The Ministry of Defence has cancelled a contract tender for IT consultancy services worth £141 million.

The cancellation follows Chancellor George Osborne's Emergency Budget a fortnight ago, in which he announced that 25 per cent cuts would be made over four years in most government departments, as part of efforts to cut the UK's £155 billion deficit. Industry experts predicted that IT projects and jobs would be the first to feel the squeeze.

The framework contract, which was first advertised by the Technical Professional and Consultancy Services (TPAC) on 21 July 2009, was expected to last two years with options to extend for 24 months.

Bids were invited from suppliers of consultancy, ICT and support services, and the MoD had planned to award the work to a minimum of three suppliers for each of the six lots it had divided the contract into.

The first lot required a supplier to carry out studies into the MoD's existing software and applications while the second lot required business process and change management expertise. Other requirements included consultancy support in information systems (IS) communications, and networking, risk management and business continuity.

Meanwhile, as well as tendering for support relating to Oracle products, the MoD tendered for IS security IS service management skills for 'end to end' projects.

Elsewhere, work continues on the MoD's £8 billion Defence Information Infrastructure project, which focuses on providing a single information and communications platform to the MoD, partly by supplying hand-held terminals to 300,000 forces personnel around the world.