Government IT contracts 'need to be clearer' to improve procurement

Clearly-defined Service Level Agreements (SLAs) need to be in place from the start of contracts before the government can publicly name underperforming IT suppliers, according to industry experts.

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Clearly-defined Service Level Agreements (SLAs) need to be in place from the start of contracts before the government can publicly name underperforming IT suppliers, according to industry experts.

Defence secretary Liam Fox recently told the Financial Times of his plans to better control the Ministry of Defence’s (MoD) procurement budget, which included publishing a quarterly list of “projects of concern” that are running over cost or budget. This is in addition to creating of a Major Projects Review Board to ensure the department’s 20 largest projects are on time and within budget.

“Why could companies want to keep information about potentially failing contracts from their own shareholders? It’s time we opened this up,” Dr Fox told the newspaper.

Dr Fox’s planned measures have clear implications for IT suppliers, as well as others that provide services to government. Tola Sargeant, research director at analyst house TechMarketView, believes that other departments may well follow suit.

“It’s all about transparency, to show value for money,” she said.

However, the initial action for this kind of exercise must be to clearly define contracts and SLA agreements, said Ken Ume, consulting director at business IT advisory company ImprovIT.

“The difficulty is, for example, if the SLA is being met but the SLA is poorly defined. “So the starting point is to come up with a set of standards for SLA on both sides [customers and supplier]. It is only going to be of value if everyone has a chance of avoiding being on the list, and if they’re on the list, they deserve to be there,” Ume said.

Sargeant agreed, but added that other factors, outside of the supplier’s control, are considered.

“It’s important that the SLAs are carefully-defined tracked, that they’re as transparent as possible, measured against, and that other factors are taken into account.

“For example, with the National Programme for IT, changes that the government was after were really outside the control of the IT supplier, but would have had a significant impact on the SLAs,” she said.

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