The Post Office created a new contract and awarded it without competitive tender to an IT supplier that challenged its decision to award a £169m IT contract to OneView Commerce.
One legal expert said there had “obviously been a procurement screw-up” and questioned how this would impact the total cost to taxpayers.
Electronic point-of-sale (EPOS) specialist Escher challenged the Post Office’s decision to award the contract, created to replace the system at the centre of the Post Office scandal, to cloud-based software provider OneView on the grounds that it was incorrectly awarded, according to a source.
The contract for Lot 2 of the Horizon replacement tender was agreed in May and originally set to be formally signed off at the beginning of June. But it was delayed six times due to extensions to the standoff period. Computer Weekly revealed earlier this month that the delays were due to the challenge from Escher.
The other contract in the Horizon replacement plan – Lot 1, a £322.8m contract to run Horizon – was won by Accenture and formally signed off months ago.
Post Office awards contract directly to Escher
Amid the Escher challenge, on 7 August, the Post Office created a new contract and awarded it directly to the supplier. This contract is for Escher’s proprietary Product Journey Engine (PJE). Taxpayers will pay £14m in its first year for development and configuration. Licensing and support for later years will be separately procured.
The Post Office said: “This was a UK5 Transparency Notice and is used where the authority intends to make a direct award without running a competitive procurement. The notice provides transparency to the market by setting out the authority’s intention to award the contract directly and the justification for doing so under the provisions of the Procurement Act 2023.”
They’ve covered themselves in terms of process, but there’s obviously been a screw-up in the procurement process IT outsourcing lawyer
One specialist IT outsourcing lawyer, who wished to remain anonymous, said: “They’ve covered themselves in terms of process, but there’s obviously been a screw-up in the procurement process, which is why they’ve had to award this separate contract, and I think the bigger story is what the total cost to the public sector is.”
The Post Office has repeatedly refused to comment on the challenge by Escher, which according to sources included a threat to sue for loss of profits. The government, which owns the Post Office, and Escher also refused to comment.
Following Computer Weekly’s latest questions on the subject, a Post Office spokesperson said: “As required under the Procurement Act 2023, there is a mandatory standstill period before a contract can be entered into. Any interactions with bidders during this period are commercially confidential and, as such, it would be inappropriate for us to comment as to whether any individual supplier raised concerns about or challenged the Lot 2 contract that was awarded by the Post Office.”
On the new contract, the Post Office tender notice said: “As part of the programme, the Post Office has identified a requirement for Escher’s PJE – a standalone, independently licensable software module incorporating Escher’s proprietary framework, tools and a library of postal-retail customer journeys, comprising three journeys preconfigured for mail-related transactions, a further 10 journeys to be configured by Escher, with the remaining journeys to be configured by POL [Post Office Limited]. The PJE is required to enable complex transactions to be configured, adapted and deployed rapidly within POL’s architecture and broader transformation programme.”
Escher link to Horizon
Escher has a historic link to Horizon. As part of the controversial Horizon system, the Post Office used middleware from Escher, known as Riposte, and the Fujitsu-designed software was written onto it.
There is no suggestion the Escher software was at fault. A source, who worked in the development of the original Horizon EPOS system in the 1990s, told Computer Weekly in 2021 that the big flaw in Horizon was the way data was being written to Riposte.
In July 2025, Computer Weekly learned that two former Post Office executives, who served for decades at the Post Office, including in senior roles, were in the Escher team bidding for the Horizon replacement contract. Although Escher was not at fault, many see the company as being an unpalatable choice, particularly with former Post Office staff working in the bidding team.
The move to an off-the-shelf EPOS system was supposed to reduce complexity.
The Post Office scandal was first exposed by Computer Weekly in 2009, revealing the stories of seven subpostmasters and the problems they suffered due to Horizon accounting software, which led to the most widespread miscarriage of justice in British history (see below timeline of Computer Weekly articles about the scandal since 2009).
