Memorandum submitted by Accenture (RPA
Sub 14)
EXECUTIVE SUMMARY
1. Accenture has been and continues to remain
committed to supporting the RPA to deliver payments through RITA
(RPA Information Technology Application). Accenture understands
the importance to farmers of receiving payments in an orderly
and efficient manner.
2. Accenture was procured in January 2003
after a competitive bidding process to build and maintain a new
claim processing system known as RITA. The January 2003 contract
was a fixed price, fixed scope contract.
3. RITA is part of the wider RPA business
processes and IT systems which together are designed to enable
the RPA to make payments under the Single Payment Scheme (SPS).
Accenture does not have responsibility for these other IT systems
or processes.
4. In May 2004, a revised contract was agreed
in order to accommodate the fundamental changes necessitated by
the EU CAP Reforms of June 2003 and to enable as soon as possible
the implementation in England of the "dynamic hybrid"
system. Major changes to the RITA specification continued to be
made until December 2004. This new focus impacted the specifications,
scope, delivery timeframe and overall cost of RITA.
5. As has been previously recognised, not
least by the Office of Government Commerce, it is difficult to
implement large scale and complex business change programmes at
a time of massive policy change. It is widely acknowledged that
the June 2003 EU CAP Reform represented a fundamental change in
terms of policy. Those reforms required the RPA to order significant
changes to RITA, the scale of which had not been anticipated when
the original contract was signed.
6. Despite the challenges created by the
changing policy environment which required the RPA to request
significant changes to RITA between May and December 2004, Accenture
has successfully delivered the releases of RITA necessary to make
the SPS payments that commenced in February 2006.
7. RITA is functioning as designed and has
been in operation and fully stable since October 2005. It is available
to the RPA from 6 am to 9 pm weekdays and 8 am to 6 pm weekends,
and we are proud of what we have delivered.
8. Our work met the budget and contractual
requirements agreed to by Accenture and the RPA. In January 2003,
Accenture and the RPA agreed a fixed price, fixed scope contract.
After the EU CAP Reforms of June 2003, the scope of the contract
changed and continued to do so. The increased value of the contract
has arisen from approved change requests representing changes
made to RITA specifications or timescales.
SCOPE AND
HISTORY OF
ACCENTURE ENGAGEMENT
9. The 1999 PricewaterhouseCoopers (PwC)
review of the administration of EU agricultural payment schemes
in England proposed that the CAP administration activities of
the Intervention Board and the Ministry of Agriculture Fisheries
and Food (MAFF) be brought together to form a new organization
(the RPA).
10. In April 2001, the Ministry of Agriculture,
Fisheries and Food (MAFF) embarked on the RPA Business Change
Programme aimed at improving the effectiveness and cost efficiency
of key aspects of CAP administration using modern technology while
also improving the service and value to its customers.
11. To help deliver some IT elements of
this Change Programme, DEFRA (the successor Department to MAFF)
let the procurement for a system to replace certain legacy information
systems. Accenture won the procurement and contracted in January
2003 on a fixed price, fixed scope basis to build and maintain
RITA. Accenture is not involved in any other part of the Change
Programme.
12. Accenture was procured in January 2003
after a competitive bidding process to build and maintain a new
claim processing system known as RITA (RPA Information Technology
Application). RITA is one of several IT systems designed to enable
the RPA to make payments to farmers. RITA is being delivered through
a series of software releases since September 2004. Although there
were challenges in the early stages of the RITA project prior
to the EU CAP Reforms of June 2003, Accenture has successfully
delivered the releases of RITA necessary to make the payments
under the Single Payment Scheme (SPS) that commenced in February
2006. These releases have been in operation and stable since October
2005. RITA is functioning as designed and continues to be stable,
and we are proud of what we have delivered.
13. After the January 2003 contract was
entered into by Accenture and the RPA, the June 2003 EU CAP Reforms
were agreed. As a result of these Reforms and their implementation
in England, the RPA changed its requirements for RITA.
14. RITA, as delivered, is a new claim processing
application. It was a significant development effort, and is only
one part of the overall application development landscape needed
for the SPS. The success of the Change Programme and the RPA's
ability to make payments to farmers is also dependent on a number
of other system development projects and business processes, including
the finance system, OREGON and the interim entitlements calculator.
Accenture has never been responsible for these other IT systems
and business processes.
CONTRACT ISSUES
As much detail as possible on the contract tendering
process
15. Accenture was engaged in January 2003
as a result of a standard EU procurement process. The key milestones
of the procurement process were as follows:
— Open Supplier Conference (27 November
2001).
— Formal Pre-Qualification Stage (11
Feb 2002).
— Request for Proposals issued (4 March
2002).
— Accenture proposal submitted (29
April 2002).
— Contractual negotiations between
the RPA and potential suppliers, including Accenture (took place
between May and December 2002).
— Potential suppliers (including Accenture)
invited to submit Best and Final Offers (20 December 2002).
— Accenture submitted its Best and
Final Offer (3 January 2003).
— Contract signed with Accenture (31
January 2003).
Who was ultimately responsible for the Accenture
contract at the Defra/RPA end Which Minister signed it off?
16. The January 2003 contract was concluded
between Accenture and the Secretary of State for Environment,
Food and Rural Affairs acting through her agency, the Rural Payments
Agency. The contract was signed by Johnston McNeill, RPA Chief
Executive.
17. Accenture has no visibility of any approval
process there may have been on this contract between the RPA,
DEFRA and the responsible Minister.
What penalty or incentive clauses were included
in the contract?
18. The RPA and Accenture agreed a fixed
price, fixed scope contract ("January 2003 contract")
with payment against delivery of RITA releases on acceptance by
the RPA. There were no penalty or incentive figures in the original
contract; however, the current contract re-negotiated in May 2004
contains various provisions under which both parties have accepted
financial liability in the event of default. Further, payment
to Accenture is dependent upon the achievement of Key Milestones
and Accenture is subject to service credits, in each case subject
to contractual limitations. We believe there is the necessary
risk/reward balance on both parties as required for a major project
of this nature to be successful.
Whether Accenture thought that the original contract
provided sufficient resources at the outset?
19. The original contract specifically excluded
EU CAP Reform. On this basis, and given the specific policy environment
at the time, Accenture believes that the January 2003 contract
provided sufficient Accenture resources at the outset for Accenture
to deliver the original scope of RITA.
20. The January 2003 contract was planned
to replace legacy IT support for existing systems. Its scope included
a Land Register [Geographic Information System (GIS)], a customer
register, a claim processing engine, 68 CAP schemes, a customer
service centre (CSC), a document management unit (DMU) and a customer
on-line capability. It called for Accenture to build and maintain
two releases of software: Release 1 covering GIS, CSC, DMU and
land based schemes; Release 2 for trader schemes.
CHANGES TO
SPECIFICATIONS AND
COSTS
The extent to which the specifications of the
RITA contract had to be changed after the CAP reform agreement
of June 2003?
21. The June 2003 EU CAP reform agreement
included, amongst other things, the introduction of the Single
Payment Scheme (SPS) which the UK chose to implement in 2005 and
that introduced a fundamental and major change in the way agriculture
is supported in England:
— Cut the decades-long link between
subsidies and production.
— Payments made to farmers on the basis
of land area farmed.
— New rules came into force on 1st
January 2005 under EU CAP reform.
As a result of EU CAP reform, new categories
of claimants were eligible for payments under the scope of SPS,
resulting in a significant increase in the number of one-off registrations
for entitlements by landowners to receive payments.
22. Changes brought by EU CAP Reform meant
that the original contract needed to be revised to include changes
to the planned system that would enable the RPA to make payments
on the basis of the Reforms. Accenture and the RPA therefore agreed
in May 2004 to vary the original RITA contract in order to accommodate
the fundamental changes brought about by EU CAP Reform and to
enable as soon as possible the implementation in England of the
"dynamic hybrid" system. The parties agreed to concentrate
RITA development on the implementation of the SPS. This new focus
impacted the specifications, scope, timeframe and cost of RITA.
23. Over the course of the next seven months,
the policy details of EU CAP Reform continued to change. Although
it was originally expected that the rules for the reformed payment
scheme would be finalised before the end of the calendar year
2003, in fact this did not happen until late 2004. As a result,
in addition to the changes to the RITA contract that were agreed
between Accenture and the RPA in May 2004, major changes to the
RITA specification continued to be made between May 2004 and December
2004. To deliver RITA, software development had to continue in
parallel with the finalisation of these rules, albeit with a delay
to the implementation date and re-phasing of the release structure,
due to the changes in late 2004. Changes in specification necessarily
impacted the delivery timeframe and the overall cost.
24. On the basis of the revised May 2004
contract and the RITA changes requested by the RPA in late 2004,
revised releases of RITA required to meet the needs of SPS 2005
payments were agreed and were all delivered by October 2005. These
deliveries took place as follows:
— Release 1a—the Rural Land Register
went live in September 2004.
— Release 1b—the Customer Register
went live in February 2005.
— Release 3a0—the High Volume
Data Capture for SPS Application forms went live in May 2005
— Release 3a1—the core validation
functions for SPS Applications went live in a pilot July 2005
and rollout in August 2005.
— Release 3a2—the core batch
functions required to establish entitlements and authorise payments
went live on 3 October 2005.
The extent to which the increase in running costs
experienced by the RITA contract can be attributed to changes
in the contract specifications
25. For the original RITA contract, Accenture
and the RPA agreed a fixed price, fixed scope contract in January
2003.
26. The increased value of the contract
has arisen from approved change requests representing changes
made to specifications or timescales. In addition to the costs
brought on by the changes mentioned above, RPA subsequently procured
other items from Accenture not within the scope of the May 2004
contract.
CUSTOMER VOLUMES
What projections of customer volumes were provided
to Accenture and upon what basis were these forecasts made?
27. The January 2003 contract included an
assumption that RITA would be capable of supporting up to 100,000
customers. This was increased to 150,000 customers as part of
the revised May 2004 contract. These figures were provided to
Accenture by the RPA.
28. In addition to the assumptions provided
by the RPA and included in the contracts, the RPA provided an
estimated set of volumes for each software release to enable Accenture
to create a capacity model to demonstrate how RITA handles the
volumes.
What problems were caused to the IT project by
there being a larger than anticipated volume of applicants to
the SPS scheme?
29. The combination of the 50% increase
in the number of claimants (from 80,000 to 120,000) and the requirement
to register all the land in the first year of SPS (which resulted
in an increase of over 1,000% in land changes from 9,000 per annum
to over 100,000) unexpectedly increased the load on RITA and led
to problems of availability and stability of RITA. These issues
had to be rapidly addressed by the RPA and Accenture, spending
additional effort and time to increase the capacity and stability
of RITA.
30. The large increase in volumes has resulted
in greater demand from the RPA for RITA. To support this increased
demand, Accenture has made enhancements to both the hardware and
software to improve the responsiveness and stability of RITA in
agreement with RPA.
31. RITA has been fully stable since October
2005 and is available from 6 am to 9 pm weekdays and 8 am to 6
pm weekends.
STAFF RELATIONSHIP
The relationship between core RPA staff and Accenture
personnel and the extent to which RPA staff were placed at a sufficiently
high level in the IT project, so they knew what was going on
32. The governance arrangements for the
RITA project include the following:
— The DEFRA Executive Review Group
(ERG).
— The joint DEFRA / RPA Common Agricultural
Policy Reform Implementation Board (CAPRI).
— RPA Change Programme Board.
— RPA and Third Party Programme Management.
— Office of Government Commerce reviews.
33. The Executive Review Group is chaired
by the Permanent Secretary and usually meets on a monthly basis.
The focus is to keep departmental stakeholders abreast of progress
on the RPA project and to secure agreement to key decisions. Accenture
has attended as an invitee in February 2006 and April 2006 and
continues to be an occasional invitee on a case by case basis.
34. The Common Agricultural Policy Reform
Implementation Board (CAPRI) is jointly chaired by the RPA Chief
Executive and the DEFRA Director General for Sustainable Farming,
Food and Fisheries. Its focus is purely on the implementation
of the SPS. It spans new deliverables and releases and operational
progress of implementation of SPS. Accenture attends CAPRI meetings
as senior IT supplier.
35. Accenture attended meetings of the RPA
Change Programme Board which until recently met every two weeks
during the Change Programme and was chaired by the RPA Programme
Director and comprised senior RPA staff, including the RPA IT
Director and the RPA Operations Director. The Programme Board
was responsible for monitoring progress of the change programme
as a whole.
36. In addition, for each specific Release,
there are a series of reporting structures (for example, Board
meetings, Project Team meetings, Business Relationship Manager
meetings, Test Governance meetings, Release Owners meetings, Risk
and Issues meetings) and there was a Change Control Meeting to
manage formal contractual changes to the agreement, all designed
to ensure that RPA staff are involved, informed and able to exert
necessary control on the RITA project.
37. There has been extensive assurance activity
from the RPA in relation to Accenture's work—specific RPA
staff closely involved with testing and providing assurance on
the Releases and on the Accenture live service, as well as external
third party reviews commissioned by the RPA.
38. Much of the assurance and programme
management for the Change Programme is provided by RPA engaged
third party companies.
LINES OF
COMMUNICATION
How the advice and progress reports from Accenture
were fed into DEFRA and the decision making progress
39. Apart from the updates provided at the
CAPRI meetings mentioned above, Accenture does not know if or
how its progress reports to the RPA are incorporated into DEFRA's
decision-making process.
40. Accenture has regular meetings with
senior DEFRA officials, including the DEFRA Permanent Secretary.
RPA RISK MANAGEMENT
Was it the experience of Accenture that the RPA
was unduly risk averse? For example, was it ever possible to cut
corners when testing system releases?
41. As has been widely acknowledged by numerous
commentators and experts, significant IT enabled business change
programmes can be difficult to manage. There have been many examples
of problem projects in the public and private sectors in recent
years with difficulties attributed to poorly defined requirements,
changing business needs and lack of business involvement and preparedness
that can lead to delivery difficulties.
42. As described above, the substantial
EU CAP reform in June 2003 and continuing changes to the rules
for the SPS presented significant challenges to the Change Programme.
43. With this context in mind, Accenture
believes that the RPA had a thorough and comprehensive assurance
approach (both in quality and in timescale) to the development
of RITA.
44. The RPA requires and Accenture provides
a rigorous testing approach to new system releases. These releases
have been in operation and stable since October 2005.
May 2006
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