Rubbish government IT contract could have been one of many

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Sir Philip Green's report about government waste not unsurprisingly focussed quite a lot on IT.

With the government spending review around the corner the report outlined one particularly wasteful IT contract.

Here, in bold, is what he said about it:

"Six years remaining on a long term IT contract of more than £100m per annum

This is a contract for provision of hardware and software development. The principal contractor subcontracts the majority of work to another major supplier. Therefore there are two profit margins.

Work is charged for at a rate of more than £1,000 per person per day, which is well in excess of market rates.

It is a poor quality contract with no provision in the contract to reduce the annual amount payable should the development work not be required.

This contract includes services that are no longer required. There should have been an optional element written into the contract."

I was trying to find out which contract he is referring to. But the response I have been given by all my contacts so far is that "this could be one of many."

Anyone got any ideas or even a list of contracts that fit this description?


I'll happily produce shoddy work for £1000 a day!

Despite what the contract says it will have a change control provision and any contract manager worth his/her pay should be able to negotiate within the change control mechanism to change it:-
a) to remove from scope items not required,
b) to change the minimum contacted values.

It sounds like its an "unfair contract" in any case so might not be legally binding.

Reagrding the day rates it sounds like they are a flat rate in which case they are lucky the rates were not index linked as I've seen some contract awarded around the year 2000 with initially inflated Y2K rates increase over the years by as much as 40% from year on year indexation.

Also regarding day rates - have you seen any examples of "fair market price" clauses? I think these combine benchmarking with a price adjustment clause so that VFM is sustained...


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About this Entry

This page contains a single entry by Karl Flinders published on October 13, 2010 11:03 AM.

Microsoft is latest to sign MOU with government, but what is in it? was the previous entry in this blog.

Horror stories of government waste, MIPS , KIPS and MOPS. is the next entry in this blog.

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