The Department for Work and Pensions has ripped up its multi-million pound desktop support contract with Fujitsu before the company even started work.
HP lost the contract, one of the UK's biggest, when it was handed to Fujitsu in January last year.
But last Friday Fujitsu had its contract torn up and HP was asked to continue to do the work in the short term.
The original deal was set up by DWP and OGCbuying.solutions and was valued at £4.5bn for desktop solutions across departments. When HP lost the DWP contract it was worth less than 15 per cent of that amount.
A spokeswoman for the DWP said: "The contract was terminated on the 11th; HP is covering in the short term." She was unable to say what would happen next and whether the contract would go out to tender.
Fujitsu sent us the following: "Fujitsu can confirm that it has received notification from the Department for Work and Pensions (DWP) that they wish to bring the desktop contract, awarded in February 2010, to an end. We are not able to provide any further comment at this stage."
HP refused to comment on this story.
Sources within the department who contacted the Reg said Fujitsu had missed three start dates to begin the work. Fujitsu had been scehduled to start work on 31 August 2010.
Staff who had been moved from HP to Fujitsu are now in limbo, but might eventually be expected to move back to their original employer.
The DWP said that this was an issue for the companies concerned, not the department. It was also unable to say whether or not the contract would go out to tender again. ®