IBM, the world's largest IT
company, has sought to stop
Somerset County
Council from divulging key contract details of a
£400m outsourcing contract.
The council is obliged under the Audit Commission Act to
disclose accounts information from the last financial year
including contracts, invoices, receipts, and other information to
local electors or anyone paying business rates in the area.
But IBM is attempting to prevent the council disclosing full
information about its £400m contract, following requests for
details about the deal by journalists at broadcaster ITV West.
The contract, the first of its type, brings together two public
authorities and a police force into a "strategic partnership"
organisation, which delivers IT, finance, HR, property procurement
and customer contract centres.
IBM is the majority shareholder of the organisation, dubbed
South West One, which was formed when Somerset County Council,
Taunton Deane Borough
Council and
Avon and Somerset
Constabulary signed the contract in September last year.
But the council said that "very late in the day" it received a
request from IBM and SouthWest One for material from the contract
to be treated as confidential.
Excessive secrecy
IBM's approach to the council is likely to renew criticisms of
excessive secrecy over the deal. The MP for Bridgwater,
Conservative Ian Liddell- Grainger, told Parliament in March 2008:
"SouthWest One is an outfit born in secrecy and reliant on
secrecy."
There was an "unprecedented level of commercial confidentiality"
during the procurement, according to a report by Dexter Whitfield,
director and professor at the European Services Strategy Unit, for
trade union Unison.
The council had planned to give a copy of the IBM contract to
journalists at ITV West, based in Bristol, who have been
investigating SouthWest One for several months. But the council
withheld the information from them in line with IBM's request.
ITV West says it will go to court if its access to the documents
continues to be denied.
Somerset said it was obtaining its own legal advice "as quickly
as possible" on whether to release the information. A council
spokesman told Computer Weekly that if it wrongfully discloses the
information it may face legal action from IBM.
But any such action by IBM would be highly unusual - because the
supplier is a partner of Somerset County Council in the SouthWest
One joint venture.
Disclosure
ITV West had sought the disclosure of the contracts under the
Audit Commission Act which is more powerful than the Freedom of
Information Act. It requires councils to let local electors see
contracts, invoices, receipts, books and bills that relate to the
accounts of the recent financial year.
The withheld information includes payment arrangements, the
service credit mechanism, the financial model, and the Joint
Venture Agreement between IBM and the three public authorities.
An IBM spokesman said: "It is IBM policy not to comment on
client specifics."
Critics of the deal including some local councillors are
concerned the deal will fail and they want genuinely independent
advice on whether it's too risky.
Somerset officials hope the contract will save about £200m -
about half the total cost. They also hope the savings will fund a
SAP-based CRM project which is due to be rolled out across the
police and the two local councils.
ITV West's "West Eye View" is due broadcast a half-hour
documentary, "Public Money Private Gain", on the IBM deal on
Thursday at 7.30pm.
Tony
Collins' IT projects blog >>