Government IT contracts ‘need to be clearer’ to improve procurement

Clearly-defined Service Level Agreements (SLAs) need to be in place from the start of contracts before the government can publicly name underperforming IT suppliers

Published in Computerworld UK

Advice follows defence secretary Liam Fox’s plans to publish lists of over-budget projects.

Clearly-defined Service Level Agreements (SLAs) need to be in place from the start of contracts before the government can publicly name underperforming IT suppliers, according to industry experts.

Defence secretary Liam Fox recently told the Financial Times of his plans to better control the Ministry of Defence’s (MoD) procurement budget, which included publishing a quarterly list of “projects of concern” that are running over cost or budget. This is in addition to creating of a Major Projects Review Board to ensure the department’s 20 largest projects are on time and within budget.

“Why could companies want to keep information about potentially failing contracts from their own shareholders? It’s time we opened this up,” Dr Fox told the newspaper.

Dr Fox’s planned measures have clear implications for IT suppliers, as well as others that provide services to government. Tola Sargeant, research director at analyst house TechMarketView, believes that other departments may well follow suit.

“It’s all about transparency, to show value for money,” she said.

However, the initial action for this kind of exercise must be to clearly define contracts and SLA agreements, said Ken Ume, consulting director at business IT advisory company ImprovIT.

“The difficulty is, for example, if the SLA is being met but the SLA is poorly defined. “So the starting point is to come up with a set of standards for SLA on both sides [customers and supplier]. It is only going to be of value if everyone has a chance of avoiding being on the list, and if they’re on the list, they deserve to be there,” Ume said.

Sargeant agreed, but added that other factors, outside of the supplier’s control, are considered.

“It’s important that the SLAs are carefully-defined tracked, that they’re as transparent as possible, measured against, and that other factors are taken into account.

“For example, with the National Programme for IT, changes that the government was after were really outside the control of the IT supplier, but would have had a significant impact on the SLAs,” she said.

An example is the Choose and Book project, which was originally meant to be a simple booking system, which the government suddenly decided should also give patients choice. Although the suppliers in this case were able to deliver the project, Sargeant said that the level of take-up was lower than expected because of the way it had been implemented.

In general, Sargeant said that there was a trend towards more outcome-based contracts within government, which tend to be longer term.

“If the targets are carefully chosen and outcome-based then that would be good. [Government departments have to ask themselves] is it important to have a system that delivers on time, or delivers more or less on time but also delivers more business benefits?” she said.

Both Ume and Sargeant believe that government departments should look to benchmark more, in order to appropriately define their contracts.

Ume added: “Government departments need to understand what’s worked elsewhere. It’s not good enough just to talk to other people because it needs an objective assessment. They could research, or create communities with similar goals so that they can share experiences.

”However, Sargeant also said that benchmarking is not done much at the moment because it can be difficult to find comparable organisations.

Meanwhile, Andrea Tucker, head of defence and security programmes at IT industry body Intellect, supported the measure announced by Dr Fox.

“It is important that from the outset of a project that both sides are clear about the budget, as well as the aims, objectives and deliverables, and there is transparency during the lifetime of the project,” she said.

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