THE IMPLEMENTATION OF THE NATIONAL PROBATION
SERVICE INFORMATION SYSTEMS STRATEGY
THE
HOME
OFFICE'S
RELATIONSHIP
WITH
ITS
SUPPLIER
28. The Home Office's contract with Integris to install
the computer network, develop CRAMS, and provide a managed service,
was drawn up in the form of an enabling agreement. The initial
agreement ran for seven years until the end of December 2001.
The agreement specified in broad terms the service to be provided
and made provision for particular equipment, and more detailed
service requirements, to be specified by the Home Office via purchase
orders as and when required.[25]
29. The procurement of the NPSISS enabling agreement
did not comply fully with European public procurement requirements.
As a result, legal advice received by the Home Office in 1999
suggested that any new purchase orders raised under the enabling
agreement would be unlawful.[26]
This situation had held back work, for example, on the provision
of access to the Internet and links with police computer systems.
The Home Office confirmed that the procurement for the new Phase 1
contract had been conducted properly in line with EU regulations.
[27]
30. The NPSISS enabling agreement was largely open
ended, with additional expenditure commitments being made by the
Home Office and probation services as and when required. In the
Home Office's view, elements of the agreement were cost plus,
but other parts transferred risk to the supplier as a fixed price
was agreed for certain products. On the contract as a whole, Integris
estimated that it had achieved a rate of return amounting to just
over break-even, although on the implementation of CRAMS and the
Helpdesk service it had lost money. Integris had expected a positive
return overall.[28]
31. At times during implementation, relations between
the Home Office and Integris had been strained. In May 1997, the
Home Office had issued Integris with a formal warning that unless
the acceptability of CRAMS improved markedly the whole programme,
and hence Integris' contract, could be called into question. Integris
had objected that it had not received specifications for the changes
required. It had worked to improve the user interface of CRAMS,
although considering that it was not contractually obliged to
do so. However, Integris accepted that it had been tainted by
the failure of this application.[29]
32. In 2000 the Home Office simplified its contractual
relations with Integris by entering into a new consolidated purchase
order, at an annual cost of £5.4 million, for central support
and maintenance services. Prior to consolidation, the Home Office
had relied on a total of 69 purchase orders, some of which were
overlapping and unnecessary. The Comptroller and Auditor General's
Report concluded, however, that the consolidated purchase order,
which did not fully specify the desired outputs and outcomes,
left value for money at risk.[30]
Negotiations for the new consolidated order had been completed
under severe time pressures because Integris had threatened to
withdraw resources from support functions. The Home Office had
therefore not been in a strong position when negotiating the new
consolidated purchase order.[31]
33. The Home Office spent around £15.5 million
on remedial work in 1998 and 1999 to ensure that the NPSISS hardware
and software were Year 2000 compliant, and to upgrade the NPSISS
infrastructure.[32] Integris
were not aware initially that the systems it was supplying were
not Year 2000 compliant. Once Year 2000 issues came to light,
Integris had carried out a study at its own cost to advise the
Home Office on the way forward. At the same time, it sought warranties
from hardware and software suppliers about their Year 2000
performance. However, in the absence of those warranties, Integris
had continued to supply non-Year 2000 compliant information
technology systems to probation services. Integris agreed that
to some extent it had failed to meet industry best practice.[33]
Legal advice received at the time suggested the Home Office had
no clear right to require Integris to carry out the Year 2000
compliance work at no cost, but that the supplier would be liable
for any breach of contractual service levels and for any failure
to comply with best industry practice. The Home Office had used
the opportunity to upgrade the system and investing in Year 2000
compliance had therefore been worthwhile in its view.[34]
34. The Home Office acknowledged that there had been
failings in its management of the NPSISS agreement, and that it
had under-invested in contract management. The Home Office had
taken action to put right mistakes made in the past, and the National
Probation Service had since enhanced its procurement management
capability. The new Phase 1 contract with Integris, in their view,
had been awarded on value for money grounds. The Home Office regarded
Integris as a successful company and, it hoped, a collaborative
partner.[35]
Conclusions
35. Flaws in the original enabling agreement with
Integris held back urgent developments needed by local probation
services. Future contracts should receive proper legal scrutiny
prior to being finalised and, if problems occur, solutions should
be identified which minimise the impact on probation services.
36. For contracts that may run for some years, it
may not be possible for all aspects of all services to be specified
in detail at the time the contract is signed. Any significant
new developments during the life of the contract should be based
on a clear specification of the required outputs from the contractor,
with costs being controlled tightly.
37. For a time, probation services received non-Year
2000 compliant equipment even though this fell short of best industry
practice. Any failure to receive services or equipment in line
with best industry practice should be vigorously pursued and suitable
reparation received.
38. The Home Office underestimated the effort required
to properly manage the contract with Integris. The National Probation
Service should specify clearly the roles and responsibilities
of its project management team, users and its contractor, establishing
a shared understanding of key terms and deadlines.
25 C&AG's Report, paras 1, 13, 1.14 Back
26
C&AG's Report, paras 15, 2.52 Back
27
Q12; Ev 1 Back
28
C&AG's Report, para 3.5; Qs 74-77, 173-183 Back
29
C&AG's Report, para 2.31; Qs 5, 69, 141-142 Back
30
C&AG's Report, paras 14, 2.49-2.51, 3.12 Back
31
C&AG's Report, paras 11, 3.11; Qs 197-204 Back
32
C&AG's Report, paras 3.13-3.16 Back
33
Qs 48, 78-83 Back
34
C&AG's Report, para 3.15; Qs 90-92 Back
35
Qs 8,18, 95, 158; Ev 1 Back
| 
