Headlines: June 17th, 2002

Potential suppliers of IT systems to public bodies are to come under greater scrutiny at the initial evaluation stage. The Office for Government Commerce wants a more rigorous risk management approach to be adopted by clients to weed out companies who may have problems delivering the outputs required. This is part of the strategy to change the culture which in the past has often resulted in the award of a contract to the lowest bidder.The OGC has looked at the effect of supplier capability across projects and found that multi-national companies were sometimes not fully aware of commitments in the UK until the project was in difficulty. Frequently the caliber of the implementation teams was below what was needed. It also found that suppliers were often slow to recognize danger signals with the result that skilled resources were brought in too late. In some cases the initial penalty free operational period was treated as extra time to achieve levels of service rather than as a “safety net”.

The OGC wants the public sector to becomes much more skilled in risk management. Clients should question whether it is realistic to believe that the supplier can provide and maintain quality services for the quoted price. They should also consider whether the supplier can make an appropriate return. Clients also need to be able to assess the strengths and weaknesses of risk management systems in potential suppliers so that a robust integrated supply chain can be built between the public and private sectors and deeper partnership arrangements developed.