Taking action against the "abusive" IT provider

Profile picture for user slauchlan By Stuart Lauchlan January 26, 2014
Summary:
Some IT suppliers to government are accused of “appalling” behaviour and conducting an “abusive” relationship with their public sector paymasters. Them’s fighting words from a senior government official.

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There comes a time to speak out - and it seems that in UK government circles that time was last Friday!

That was when the civil servant in charge of government procurement Bill Crothers accused some IT suppliers to government of “appalling” behaviour and of conducting what he called an “abusive” relationship with their public sector paymasters.

Them’s fighting words! A few months back Tim Gregory, the man put in charge of CGI’s UK operations, made a rather foolish comment to Computerworld UK’s Derek Du Preez - our new diginomica team member - in which he made the allegation:

“You’ll be aware that the government is making life difficult for IT vendors. I find this adversarial approach quite unhealthy.”

This was not a remark that gained Gregory much sympathy, such is the antipathy towards what the current UK government describes scathingly as the ‘oligopoly’ – by which it means the large systems integrators and the like – which has dominated the public sector IT landscape for so long.

That word - oligopoly - cropped again on Friday when in an interview with the BBC, Crothers spoke of some IT providers “monopolistic” behaviour:

"This is about the oligopoly: the cluster of big suppliers who have had it too good for too long. It's reflective of a monopolistic or oligopolistic behaviour.

“It is not acting as if they're hungry and in a competitive environment. That's appalling."

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Bill Crothers

The occasion of his talking to the BBC was the publication by the UK government’s Cabinet Office of new rules to limit the size and the duration of IT contracts with government.

  • No IT contracts will be allowed to exceed £100 million in value, unless there is an exceptional reason to make them larger.
  • Government IT contracts will no longer be automatically extended.
  • New contracts for web hosting will not last for more than two years.

Minister for the Cabinet Office Francis Maude said:

“Big IT and big failure have stalked government for too long; that is why this government is radically rethinking the way it does business. We are creating a more competitive and open market for technology that opens up opportunity for big and small firms.

“These red lines will ensure the government gets the best technology at the best price and we will be unashamedly militant about enforcing them to provide value for hard-working taxpayers.”

He was backed up by Liam Maxwell, Chief Technology Officer who said:

“To create the efficient and responsive services that the public demands, government must have access to the most innovative, most cost-effective digital solutions. That means going to the widest range of suppliers, and giving ourselves every opportunity to renegotiate and reassess contacts.

“It rarely makes sense to simply extend a contract based on yesterday’s technology and prices and these red lines make clear that we are doing business in a different way.”

Wider picture 

Crothers position as Chief Procurement Officer for the UK government has put him on the front line of a drive to overhaul purchasing practices that has, according to the Cabinet Office, already cut the amount of time it takes to complete public procurements in the UK by 40% to “around 100 working days”.

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Liam Maxwell

That’s less time than other European Union economies, such as France and Germany where the numbers stand at 133 and 121 days respectively.

Back in July 2013, the situation was rather different with UK public procurements taking 50% longer than France or Germany.

The UK Government Procurement Service has also been pushing for a wider overhaul of EU Procurement Directives in general and earlier this month the Cabinet Office took the credit for some UK-driven changes on that front. These included

  • Help for mutuals: In the UK, some 80 mutuals deliver over £1 billion of public services, but the Cabinet Office wants to see a lot more activity from the sector. To that end, changes to existing EU regulations now mean that contracts can be reserved from mutuals instead of being exposed to full open competition.
  • A boost for small and medium enterprises (SMEs) by encouraging buyers to break large contracts into smaller lots and capping turnover requirements for businesses. It’s hoped that simpler processes will save SMEs up to 60% of bidding process costs,
  • Reduced red tape with only winning tenders being required to provide supporting paperwork, and more appropriate time scales in which suppliers have to respond to tenders.
  • Better supplier management allowing government buyers to exclude suppliers from a procurement procedure not only because of grave professional misconduct as well as significant or persistent poor performance.

That last point has been long regarded as an essential development in reforming procurement to break the cycle of suppliers failing to deliver results but still be appointed to new public sector contracts without significant penalty.

Verdict

Well said Bill!

While we’re not in the game of encouraging a ‘suppliers always bad’ mentality - far from it - it’s undoubtedly the case that across governments worldwide, a select group of providers has had an essentially easy time of it when it comes to bidding for major business.

Anything that can be done to enforce additional competition is only to be welcomed, while the necessary inclusion of a bit more ‘big stick’ is long overdue.

But there’s more to it than just waving some new rules around. There needs to be a root and branch culture change across government to break decision makers of their ‘addiction’ to the same old faces as their default choice.

And when it comes to penalising the ‘guilty’, it shouldn’t just be the suppliers who are on the receiving end. Those in government who fail to instigate and manage taxpayer funded ICT programmes in an appropriate and professional manner also need to be named and shamed.

Ironically as Crothers was making his comments on Friday, officials at the UK’s Department for Work and Pensions - custodians of what is currently the biggest ICT debacle in the UK public sector, Universal Credit (UC) - were refusing to disclose documents detailing the performance of key IT suppliers to the programme.

Regular readers will recall that UC has already written off £40 million of the work with a further £90m set to be scrapped before the welfare reform programme goes live.

Officials told Computer Weekly that the reports - which were in large part prepared on a self-assessment basis by the suppliers themselves - were:

“designed to consider the state of readiness and worst-case scenarios; they did not present a balanced picture of the programme for public consumption.

“Publication of these [reports] would be likely to have a damaging effect on the thoroughness of such reviews in future and their ability to provide a comprehensive and reliable assessment of risk.”

The fact that publication of these reports might also cast an uncomfortable spotlight on some tough questions about the project management of the entire programme by responsible government officials is of course entirely co-incidental.