After the latest debacle with another private company spectacularly failing to deliver on a public sector contract, yet still ending up trousering all the money, and skipping off into the sunset kicking their heels… who actually negotiates these big public sector contracts?

Is it individual Whitehall departments? Or outside consultants? Martin O Neill? Or, as I suspect, the work experience kid, in between doing the photocopying, and making the brews?

And is anyone ever held accountable? It just seems that us taxpayers get constantly stitched up in the deal, by really badly negotiated contracts that seem to contain no penalties for non-delivery, lateness etc. Its always the same. So who’s fault is it?

It would be the brightest and best graduates, but they all get bought up by the companies providing the services and the civil service (who negotiate the government side) has to make do with 2nd rate, over worked, under paid staff who have all their work meddled with and their decisions over ruled by ministers…

The Skye bridge is a great case in point….

Annoys the sh*t out of me, but to be honest, I see it all the time in the private sector too. Companies that are 2% technical ability and 98% contract lawyers!

A cynic would suggest that the people negotiating the contracts are the same people who, right after leaving their cabinet/MP position, find themselves on the boards of G4S, Atos, Circle Health and other private ‘public service providers’.

:lol:”Normally” contracts are pulled together by large Audit/Accountancy firms on behalf of Govt. Not sure about this particular one but would have expected it to be similar.

Big money in Govt contracts and very technical in scope so expect lots of clauses and overlaps in place with big retentions and default payments.

But I say good on Raython for chasing this one down, invariably it’s the Govt who screw up with sucessive changes in policy and department mergers and the like.
£50m in fine too !! Makes it worth turning up then getting the contract terminated, probably a good % of the profit they would have made I susspect. 😆

my mate got a job as an IT troubleshooter for the DWP just after the new government got in, he was shocked at what he saw, he didnt stay there long as nothing seemed to be changing

the big IT firms ran rings around the civil servants insisting on clauses that let them get away with anything, plus they have the lawyers to ensure it goes their way

the other problem is that electorate pandering policy determines outcomes and importantly timescales that are often impossible to achieve

That’s not government money, it’s our money. £50m which could have built or refurbished a hospital or paid a shedload of nurses. All because some snotnose didn’t dot the frickin I’s they were paid to dot.

^^ wrecker, totally agree, wasted money. 😕

I think the people responsible claim they were on holiday for 2 weeks whilst the contracts are finalised.
No one knows who signed it off.. Everybody shrugs their shoulders and nobody gets disciplined.
Standard procedure.

When I worked for a large civils contractor I was always amazed by the levels of incompetence and naivety when it came to contractual/commercial awareness whenever I was working with councils. Being an honest sort of bloke, I never took advantage of it, but it would have been so easy to have gone the other way. This tended to happen more often where the council staff involved had only ever worked at said council, so either had little experience of the ‘real world’ or were just doing as they’d always done.

I spent wasted two years of my life not quite doing a migration for the DoCA around 2005 (who outsourced IT to us). Could we heck get any one of the overpaid, feckless, cord-attired committee-centric imbeciles that made up their management to make a single decision on anything? Even agreeing a naming convention took months. Eventually we got to run everything up, deployed all the new server infrastructure and piloted the migration to about 100 VIPs who were all very pleased. They then decided that they’d run out of time & canned the whole thing.

A few years later I happened to be in a customer meeting with the new incumbent outsourcer. They were in exactly the same position that we’d gotten to years earlier & still they couldn’t make progress.

who actually negotiates these big public sector contracts?

Well, the Govt have a procedure for inviting bids for these things. The companies make promises in the bids, some of which may not be reasonable or at least highly optimistic, but they generally make sure their arses are covered, as kimbers says.

The bottom line is this: Government agencies are generally staffed by people who joined 20 years ago straight out of uni looking for a nice safe easy job. They know how passport applications work or company legislation, but not much else. And they know naff all about IT. So they say ‘we want X and Y’ without really understanding the implications, or having any idea if X and Y are going to be any good. The IT companies then have their salespeople bid for the contracts with the ‘customer is always right’ attitude so they say yes to everything, on any timescale.

Then when it comes to implement it, you have actual techies trying to extract proper information from the fairly clueless low level agency staff and finding it rather hard, because the staff don’t understand IT. But the IT people can’t push back and sort the problems out because the high level people have already signed off the requirements that turn out to be unworkable due to either timescales or lack of insight and information. The people higher up the management chain don’t understand what the issue is, why can’t these idiot techies just DO IT? They then generally cover up the problems on the assumption they can be solved, and report up to their bosses that things are ok.

Basically. the problem is lack of understanding of the system and requirements by the agencies themselves, and the IT companies are generally happy to do the work because their arses are covered and they can pin the blame on the agencies.

This is really PPP of course at it’s worst, but since it’s been this way for a long time no-one’s bothered about it as they are for stuff like the NHS. What the UK really needs is a Government IT agency to bring everything in-house. At least then it’d have expertise to be able to figure out what it needs and move forwards, and the long term IT resources to be able to develop the solutions.

An example of the kind of short sighted attitude from agencies: Years ago, to make changes to your registered company, you had to send in forms. The legislation was recently overhauled with new forms, and a new system built at great length and expense from scratch for processing forms. Why? Why use forms at all? Why can’t I log onto a webpage and simply edit the details directly? It’d have been vastly quicker and easier to implement, and better to use too. But goverment agencies process forms, that’s what they do.

Note that this rant is not about any project in particular, just in case anyone’s snooping around.

I worked for a large engineering consultancy and we had a job employed by the SPV on a PPP/PFI project who were using us/our reports to run rings around their government liaisons. It was men vs boys in those meetings, the slick SPV mopped the floor with them.

wrecker – Member
That’s not government money, it’s our money. £50m which could have built or refurbished a hospital..

+1

And were there not laws about working for private enterprise in a field you were employed in by the govt for a certain period after separation?

In answer to the OP, it is usually on a department by department basis. There are some central procurement functions – which this government has sought to push harder, but it’s fair to say that they have their flaws.

The way each department goes about “buying stuff” varies, but they are all bound by UK public procurement legislation – which mirror EU procurement directives. Deeply boring stuff, and the butt of a lot of criticism, but for the most part, the legislation promotes good practices – its aim is to ensure fair and open competition (including to countries in the EU) and also that the resulting contract is the most economically advantageous (i.e. our money is being spent well).

Generally good stuff so far. My experience of a few government departments has been mixed. Some procurement teams are knowledgeable and passionate professionals. Others… are not. The vast majority of government contracts (in my particular area)that I have seen let have been successful though – they tend not to make the news, however.

The is no one single reason why some contracts fail but penalties etc are incredibly hard to enforce via contract law. Poor performance can be taken into account when awarding future work, but it is difficult for departments to do this and stay on side with the purchasing legislation… and ultimately for many contracts they fishing in a realtively small pool of suppliers. Many of whom have more money to throw at lawyers than the government departments can afford.

Worked for a big Gov dept that signed a contract that allowed a big IT company to have ‘up to 250’ programmers on site. There was work for approx 10 developers, and the other 240 were brought in and basically told to pretend to work…

None of this is exclusive to the public sector.

I worked for a large engineering consultancy and we had a job employed by the SPV on a PPP/PFI project who were using us/our reports to run rings around their government liaisons. It was men vs boys in those meetings, the slick SPV mopped the floor with them.

Depends on the client. Some sit trying to read the contract upside down and then wonder why they don’t seem to be able to control the SPV, others make every single day a living nightmare for the SPV with no reason other than they’ve been told to do so to try and save some money.

The problem we have in the UK is that the client EXPECTS to be screwed over by the contractor (despite the transparency we have, most clients still think there are hidden profits being made everywhere and the contractor is getting rich), so they approach the management of contracts with that attitude. Not great for building a 25/30 year relationship.

This problem is at its worst in the UK.

Add in clients who don’t know what they want or what the market can offer, but still feel comfortable spending 2 years putting together a competition for something the market doesn’t think is workable or can be done for much cheaper another way. Then throw in some advisers who just base this deal on the last one they did where no one died. Then add a few contractors who’ve been stung time and time again on lengthy and expensive competitions, only to invest another two years and £10m to lose yet another deal because what the client want’s isn’t achievable.

A while back, after a big (billions) competition had been launched following a few years in development, it transpired that the technology that they needed to meet the things they had promised voters/tax payers that this project would deliver, didn’t actually exist yet and probably wouldn’t in our lifetime 🙂

The is no one single reason why some contracts fail but penalties etc are incredibly hard to enforce via contract law.

If by penalties you mean performance related deductions, it really couldn’t be easier.

Any provision in a contract which imposes a penalty has always been prohibited, so its no wonder they are hard to enforce 😉

peterfile – West Coast Mainline by any chance?

(just nod or shake your head)

Nope.

Rail deals are normally a farce in the UK though (they are pretty complicated as far as PPP deals go mind you), i’ve done half a dozen rolling stock ones and a heap of infrastructure ones and I honestly can’t think of a single one where I didn’t want to do a Falling Down 🙂

In the NHS it work like this.

Managers with an understanding of their service tender out for a contract. Before they do that they have to get legal advice as the NHS can not afford in house lawyers.

People bid for the contracts. Contracted awarded and lawyers brought in again to firm up the contract before signing.

Contractor throws spanner in the works ie contract variation. Back to the lawyers more cost, more delay as people are dying (ok slight exageration). Either have to throw contract out and start full tender process again. At even more cost to the NHS.

Contract starts with clause that makes it financially cripling for the NHS.

So in essence its private companies that exploit and **** up government contracts. I have never known a private company who doesnt see government contracts as an easy win.

Thats fine but dont moan when things like this happen 🙂

So in essence its private companies that exploit and **** up government contracts. I have never known a private company who doesnt see government contracts as an easy win.

🙂

The problem we have in the UK is that the client EXPECTS to be screwed over by the contractor (despite the transparency we have, most clients still think there are hidden profits being made everywhere and the contractor is getting rich), so they approach the management of contracts with that attitude. Not great for building a 25/30 year relationship.

See?

Classic government nonsense this. Labour sign a contract for a system which it turns out doesn’t work, Tories come in and cancel it (probably reasonably) but without following the correct procedure.

Who wants to take responcibility for a contract, no one ? Not civil servants or the consultants or the politicians but the fact is they all have a hand in it. A dogs breakfast.

A friend of mine had an IT company which worked on a big government contract, when it was cancelled it basically bankrupted his firm. Another form working in the same project made out like bandits as they had a clause which meant they where due payment in full anyway. You can put that sort of stuff into government contracts as they are not paying attention/don’t have the expertise.

If by penalties you mean performance related deductions, it really couldn’t be easier.

Any provision in a contract which imposes a penalty has always been prohibited under law, so its no wonder they are hard to enforce

Exactly 🙂 And I don’t mean performance related deductions. It’s amazing how many people still insist they want penalities in their contracts – and how many you see referred to in other (non-govt) contracts, even though they are obviously unenforceable.

My background is infrastructure construction, but have had sight (although no direct involvement in) of other contracts across IT etc…

Interesting that the same stories are coming up in this thread regardless of industry sector!

I’ve worked for a few of these large IT companies, and some are absolute sharks, and some are actually committed to the client.

If you knew the margins made by the private second on public infrastructure deals you’d be surprised. It’s hugely unprofitable compared to private sector work. Most do it because although it’s relatively poorly paid, it’s a “guaranteed” income stream for medium/long term from a client who is financially secure.

The “golden age” where contractors made big money out of PPP has long gone, but the memory and legacy of that era is still kicking around.

There’s still good money to be made in some sectors (tech and waste spring to mind at the moment), but they will follow suit soon enough.

Costs of borrowing since 2008 hasn’t helped, banks offer shit rates which makes projects more expensive and less profitable.

I am an ex public sector procurement person and the truth is that in my old department there was a good team led by a moron. Any contract with a value in excess of £98,000 has to go through the European Journal and applicants then get sifted out.

As Molgrips says the problem comes when people who know sod all about things get involved influencing the Tender documents, that IT project would of been a nightmare because it seems that nobody was really clear as to what was wanted, its all very well having great big ideas unless you can write them down specificaly then the lawyers are going to have a field day.

If the contract isn’t managed properly then you are sunk, you are paying someone 21k a year and he has the incentive to micro manage a billion pound contract.

For all we know in this case the contract was watertight but the coalition cancelled it because it was costing to much money, if that was the case then they are the idiots not the procurement people, or the contract management people.

I am an ex public sector procurement person

We have a scapegoat 🙂

I worked for the DWP for six months and then left. The main reason was the absolutely shocking and change-resistant culture that meant everything I tried to make happen was eventually pushed back. Practises I’d seen work brilliantly in the private sector were dismissed as too radical, massive financial savings (millions) I identified very quickly were either considered not appropriate with no explanation why by DWP seniors or when they were put before the private agencies providing the services, were ignored because they didn;t make as much money.

I saw two identical IT systems go in that cost quarter of a million each, that were both pointless and inefficient. Each time I challenged the private companies they simply complained to someone above me who told me to stop causing problems. The private companies had staff who were incompetent and lacking in many technical skills I’d expect them to have in their position, we were being given the B or C team for sure. These companies are household names by the way.

It was awful and eventually I couldn’t take it any longer. I could see others coming from the private sector going through exactly the same process. Start work there, bang their head against a wall for six months, leave. The contract companies had all the power and were largely left to just do whatever they wanted because they only permies who stayed just wanted a quiet life. Some even operated under a banner of ‘no-one else is big enough to take your business so we’ll just do what we want. You can’t go to anyone else’.

Generally people who had been at the DWP for a long time were often very clever and capable people but they’d forgotten (if they ever knew), what a competitive market looks like so they just bent over and took it even when they knew it was wrong.

I met one guy who on finding out I was a keen cyclist told me he used to cycle quite a lot and then one day he was riding up a hill with his club, got half way up and thought ‘this is too much like hard work’ and never rode a bike again. I assume that’s when he found a job in the DWP.

For all we know in this case the contract was watertight but the coalition cancelled it because it was costing to much money

I think it was cancelled because the contractor had failed to deliver.

It doesn’t help when the mandarins running the project keep changing the deliverables. There is then little chance of delivering on time and on budget, when no one knows from one week to the next what the project is supposed to deliver.

Me, but not this one, and I work either side depending on who’s paying the bills so can see it both ways.

It will have been abundantly clear what the cost of early termination would be, it’d have been in the drafting, but the government chose to cancel it and then look all shocked.

It will have been abundantly clear what the cost of early termination would be, it’d have been in the drafting, but the government chose to cancel it and then look all shocked.

treasury’s latest cost saving exercise is causing much amusement, with local authorities suddenly thinking that they can save £100k per year by terminating their existing PFI and getting someone else to do it. Yeah, how many years of saving £100k do you think it will take to recover the comp on term payment? 🙂

What everyone fails to realise is that 90% of PPP gone bad is nothing to do with “contracts”, it’s relationships deteriorating to the point that both parties seek remedy under their contract. By that point its fecked anyway. 20 more years of becoming embroiled in dispute at every little issue.

When things are going well the contract never leaves the drawer. People look at the spec and manage issues as they arise, without resorting to DRP and lawyers.

I can think of a number of fairly long standing operational projects (not small ones either, £100m+) where there hasn’t ever been a deduction incurred. That’s not to say that a right to a deduction hasn’t ever arisen, just that the client has chosen not to make the deduction. That seems unbelievable, but if you’ve got a competent contractor, a clear spec and a client that is prepared to admit when things aren’t right and need to be changed then it’s achievable.

However, once that relationship breaks down you have to fall back on the remedies you have contractually. If (from the Authority’s perspective) the remedies are insufficient to incentivise the contractor then the project is fecked. On the flip side, if the contractor is being squeezed to breaking point then its fecked too.

It’s all about maintaining relationships, and for the Authority to realise that the contractor is entitled to make a profit, and for the contractor to realise that the client is under pressure from above in respect of its continued spending on operational PPP deals

One of my oldest school mates does. He started off as a stores assistant in a fabrication company – moved into Aerospace purchasing – got a few qualifications and now is a contractor earning eyewatering amounts of money. So far I know he’s bought alot of bog roll etc for the nhs and has now been tasked with another cross government department software project!!! He spends two years on each contract and then is moved on to another!!! He has a very high golf handicap as a result of his occupation. 😯

The civil servant “running”* the show at Immigration/Border agency during this particular public sector cluster**** has plenty of form.
http://en.wikipedia.org/wiki/Lin_Homer

She’s managed to bollox up vote counting, eBorders, West coast mainline trains and now she’s been given a crack at mucking up HMRC. Whoooppeeee!

Qualified as a lawyer in 1980. 1982-current a public sector employee.

* used loosely

Wrecker if that was the case why the enormous pay out?

Someone ****ed up and the solicitors had ’em for brekkie I think. Dunno. Laws stuffs innit?

It doesn’t help when the mandarins running the project keep changing the deliverables.

It’s because they discover the deliverables don’t make any sense.

Stoner, why do senior failures continue on to do more damage to big organisations? The lovely Lin was booted out at Suffolk for failure to perform. How the hell was she given another crack at wasting public money?
It may be a good exercise to out the halfwit who employed her, as that persons judgement is seriously screwed.

Having sat on both sides of the fence the pattern I observed is:

1. There are definitely some extremely capable civil servants but many are neither capable, committed or suitably experienced.

2. When procuring services / IT projects the procurements often go off track because the requirements are poorly expressed, or in some cases just plain wrong. This causes bidders to waste time trying to figure out what the client really wants, and if they’ve won the contract, go through the pain of negotiating changes to the contract – in many cases the changes reflect that the civil servants just didn’t understand their own existing business process.

3. Most contracts require the customer to make available information in good time. When the contractor has taken on people to deliver a service / develop a system but can’t get on with it because the customer isn’t ready that still costs them money.

4.Many of the recent debacles fail from points 2 and 3 – the £10B HMRC Debacle and the several £B the NHS effectively paid out to avoid litigation on Connecting For Health contracts being two well publicised examples.

5. To get the procurements right first time and avoid wasting money, the civil service sometimes uses outside experts. This expertise isn’t cheap so the public doesn’t like it and the government tries to minimise the use of it – per the 50% reduction in consultancy spend under the current government.

6. The public also don’t like the “fat cat” salaries required to get people with the right experience into Whitehall permanent jobs, so that doesn’t happen either.

Points 2 to 6 get repeated ad infinitum and probably will be until the public accept that paying the going rate to get the right expertise into the requirements definition and tendering process will save money down the line – the accountability of civil servants for getting things wrong is also zero (per the west coast rail franchise debacle) so until they feel the heat for getting things wrong it’s highly unlikely anything will change.