IT giants 'ripping off Whitehall', say MPs

http://www.bbc.co.uk/news/uk-politics-14314935

by anya • 15 years ago

31 22 15 years ago

bbc.co.uk

Government departments have been ripped off by a "cartel" of big IT firms, a damning report by a committee of MPs has found.

Jabbles• 15 years ago

I know of instances where personal data is "password protected" in an Excel file, saved to a memory stick and then couriered to the destination.

The lack of technical knowledge prevents people from seeing it as problem.

arethuza5• 15 years ago

I honestly don't know who is worse, the companies who manage to fleece the taxpayer this way or the idiots in the upper levels of the civil service who don't really care because "it's just taxpayers money".

ZoFreX3• 15 years ago

Or the people that deliberately organised purchasing things in a convoluted manner that channels taxpayer's money to a few preferred companies, in a manner that while increasing our actual debt, puts it on different books, so we don't look quite as in debt as we are.

gmac2• 15 years ago

In the UK, that would be PFI or PPP (Private Finance Initiative and Public-Private Partnership)? These are indeed a dog's dinner... for which we can blame only the people some of us elected.

gmac2• 15 years ago

I know which is worse: the companies. Because barring evidence to the contrary, I don't believe that these 'idiots in the upper levels of the civil service who don't really care because "it's just taxpayers money"' exist. I'm sure some of them are incompetent as regards IT, and that's a problem that needs addressing, but this sort of baseless castigation of public servants irritates the hell out of me.

arethuza5• 15 years ago

Unfortunately they really do exist - I've met some. I suspect this attitude is actually more prevalent amongst very senior civil servants (who are extrelemy elitist) rather than the rank and file.

quanticle• 15 years ago

Its not that they don't care. Its that they don't know any better. Look, these people are probably less tech-savvy than your parents. As far as they're concerned, those little boxes on or underneath their desks are magic. Now, given that, do you really expect them make informed and rational decisions about how much a computer should cost to install and maintain?

gaius3• 15 years ago

They are paid to care. That's their job. They are custodians of the public purse. We castigate irresponsible bankers - civil servants should not be excempt.

wisty3• 15 years ago

Government contracts - fixed price, big upfront design, and ever-shifting acceptance standards (which the contractor will not have any input into). A contractor has to charge 3-10X the price, just for the brain damaged way decisions are made.

mgkimsal• 15 years ago

Having done a bit of work for a state agency here, I have to say the "fixed price" aspect is the most frustrating. Having to estimate the needs/demands of a system 1-2 years ago, and budget for it today, then earmark all that money ahead of time... argh. It's a recipe for wasteful spending. Compared to "just in time" philosophies of only paying for what you need when you need it, current procurement and budgeting strategies almost demand wastefulness be an integral part of the process.

Combine this with a culture of "if you don't spend as much this year as you did last year, you won't get all of the money you request" and we're in a never-ending cycle of bad decisions.

_delirium• 15 years ago

The U.S. uses pay-as-you-incur-costs type billing for some large projects, exactly for that reason (hard to estimate up front, would have to overprice it due to the risk), but I'm not sure it reduces waste overall. It provides a different kind of incentive, since now companies like Lockheed have a monetary incentive to drag projects on for years, overstaff them, etc. At least with fixed-price billing they have an incentive to finish the project, since they aren't going to get more money by dragging it out longer.

wisty3• 15 years ago

The government loses a lot of money by being so incredibly tight-fisted.

All costs must be approved in advance, to ensure nothing is wasted. So nobody in government can run a small project, see how it works out, then scale up if needed. It's all-or-nothing.

Ironically, governments have less to lose if budgets go a little under or over - they get pretty cheap financing, and they are a big outfit who can absorb small variances within the system (as long as it's not systematic). If a small company has a project go over budget, it can kill them. But governments (who can afford the risk) pay extra for the surety.

gaius3• 15 years ago

Windfall tax on Accenture, EDS, IBM Global Services and all the rest. Claw back the tens of billions of British taxpayer's money they've squirreled away. Go after their shareholders too.

arethuza5• 15 years ago

How's this for a completely crazy idea - sack a few civil servents who have been responsible for creating and managing such spectacularly awful contracts?

I know that traditionally amateurism and incompetence haven't been seen as a barrier to a splendid career in the civil service, but maybe that should change?

gaius3• 15 years ago

That too! Accountability for decisions is anathema to the unions however. They will need to be broken first.

ZoFreX3• 15 years ago

"In its report, the public administration committee recommends that departments across Whitehall use more small and medium-sized IT suppliers to increase competition and bring down prices."

This is exactly what already happens, not that I think MPs know about it. I've personally worked on and even in some cases BUILT government websites, yet you won't find my name or my employer's (at the time) name on their books. They contract stuff out to the same companies again and again, ostensibly because they trust them / rely on them / any number of obviously not true reasons, and I don't think they realise that when they pay a big company £300,000 to make a website, they just turn around and sell it on to a small company who does it for £40,000.

I won't name websites or companies for obvious reasons, but those are quite close to actual numbers.

wisty3• 15 years ago

The big company probably eats the risk of the small company stuffing up, or the government changing requirements halfway through the project.

They also do all the unexciting tender work, certifications, negotiations, rainmaking, etc.

If a government employee asked a savvy web dev to scope out and implement a solution, it would be cheap. But they can't work that way. The project has to be specified upfront, in advance, because otherwise the government might get cheated by an unscrupulous developer. They would rather be sure they are getting cheated, that way there's no way they can be accused of favoritism.

pbhjpbhj• 15 years ago

>But they can't work that way. The project has to be specified upfront, in advance, because otherwise the government might get cheated by an unscrupulous developer

I don't understand what you're saying here. Are you saying the risk of losing a few £10k is worth paying a few £100k over the odds to avoid?

Surely the gov should be using their own web devs and having a consistent CMS used across all gov online estates. Yes there will be db integrations and things but a single shop of web dev working for the gov would surely save money.

They could get 3 whole websites and employ a 4th body to choose the best and still do it cheaper than hiring the big firm in the first place.

ZoFreX3• 15 years ago

> The big company probably eats the risk of the small company stuffing up

Completely the other way around, actually - our business relationship with the larger company was that we fixed their messes, some of which were gov contracts. Their sub-par developers would hack something together which eventually collapsed under its own weight, at which point they'd try to sell it anyway. If the client didn't accept it, we would then be brought in to close all the blocking bugs.

> or the government changing requirements halfway through the project

I don't think we were very insulated from this, but obviously by definition I can't tell you anything that we were shielded from!

IT giants 'ripping off Whitehall', say MPs

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