Back online, the ICT moratorium, project reviews and contract renegotiations, all up and running

It's good to be back online after the election break. I should have been online earlier but to be honest as you can see from the heading I have been rather busy. So time for an update on the Government ICT front. First of all the Government announced, and are executing, three things in quick succession:

1. The ICT Moratorium. Central government departments, agencies and NDPBs must not sign any new ICT contracts, contract extensions/modifications above a value of £1 million without specific agreement by the Treasury. This agreement will only be given following approval by the Minister for the Cabinet Office advised by the Government CIO. The freeze applies to all contracts and projects where ICT is a key element to deliver the service or outcome. It covers all new contracts, contract amendments and extensions, pilot projects, feasibility studies and proof of concept projects above £1m in value. No new OJEU notices should be issued to imply that new ICT based contracts will be started. There are some areas/projects that are excluded such as the Olympics and specialist defence.
2. The ICT project review, sets about reviewing all core projects. The objective is to ensure we review the majority (>80%) of all projects where ICT is a key element. This is being done in two ways: For a selection of projects above £50m (total life) the Major Projects Review Team will be undertaking an in depth review - this review looks at non ICT based projects as well. For projects less than £50m we believe that departments are best placed to undertake the initial review. Departments understand what projects they are running, why they are running them, have access to all the pertinent project and financial data and can ascertain the impact of closure or reshaping. Therefore, departments are reviewing all their existing ICT projects (those with a significant/ core element being ICT products, services either provided internally or externally) to ascertain if:

• They are key to delivering a required citizen or business outcome which is consistent with government priorities.
• They can be delivered based on their past record of keeping to time and budget.
• They will deliver the agreed outcomes and a positive financial NPV/ROI
• The project could not be done in a different or more cost effective way - By merging with other projects or significantly reducing the scope/ complexity of the requirements.
• It has a poor delivery record; is significantly late or over budget; too much reliance on external resource; poor articulation of benefits, or few tangible benefits.

  Following the departmental review my team will review the departmental actions and results. We will also look horizontally at projects across Government to ascertain if there are any further opportunities for synergy or additional cost savings. Finally decisions to continue or reshape projects will of course be subject to later spending review decisions.

The ICT project review work will feed into two overlapping phases:

1. The projects decommissioning phase. Clearly there will be a period of transition as projects are reshaped, people released, and contracts terminated or changed. As projects are closed/ reshaped this may free up officials who should be used to replace interims, consultants and contractors, if their skills match. We expect decommissioning to start as soon as practicable accepting that there is a potential linkage to the Contracts Renegotiation Phase.
2. The contract renegotiation phase. As we change projects, and therefore contracts, the sum of the project changes, by supplier, and the aggregate spend we have with each supplier will enable us to enter a renegotiation phase with ICT suppliers. This renegotiation team will include my team, OGC, Departmental Commercial Directors, Chief Information officers and legal specialists.

   However we do not envisage this to be a one way conversation. Suppliers understandably will wish us to change some of our ways of doing business, maybe standardise/simplify/ reduce our requirements or indeed think differently about topics such as risk transfer or the way our teams are structured that drive up their costs. The main focus of our Minister is in year financial savings.

Exceptions Procedure for the moratorium Clearly there may be situations where the introduction of the moratorium might go against our objective of finding cashable savings, or might put at risk the viability of an ICT organisation or indeed frontline citizen/business services. Authorised exceptions will only be considered where:

• the new spend/contract needs to be approved to achieve value for money as there will be a direct negative consequence of a delay;
• a delay would stop or directly impact delivery of a current citizen/business facing service that is consistent with the Government's priorities;
• the project/programme delivers a mandated legislative requirement where there is no flexibility on end date and the delay would significantly jeopardize the end delivery date;
• an SME ICT supplier might be put at risk of failure/collapse due to the delay in signing the contract and the contract represents good value for money.

 

So busy busy busy.

Comments

[MIchael Smethurst]

Hopring you will be able to post soon with reflections on impacts and implications of the Spending Review.

[John Suffolk]

Philippa thank you for your posting. We have left the decision on whether departments should submit an exception request to the discretion of every department. Given that you are working to March 2013 I wonder if the department is taking a view that this decision does not need to be taken in advance of the completion of the spending review. If you believe that a decision needs to be taken question you should escalate your concerns to your manager/ SRO of the project.

Best wishes

John

[Philippa Bradley]

I have experienced a halt to a procurement which will certainly provide substantial savings to government and the delay is putting at risk a third of civil service salary payments post March 2013. How can the exceptions process be "fast-tracked" as it is apparent that civil servants are reluctant to make the case for an exception to this moratorium even with a very solid case.

[twitter.com/JeffreyPeel]

Frankly these guidelines should have been implemented years ago.

[AdmiralBowyer]

Nice to see you back on line. Support the sensible approach to reviewing g the applicability of certain ICT projects; still have concerns about future ICT procurement strategy and the procurement bodies. Not sure if Public Sector and Suppliers are fully aligned in truth. Never the less an exciting time for all and one which needs to met with innovation, enthusiasm and commitment.