Feeds

Blighty slaps £100m spending cap on govt IT projects

MPs fed up of blowing millions on crap contracts

The Power of One Infographic

The coalition's election pledge to cap IT contracts at £100m will become official policy from next month.

A procurement policy notice released by the Cabinet Office sets 1 April as the deadline when the cap will come into force for central government departments, their agencies and non-departmental public bodies.

The £100m limit is being introduced as the "government wishes to reduce significantly the delivery risk of very high value projects which use ICT to deliver their business objectives and also to achieve better value for money overall from its investment in those projects", according to the notice.

The cap will apply to all IT contracts, projects, frameworks and call offs within those frameworks, the Cabinet Office says, and in future, all contracts will need to be designed with the £100m limit in mind.

The policy notice doesn't spell the end of large IT projects, however; IT projects will be allowed to exceed £100m on the grounds of national security or to ensure the continuity of a critical government service.

Projects will also be allowed to exceed £100m where "a strong case can be made that doing so increases the overall cost to the taxpayer, notably increases the risk of failure or increases the security threat to the public body or government as a whole", the notice says.

Whitehall will be expected to achieve the new upper limit for IT contracts by:

  • Encouraging the reuse of existing assets.
  • Making changes to procurement such as the application of lean methodology to buying.
  • Greater competition among suppliers including through the increased use of SMEs.
  • Creating contracts differently, for example, by reducing their length for or separating out commodity hardware from a new project and purchasing it through an existing contract, or separating out telecoms needs and buying them through the PSN frameworks.

Capping the cost of projects will lead to a greater number of suppliers being used for government IT work and more contracts awarded to individual companies rather than consortiums, the notice says.

However, it acknowledges potential problems with the new model, including a potential reduction in economies of scale and issues with staff until the system is bedded in.

There could be "a shortage of public sector capability in the range of expertise required to deliver this new approach that could lead to project failures" and "a potential risk that departments may choose to use a number of suppliers to mask the overall cost of a project", the notice says.

This article was originally published at Guardian Government Computing.

Guardian Government Computing is a business division of Guardian Professional, and covers the latest news and analysis of public sector technology. For updates on public sector IT, join the Government Computing Network here.

HP ProLiant Gen8: Integrated lifecycle automation

More from The Register

next story
Yorkshire cops fail to grasp principle behind BT Fon Wi-Fi network
'Prevent people that are passing by to hook up to your network', pleads plod
UK government officially adopts Open Document Format
Microsoft insurgency fails, earns snarky remark from UK digital services head
Major problems beset UK ISP filth filters: But it's OK, nobody uses them
It's almost as though pr0n was actually rather popular
HP, Microsoft prove it again: Big Business doesn't create jobs
SMEs get lip service - what they need is dinner at the Club
ITC: Seagate and LSI can infringe Realtek patents because Realtek isn't in the US
Land of the (get off scot) free, when it's a foreign owner
MPs wave through Blighty's 'EMERGENCY' surveillance laws
Only 49 politcos voted against DRIP bill
Help yourself to anyone's photos FOR FREE, suggests UK.gov
Copyright law reforms will keep m'learned friends busy
EU's top data cops to meet Google, Microsoft et al over 'right to be forgotten'
Plan to hammer out 'coherent' guidelines. Good luck chaps!
prev story

Whitepapers

Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Reducing security risks from open source software
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.