Written evidence submitted by DWP|
In response to the follow up question to Q315,
in which the committee now asks for a copy of the Universal Credit
Gateway Zero review.
The Cabinet Office Major Projects Authority Starting
Gate review into Universal Credit is attached at Appendix A (not
In response to the follow up question to Q319,
in which the committee now asks for details of the open competition
for the Universal Credit system.
The Department for Work and Pensions is running a
fully open competition to select suppliers to develop and maintain
new IT solutions in support of business change, including IT for
Universal Credit. The Department advertised for a full range of
Application Development (AD) and Application Maintenance (AM)
services in an Application Deployment competition which was advertised
in the Official Journal of the European Union (OJEU) in June 2009.
Over 70 suppliers expressed an interest in response
to the advert; and the competition has progressed through a series
of stages, including a pre-qualifying stage and further down select
stage, leading to a period of competitive dialogue with short
The bidders' final responses are being selected and
the Department plans to select preferred bidders in May 2011,
and then seek approval to sign contracts via Cabinet Office as
soon as practical.
In response to Q340 from Greg Mulholland, in which
he asks for the number of SMEs with which the Government has direct
contracts and the number with which it subcontracts.
The Government does not hold a central record of
data on the numbers of contracts it holds with SMEs either directly
or as sub contractors on government contracts, however, individual
departments may collect this data for their contracts. From January
2011, as part of the Prime Minister's Transparency commitments,
all departments are required to publish each new contract let
over £10,000 and state whether this contract has been let
to a SME. This information is available on the new Contracts Finder
website alongside tender documents and opportunities. As part
of the business plan process each department is also required
to measure and publish the percentage of their third party spend
that goes directly to SMEs. The Government is investigating how
best to collect data on spend with SMEs as sub-contractors.
In response to the question asked in the informal
session by the Chairman about the ending of the Department's Desktop
Services contract and whether that presented an opportunity to
extend the use of Open Source.
The contract for Desktop Services between the Department
of Work and Pensions and Fujitsu has now ended. Initially, to
ensure business continuity, the Department will use the existing
contracts with HP whilst it considers a longer term contracting
strategy. The Department is committed to examining the use of
Open Source for the delivery of Desktop Services, with any decisions
to implement Open Source being subject to the full assessment
of the technical and operational implications as well as value
for money assessments.
In response to the question asked at the end of
the informal session by the Chairman, in which he asks how different
are the costs of running back-office systems at DWP compared with
other organisations where the CIO has worked.
I have been the Department's CIO for seven years,
since 2004. My assessment of the cost of running this Department's
back-office systems is that it compares very favourably with its
peers. The Department has made significant strides in reducing
its IT costs over the last few years and continues to do so.
In 2009 Gartner's benchmark of DWP's IT capabilities
found that the Department's operating costs, as a percentage of
overall operational expenditure, were better than that found across
the banking industry. It also noted that the number of employees
engaged in IT activities in the Department was five times lower
than for those across the banking industry; and that proportionally
the Department spends less on IT to enhance and transform its
business than those of peer group organisations.
Since this benchmarking exercise the Department has
embarked on an operational review of its IT which will further
reduce the IT cost base.
In response to the question asked at the end of
the informal session by the Chairman, in which he asks if anything
has been done to investigate and benchmark the root cause of different
costs, for example with large systems like Oracle and SAP, and
for copies of the benchmarks.
The Department has not benchmarked the IT component
of its back office Shared Services separately, only the outputs
from the Department's back office business processes, which include
the IT costs, for example the cost per invoice and the cost per
The last time the Department's business outputs were
benchmarked was by Atos Origin in 2007. They are now out of date.
Ministers agreed last year that the Department should refresh
these earlier output benchmarks and the work was commissioned
from PWC and is currently in progress. The results of this benchmarking
exercise will be available in summer 2011.