02 July 2004
A sign of a more aggressive Whitehall emerged this week with the Cabinet Office's summary dismissal of contractor ITnet after an £83m project looked in danger of becoming delayed and over-budget.
Outgoing e-envoy Andrew Pinder said the move was necessary to 'protect vital public services'.
ITnet responded by threatening court action to recover £20m of investment.
The Data Centre Hosting deal, signed in July 2003, was designed to merge the Government Gateway, the Knowledge Network and DotP (a content system) into a single managed service.
The project was very much in line with the government's current efficiency mode and was also intended to lay the foundations for future e-government expansion.
In a statement the Cabinet Office said ITnet had failed to deliver any of the services expected and was several months behind schedule.
'[It] was forecast to be considerably over budget if this continued,' the department said. It will begin immediate work with alternative suppliers to ensure 'continuity of service.'
The department was hailing its termination as proof of the government's 'proactive approach' to preventing IT disasters that have plagued Whitehall in the past.
ITnet, which has just one other contract in central government, said it was disappointed by the decision and blamed the Cabinet Office for the delays, claiming it kept changing requirements.
Oliver Whitehead, ITnet chair, said the company was committed to recovering its investment costs, estimated at £20m, and was convinced that the contract provided for reimbursement.
The Cabinet Office remained tight-lipped on the issue, but has terminated the deal for breach of contract.
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