Ministry of Defence overhauls procurement strategy in £4bn IT project

The Ministry of Defence has revised its procurement procedures for a £4bn IT overhaul, in an effort to maintain strategic...

The Ministry of Defence has revised its procurement procedures for a £4bn IT overhaul, in an effort to maintain strategic advantage with suppliers and deliver value for money.

The 10-year Defence Information Infrastructure (DII) project is being described as one of the world's most difficult infrastructure projects and will provide IT support to about 300,000 MoD and military staff. It will also integrate more than 300 legacy systems.

But instead of awarding the contract for a full 10 years the MoD will split the project into three stages.

The eventual delivery partners will be selected on their ability to deliver the complete 10-year requirement, but the MoD will only initially commit to the first stage. Commitment to the second and third stages will depend on the contractors' performance, value for money delivered, and the MoD's needs.

The project will also be subject to the Government's Gateway Review for managing major projects.

Air Commodore David Rennison, a member of the team overseeing the 10-year Defence Information Infrastructure (DII) project, said the scheme would undergo a Gateway 2 Review later this year.

He said, "The Office of Government Commerce's Gateway 2 Review will be looking to see how we match up with common causes of failure."

The department will also test the programme against the National Audit Office's review of common causes of failure for IT projects, he added.

Yesterday (26 June) the government officially announced the four consortia bidding for the contract. Lockheed Martin, CSC, IBM and EDS are among the firms challenging to win the contract.

The consortia will be whittled down to three later this year and the contract will be awarded in the first quarter of 2005.

The MoD has a poor record of delivering complex technology projects. A report from the National Audit Office last December slammed the ministry for underestimating the risks involved in major projects and for time slippage in procurement programmes.

Shortlisted bidders

Atlas consortium: EDS, Fujitsu, Cogent, General Dynamics, LogicaCMG

IBM consortium: IBM, BAE Systems, Computacenter, Steria, NTL, Echelon

Lockheed Martin consortium: Lockheed Martin, Deloitte Consulting, Hewlett Packard, Qinetic, SAIC, Unysis

RaD11 consortium: CSC, BT, Thales e-security

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