Contract too tight for changes

A report by public spending watchdog the National Audit Office (NAO) has found that the Inland Revenue was effectively locked...

A report by public spending watchdog the National Audit Office (NAO) has found that the Inland Revenue was effectively locked into a major outsourcing contract with Accenture (formerly Andersen Consulting) when it needed to quickly change systems to support new legislation.

The problems arose when changes needed to be made to Accenture's new National Insurance Recording System (Nirs2) to support legislation in 1998 for stakeholder pensions and pension sharing on divorce.

The NAO report found that, after years of delays and problems, Nirs2 was a success and exceeded the expectations of users but there was in effect no choice but to give Accenture the extra work on enhancing the system to support changes in the legislation.

"The original Nirs2 contract proved insufficiently flexible in catering for the significant legislative changes proposed in 1998," said the report, published this week.

The extra IT work added up to £144m to the original Nirs2 contract value of between £45m and £76m.

If the Revenue had wanted to give the work to another supplier it would have had to exercise a break option in the contract and re-compete the existing and new Nirs2 work.

This exercise alone would have cost an extra £44m, effectively ruling out any choice of contractors.

Full report: www.nao.gov.uk/

Read more on IT legislation and regulation

Start the conversation

Send me notifications when other members comment.

Please create a username to comment.

-ADS BY GOOGLE

SearchCIO

SearchSecurity

SearchNetworking

SearchDataCenter

SearchDataManagement

Close