Government set to pull IT snouts out of the trough
- Summary:
- The public sector is rife with costly IT failures, but the usual suspects continue to pick up new contracts. Is the time approaching when doing a bad job might not lead to fresh revenue streams?
Screw up on an IT project in the UK public sector and it's really no big deal.
If you're unlucky you'll have to endure the grandstanding interrogation of the House of Commons Public Accounts Committee whose chair Margaret Hodge will snap at you, subject you to a dose of blistering sarcasm and then put out a chippy little press release warning that we're all off to hell in a hand cart…again.
But life will go on - and the chances are that it won't even impact on your chances of picking up other bits of government work!
And in the unlikely instance that it looks as though there might be some silly idea about trying to take matters further, standard procedure for suppliers is to threaten to sue the UK government for breach of contract or unreasonable behaviour or some such. Civil servants tend to fall over like nine pins once you do that.
It's almost as though they suspect that you might have a point: the contract wasn't drawn up properly or they changed the specification half way through or they're responsible for lousy supplier management. Whatever the suspicion, Sir Humphrey isn't keen to risk calling your bluff on that one. Easier by far to write another cheque…
That's keeping at least one major supplier in recurring revenue at present, while another has a very large, loaded and threatening looking - but as yet unfired - legal gun pointing in the direction of one Whitehall department.
Snouts in the trough
The lesson is simple. Essentially, once your snout's in the public sector trough, it's not coming out no matter how badly you mess up or how much of other people's money you waste or how dreadfully wrong the IT project in question goes. Your spoon is in the gravy, right up to the elbow and you're not finished supping yet.
But all that could be about to change. There is now a very real prospect that - and whisper it softly, dear reader, lest we scare the horses - that in future if an IT supplier screws up and it's their fault, then they might not be given any more work of a similar nature!
Now from a private sector, that seems entirely normal and sensible. If you hire someone to mend your roof and he or she ends up leaving a dirty great hole above the bathroom instead, then you wouldn't use that cowboy again, would you? In fact, you'd badmouth and blacklist him or her.
In the public sector however, although the same names have come up time and again in relation to high profile IT failures, European Union procurement and competition rules have meant that successive governments have been unable to put its suppliers on similar blacklists.
Getting tougher
But according to reports circling today, new rules are about to kick in that will in fact allow just that to happen. Whitehall officials will be able to explicitly exclude suppliers from the bidding process for any “significant or persistent deficiencies” in previous contracts, so long as these led to some formal sanctions such as termination, or damages claims.
Combine that with the fact that the current Cabinet Office regime has shown a fondness for demanding that IT and services providers put their houses in better order when dealing with government and all the ingredients are there for some interesting/difficult conversations going forward.
There have recently been signs that the present government is ready to get tougher with its suppliers. Outsourcing firms G4S and Serco have both hit the headlines of late for allegations of fraud and overcharging on a Ministry of Justice Custodial Services contract.
Often these things are sorted out in the shadows, out of the public glare despite such cases involving public money. The Home Office is currently engaged in a behind closed doors dispute with US firm Raytheon following that firm's dismissal from the e-Borders project, the subject this week of scathing criticism for its shortcomings.
Raytheon is suing the UK government for £500 million, a claim that is being heard in absolute secrecy at a private court for arbitration. The supplier's case is that the brief changed during the lifetime of the programme. For its part, the Home Office says it sacked Raytheon because it had no confidence in the supplier to address problems with the system.
In the case of Serco, there has already been some serious public sabre rattling going on at a very senior level. The Secretary of State for Justice Chris Grayling told MPs:
"It’s become very clear there has been a culture within parts of Serco that has been totally unacceptable, and actions which need to be investigated by the police.
"We have not seen evidence of systemic malpractice up to board level, but we have been clear with the company - unless it undertakes a rapid process of major change, and becomes completely open with government about the work it is doing for us, then it will not win public contracts in future.
"The taxpayer must know that their money is being properly used."
Let's leave aside Serco - which is now in the throes of a major review of its business practices under the auspices of Lord Gold in a bid to put its house visibly in order - and ask the wider question: will similar strong words in future be backed up with punitive action? Will public sector IT providers be held to genuine account and punished with loss of business if or when they screw up?
Well, speaking as a UK taxpayer who's watched far too much money poured down the drain over the years on abortive IT programmes, then I damn well hope they do.
But I was interested in the comments made by Georgina O'Toole of research firm TechMarketView who asks:
"Will this just be seen as yet another turn of events likely to make working with UK Government even harder? There are some contracts, particularly those involving core infrastructure or complex systems integration, which will always be most suited to the large SIs.
"Our concern is that the relationship between UK Government and the leading players appears to be getting more strained by the day."
I suspect O'Toole is quite correct. I also suspect that any 'strain' is long overdue in being introduced. But clearly there will be a need for fairness. This can't become a Daily Mail-style witch-hunt - burn the IT companies, burn them now!!!
It's suggested today that there would be a rehabilitation process for barred contractors to get back in the government's good books if they demonstrate they've paid their dues, coughed up on compensation and so on. That seems entirely fair, so long as it is policed properly.
I've watched too many senior civil servants answering to Parliament who have clearly 'gone native' and are acting as mouthpieces for the IT industry. And as a nation, we can't afford to be subsidising failure any longer.
(And just in case you're not from the UK and comforting yourself that it's a problem for the limeys to deal with, check this out from Sean Gallagher at ArsTechnica: Why US government IT fails so hard, so often.)