No competition on bids for project and supplier renegotiates deal twice

Plans for unified IT systems in magistrates’ courts date back to 1989 when the Home Office commissioned the Le Vay report which...

Plans for unified IT systems in magistrates’ courts date back to 1989 when the Home Office commissioned the Le Vay report which recommended that a common technology strategy be developed as quickly as possible.

This led to two failed attempts to supply national systems in the early 1990s.

In 1996 the Department for Constitutional Affairs decided to award a "Libra" contract based on the private finance initiative but by May 1998 received only one bid from Fujitsu after EDS pulled out.

Fujitsu raised its bid price of £146m by about 25% after being named preferred bidder and in December 1998 the department signed a deal with the company for 10.5 years at a price of £184m.

The contract was renegotiated twice: each time Fujitsu asked for more money. After the first re-negotiation which was completed in May 2000, ministers signed a revised contract for 14.5 years at a price of £319m. Within 10 months Fujitsu told the department it was in financial difficulties, even at the renegotiated price.

Talks with Fujitsu about continuing with the whole contract failed, and the department eventually reached agreement for Fujitsu to deliver only a technical infrastructure at a cost of £232m over 8.5 years.

The department signed a separate contract with STL Technologies to provide the core case management software. A systems integrator, Accenture, was also appointed, in October 2003, to roll out and run the core software. The total cost of the project is now estimated at £390m for just 8.5 years of service, rather than the original 10.5 years.

Edward Leigh, chairman of the House of Commons Public Accounts Committee, said Libra was "one of the worst PFI deals that we have seen".

He said the department had no real authority or control over the contract, ran a poor competition, attracting only one bidder, and it failed to take decisive action when Fujitsu did not deliver what was required. For its part, Fujitsu "did not understand the department’s requirements, took on excessive risk and under-priced its bid".

Leigh said the cost of the project has more than doubled and magistrates’ courts "still do not have the IT systems they need to manage their workload properly".

In a report in January 2003, the public spending watchdog the National Audit Office said the target date for unified administration of crown, magistrates’ and county courts is April 2005.

"The department considers that Libra is essential to the implementation of unified administration," the report said.

But Computer Weekly has learned that Libra is not due to be completed until the end of 2005 and the roll-out may extend to the end of March 2006. This will be 14 years after the first national implementation failed.

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