Office of e-envoy paid £5m for aborted contract

4 Apr 02
The Office of the e-Envoy, the unit heading the drive for on-line services, has wasted almost £5m on a contract that was never signed.

05 April 2002

Public spending watchdog the National Audit Office has revealed that the Cabinet Office unit, headed by Andrew Pinder, had to hand over £4.77m to IT firm Compaq during the procurement process for phase one of the flagship Government Gateway project.

Compaq was named as preferred bidder for the scheme, which was to provide the technical infrastructure for Internet users to conduct secure transactions with Whitehall departments. Because of the tight completion deadline of January 2001, the firm was asked to begin work before contract negotiations were completed.

Negotiations between Compaq and the e-envoy broke down in September 2000 and no contract was signed, with the result that the firm had to be paid off and the work instead undertaken in-house. Phase one of the project cost the government £15.6m, in addition to the money paid to Compaq.

'The procurement did not run smoothly,' the NAO concluded with typical restraint. In more general terms, it said: 'Departments need to produce better business cases supporting spending on IT projects, to have improved IT project management skills, and to measure better the benefits achieved by IT projects.'

Elsewhere in the report, Better public services through e-government, NAO inspectors called on departments to set 'realistic targets' and develop incentives to encourage the public to use electronic services once they are made available. While many ministries recognised the need to encourage the take-up of services, few had any concrete plans on how to achieve this.

The inspectors also demanded action to break down the barriers to civil servants using IT. 'Unless they develop appropriate IT and change management skills, and have the confidence to adopt innovative approaches to deliver better public services, the benefits of e-government will not be achieved.

Sir John Bourn, the NAO's comptroller and auditor general, said more had to be done to ensure that taxpayers' money was being wisely spent on e-government projects.

'The major challenge is to get services on-line and to encourage and enable people to use them. Otherwise the considerable potential gains in departments' efficiency will not be delivered and large amounts of public money will have been wasted,' he added.


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