Project managers in the public sector could learn lessons from the failures of the Libra office automation and case management project for magistrates' courts
Post mortems on the failure of the £390m Libra contract to deliver a unified case management system to magistrates' courts in England Wales have identified several key lessons.
They came to light as a result of investigations into the project by the public spending watchdog the National Audit Office and the House of Commons Public Accounts Committee, which were published in 2003.
Using the audit office's report as a starting point, the Public Accounts Committee interviewed Richard Christou, executive chairman of Fujitsu, and Hayden Phillips, the then head of the Department for Constitutional Affairs.
Computer Weekly has extracted four key lessons from the reports.
Standardised computer systems need standard business processes
Magistrates' courts across England and Wales are largely autonomous and many have their own way of doing things. But the NAO said the Department for Constitutional Affairs "sought automation as a priority before questioning the existing business processes".
In response the department said it recognised that development of best business processes should have come before seeking an IT solution. However, with legacy equipment in danger of failing, it was under pressure to deliver new systems.
Also, the department, like the NHS in its implementation of a £2.3bn IT-led modernisation programme, pointed out that it did not have the authority to impose business process change on the independent Magistrates' Courts Committees. And it was reluctant to attempt further major change while the committees were going through other reforms.
But putting IT before consideration of business processes made it "difficult to obtain a single view of IT requirements across the various committees and this contributed to the difficulties in developing the new system", according to the report of the Public Accounts Committee.
A supplier may so mistakenly under-price a contract that its future is later put in jeopardy
Christou told MPs that one of the lessons learned from Libra was that his company had mistakenly under-priced the contract.
"We accepted a contract which, with the benefit of hindsight, was under-priced," he said.
He went on to tell the Public Accounts Committee that the supplier's future would have been threatened if it had delivered the original contract without revision. "The issue was that for us to finish this contract as it stood it would have seriously jeopardised the existence of the company," said Christou.
When MPs said that Fujitsu's future was its own affair, Christou replied, "If, in the end, many IT suppliers suffer these sorts of things, then the supply of IT contracts for government will no longer exist, so we had to find a way through this. This is a serious issue."
Revising a contract time repeatedly - at the supplier's request - may be less disruptive than cancelling it
Phillips, then head of the department, told MPs that renegotiation was the least worst option because "the consequences of termination, of delay, of re-procurement, of loss of service to magistrates' courts and the cost of litigation itself, had to be balanced against the opportunity that we could get if we could renegotiate satisfactory terms, and we believe we did that in 2000 and again in 2002".
There must be a rigorous process of accountability
The full facts about why Libra's costs had soared have been difficult to come by, even for members of the Public Accounts Committee whose job is to police departmental spending.
Computer Weekly has argued that such large gaps in information could be bridged if the recommendations of its Shaking Up Government IT campaign were put into action.
The campaign calls for independent Gateway reviews on the progress or otherwise of IT projects to be published, and a statutory framework specifically for the public sector, which would enshrine good practice in law and improve accountability.
When Richard Bacon, a member of the Public Accounts Committee, asked repeatedly for a full breakdown of the £232m which was due to be paid to Fujitsu for Libra's office automation systems, the department referred him to the supplier.
Fujitsu provided a high-level breakdown of its estimate but Bacon did not get specific answers to his further questions.
The department gave Bacon a copy of a report on Libra written by independent analyst Gartner but this too did not give the specific information he sought.
Another member of the committee, David Rendel, wanted a Gateway review into the Libra contract to be published but senior civil servants refused. They gave two reasons: possible harm to Fujitsu because of what the review said about the supplier, and possible harm to the department's negotiating position.
Rendel said in response, "I am not sure of the relevance of why we should not be granted something which could be harmful to Fujitsu. We are, after all, in the business of supporting not Fujitsu but the public interest.
"And even if it was relevant at the time, it is clearly not relevant now because the negotiations have finished."
Weaknesses in accountability do not end there. The department decided in February 2002 not to proceed with Fujitsu's contractual commitment to deliver core case management software for Libra.
Three months later, in June 2002, the Public Accounts Committee asked a senior official at the department for confirmation that it was not proceeding with the core software. He denied this was case. When questioned in 2003 on whether he had misled the committee, the official said he had not wanted to jeopardise negotiations with Fujitsu, which, in June 2002, were at a sensitive stage.
The Public Accounts Committee concluded that the official could have handled the situation differently by, for example, presenting information to the committee in confidence. It said the official had "expressed regret at giving incorrect information and emphasised that he had not deliberately sought to mislead the committee".
But this was not the first time that a Commons committee has been given incorrect information about an IT project.
A trade and industry committee was told in November 1998 that the Pathway project for a benefits card was on course just months before the scheme was cancelled.
MPs on the transport subcommittee were told in December 1999 that a system from supplier EDS for an Oceanic air traffic control in Scotland was a model development when officials were, in fact, considering cancelling the contract.
Libra's 12 years of delays and excuses
- 1992 A contract for national caseworking software, to replace incompatible systems in use in magistrates' courts, fails. The Lord Chancellor's Department takes legal action against the supplier Price Waterhouse
- 1993 The department begins an in-house project using Admiral and FI Group, but this fails too. The department pays out £6.8m
- 1995 PricewaterhouseCoopers agrees to pay the department £1.3m but it is unclear who pays the legal costs
- 1996 The department launches Libra, its third attempt to introduce national systems for magistrates' courts
- May 1998 EDS withdraws from the bidding leaving only ICL, now called Fujitsu, which submits a tender for £146m
- October 1998 Fujitsu increases bid price to £184m
- December 1998 The department awards Fujitsu a 10-year contract for £184m
- October 1999 Fujitsu seeks to renegotiate the contract as it forecasts a loss of £39m over the life of the deal
- May 2000 The department signs a revised deal for Libra. The contract is now for 14.5 years and is worth £319m
- June 2001 While rolling out networked office automation systems to the courts, Fujitsu tells the department it cannot continue with the contract unless it is substantially revised
- September 2001 Fujitsu threatens to repudiate the contract unless the department agrees to cover its losses which are now estimated at £200m
- February 2002 The department decides not to proceed with the core case management software from Fujitsu
- July 2002 A revised contract is signed with Fujitsu for £232m over 8.5 years to supply only the infrastructure element of Libra
- 2003 STL Technologies agrees to supply Libra's core management system. A further contract is signed with Accenture to roll out STL's software in court rooms and offices. The cost of the contract is put at £390m
- 2003 The National Audit Office says Libra from STL and Accenture is "essential" to a plan to unify the administration of crown, county and magistrates' courts in April 2005
- September 2004 A leaked document reveals that the Department for Constitutional Affairs is concerned about software errors, fit for purpose issues, revising the roll-out timetable and "performance issues" despite a tenfold improvement. The implementation is due to be completed in early 2006.
Learning lessons of Libra's history>>
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