Individual Government IT Projects To Be Capped At £100m

The government has said that it wants all future individual IT contracts or projects to have a lifetime cost of less than £100 million.

The ambition was stated in a government Procurement Policy Note which also expressed its desire to improve competition, reduce the risk of failure and achieve better value for the tax payer.

Setting the limit

“This document sets out our government policy on the presumption that individual ICT contracts or projects should be less than £100m lifetime cost,” commented minister Francis Maude, who also reiterated the government’s desire to award 25 percent of contracts to SMEs to improve delivery timelines, reduce the risk of project failure and lower the cost for all parties.

“The government wishes to reduce significantly the delivery risk of very high-value projects which use ICT to deliver their business objectives and also to achieve better value for money overall from its investment in those projects,” read the document. “All future ICT projects will be designed from the outset with the presumption that they will have a total lifetime cost of less than £100 million unless a strong case can be made that doing so increases the overall cost to the taxpayer, notably increases the risk of failure or increases the security threat to the public body or Government as a whole.”

It is also hoped that any services or infrastructure procured can be used by multiple government departments, who should also review all options elsewhere before procurement takes place. Open source solutions are also to be encouraged if they are feasible.

The previous Labour government was widely criticised for ordering expensive IT projects to “sex up” their policies, while it has been revealed that government IT projects cost taxpayers £16 billion a year. The NHS recently agreed a compromise with American IT provider CSC, saving the government £1 billion on a failed project. CSC delivered what was described as an “unworkable solution” that contributed to the ultimate failure of the NHS National Programme for IT.

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