Should winning bidders tell if they suspect a new contract is undeliverable?

At a hearing of the Public Accounts Committee on 23 May 2011, the chair Margaret Hodge asked why executives at BT and CSC signed NHS IT contracts that were “undeliverable”. In 2003 BT won contracts under the National Programme for IT...

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At a hearing of the Public Accounts Committee on 23 May 2011, the chair Margaret Hodge asked why executives at BT and CSC signed NHS IT contracts that were “undeliverable”. In 2003 BT won contracts under the National Programme for IT worth £2bn. CSC’s 10-year NPfIT deal was then worth £1bn. 

This was Hodge’s question to senior executives of BT and CSC:

“Why did you sign a contract committing to deliver something, which we now know you cannot deliver, but which I think you as professionals might have taken a view back in 2003 was undeliverable?”

This was the reply of Patrick O’Connell, President, BT Health:

“Personally I was not here in 2003, but, to answer your question, I would guess or speculate that in 2003 the needs of the user—as perceived at that time—the policy of the Department, the state of technology, the trade-off between costs and schedule were believed to be doable at that time.  As time has progressed, many things have progressed and evolved, and it has brought us to a different solution.  I do not know that it necessarily means it was not doable at day one.”

Hodge: “So if you had been around in 2003 would you have told Government, “This is not doable”?

O'Connell:  In 2003?  I do not think I would have said such a thing in 2003.  It is more a matter that there are a lot of factors I am unfamiliar with from 2003, but the principle of it—

Hodge:  … This was never deliverable.  I cannot understand why professionals signed it [contracts] in 2003 saying, “We can deliver.”

O'Connell:  One of the things that has changed is the need of the users.  In 2003, if one had built the system that was envisioned versus the system that is needed today—in the sense of a centrally located system versus a clinically-led system—I think they would have approached it differently.  It looks like the need has evolved. 

Hodge: “I am not sure that I accept that”. Although she stopped this line of questioning because of a shortage of time, she'd raised an important point - one that is at the heart of many big IT disputes: should winning bidders let on that they may have problems delivering what the customer wants even though the supplier’s sales team has promised to deliver?

In the case of the NHS IT scheme, we have an insight into the views of the BT board weeks after the Department of Health awarded the BT NPfIT contracts. Those views were communicated at an event in February 2004 to which journalists were not invited (though they were not excluded). One of the speakers at the event was Sir Christopher Bland, the then chairman of BT. The event was at The Pit, a basement theatre in the Barbican Centre, London. 

This is some of what Bland said at the Barbican in February 2004 on BT’s winning of three NPfIT contracts which were then worth £2.1bn. He said the contracts were the biggest in aggregate that BT had ever won. 

“… no other country has attempted what collectively we are about to attempt. So it is immensely exciting to us, and we are excited as well as being somewhat frightened by the complexity and enormity of it but it is exciting and it will be a real challenge to get it to work and an immense achievement for all of us if we can pull it off…”

At the start of his talk Bland referred to his 14 years of experience as chairman of a group of London hospitals 

“During that time, one of my early experiences was being hauled out in front of the Parliamentary committee … to get beaten up on behalf of Charring Cross. It did not matter that it had happened four years before we had taken responsibility for it. 

“We had lost some patient records, a patient had suffered and quite rightly the MPs were looking for somebody to beat up and I was it. It is an experience I have not forgotten and it is something that in a small way I can address…

“The second experience …was that I chaired a joint working party between the pathologists of Charring Cross and the pathologists of Hammersmith to persuade them to adopt a common information system, common processes and procedures. 

“My success there I think you would charitably give me would be about three out of ten …it was a salutary experience about complexities of getting common systems across organisations that had been used to working in silos. 

“In thinking about the complexities of the task ahead, it is worth addressing where the problems are likely to arise. Some things are not hugely problematical. It seems to me that the hardware works; the software is capable of being made to work; and the proof of concept we have all gone through … if we all in this room can get our act together over the coming years there are no fundamental technical obstacles to making the vision become a reality. 

“There will be problems I think particularly in the areas of integration and migration; problems with legacy systems and, for example, with the role of EMIS which has been flagged today. 

“But those are problems that I think can be overcome. The single biggest problem is, in a sense, encapsulated in this room and all of us, and that is the problem of organisation and of culture. 

“The NHS in all its complexity is in this room - and BT is not a simple organisation. BT has historically worked in silos. We have partners who we work very well with in securing this contract.  

“But that is step one. Working effectively with those partners in implementation is of course a further and much greater step. And working across the NHS in a highly complicated organisation is a very significant challenge but it’s extremely encouraging to see the turn-out at today’s meeting and the feeling that we are all in this together and that we can make it work. 

“There … will be problems; there will be rows, what seem like almost insuperable problems that arise probably in three months to the end of this.

“All I can say from our standpoint is that we will do our best to work with you to resolve those problems and to find a way around them. BT  is absolutely committed to this programme. 

“This was a decision signed off at Board level to commit to a number of contracts of very considerable size: in aggregate they are the biggest contracts BT has won in its history. And we are well aware of the history of major IT projects in the National Health Service which, to put it politely, have been chequered. This can be different. 

"There are all kinds of reasons why in the past those major projects have not succeeded. This one can and indeed must be different. I was involved in a presentation when we won London - some of you were there - I was involved in the presentation in the North West which we did not win.

“I was asked what the Board view of it was and I said well we felt slightly like a dog chasing a car … what do we do if we catch it? Well we’ve caught it….” 

Having won the contract BT wanted to “take the NHS forward to being world class”. Bland said: “It will be world class if we succeed in implementing the totality of this project across the board, because no other country has attempted what collectively we are about to attempt. 

“So it is immensely exciting to us, and we are excited as well as being somewhat frightened by the complexity and enormity of it but it is exciting and it will be a real challenge to get it to work and an immense achievement for all of us if we can pull it off.

“But success can only be measured if front-line staff - if nurses and doctors - are pleased with the services and support that we can provide them and if those services and support enable them to produce a significantly better quality of service to patients. 

"... We at BT will work tirelessly and energetically with you to make this project a real, real success.”

The rest of the NPfIT story is, well, a chequered history. 

BT, meanwhile, has found the value of its NPfIT-related business nearly double, from the initial £2.1bn to about £4bn. This story is here. 

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