ID card new contracts - genuinely innovative?


On 9 August 2007, BBC Radio 4’s The World Tonight posed the question on ID cards ‘can this project come in on time and under budget’ on the day that the government invited companies to bid for the project contracts, worth £2bn.

On the programme I pointed out that James Hall, the experienced Chief Executive of the Identity and Passport Service, has been innovative in the design of the contracts.

Four, five or six main suppliers will be appointed. One, for example, will have the job of designing, building and running biometric systems. Suppliers will not pass automatically from one phase of a project to the next unless they have met the technical specification and have shown they can work well with each other – for example by not blaming each other when something goes wrong.

If a supplier is found to have misbehaved – by putting its own interests above those of the project – the next phase may be subjected to a new mini-competition between the main suppliers.

It’s a good idea because a supplier can be stopped from entering the next phase of its 10-year contract without officials having to accuse the company of a breach of contract, which would have awkward legal ramifications because the supplier may then accuse the Identity and Passport Service of failing to carry out its obligations.

Nor would officials need to invoke “convenience” clauses in the contracts – where the government ends a contract early for its own convenience and compensates the supplier for its costs and loss of projected profits.

The biggest weakness in this contractual innovation, however, is the lack of built-in transparency. So, in my view, nothing much will change.

This is because lawyers can write into contracts the most innovative and sensible clauses but the Identity and Passport Service cannot dispense with suppliers without the approval of ministers. Being politicians and not project managers, ministers will do almost anything to avoid giving the impression that an IT-based programme is in trouble. So they will not want to replace a major supplier unless forced to do so by circumstances.

When two major suppliers left the NHS’s National Programme for IT – Accenture and IDX – it was their decision, not the government’s.

The proposed contract innovations at the Identity and Passport Service could work if ministers ever decided to put honesty and openness over short-term political interests – which would be the biggest genuine innovation in the administration of government for decades. This would give the ID cards scheme the best possible start.

Thus, if a supplier performed badly on the ID cards project, it could be replaced in a mini-competition, without ministers intervening to pre-empt bad publicity.

This is being idealistic of course. In practice the government will do all it can, it seems, to keep every door shut on how its IT-based projects are really progressing or not.

Indeed the government is going to the High Court to try and ensure that the results of early gateway reviews on ID cards are not published. With ministers anxious to avoid well-founded bad publicity over ID cards, it’s unlikely in practice that any of the scheme’s suppliers will be replaced, even if they are misbehaving or performing poorly.


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