

IT giants 'ripping off Whitehall', say MPs - anya
http://www.bbc.co.uk/news/uk-politics-14314935
Government departments have been ripped off by a "cartel" of big IT firms, a damning report by a committee of MPs has found.
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ZoFreX
"In its report, the public administration committee recommends that
departments across Whitehall use more small and medium-sized IT suppliers to
increase competition and bring down prices."

This is exactly what already happens, not that I think MPs know about it. I've
personally worked on and even in some cases BUILT government websites, yet you
won't find my name or my employer's (at the time) name on their books. They
contract stuff out to the same companies again and again, ostensibly because
they trust them / rely on them / any number of obviously not true reasons, and
I don't think they realise that when they pay a big company £300,000 to make a
website, they just turn around and sell it on to a small company who does it
for £40,000.

I won't name websites or companies for obvious reasons, but those are quite
close to actual numbers.

~~~
wisty
The big company probably eats the risk of the small company stuffing up, or
the government changing requirements halfway through the project.

They also do all the unexciting tender work, certifications, negotiations,
rainmaking, etc.

If a government employee asked a savvy web dev to scope out and implement a
solution, it would be cheap. But they can't work that way. The project has to
be specified upfront, in advance, because otherwise the government might get
cheated by an unscrupulous developer. They would rather be _sure_ they are
getting cheated, that way there's no way they can be accused of favoritism.

~~~
pbhjpbhj
> _But they can't work that way. The project has to be specified upfront, in
> advance, because otherwise the government might get cheated by an
> unscrupulous developer_

I don't understand what you're saying here. Are you saying the risk of losing
a few £10k is worth paying a few £100k over the odds to avoid?

Surely the gov should be using their own web devs and having a consistent CMS
used across all gov online estates. Yes there will be db integrations and
things but a single shop of web dev working for the gov would surely save
money.

They could get 3 whole websites and employ a 4th body to choose the best and
still do it cheaper than hiring the big firm in the first place.

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Jabbles
I know of instances where personal data is "password protected" in an Excel
file, saved to a memory stick and then _couriered_ to the destination.

The lack of technical knowledge prevents people from seeing it as problem.

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wisty
Government contracts - fixed price, big upfront design, and ever-shifting
acceptance standards (which the contractor will not have any input into). A
contractor has to charge 3-10X the price, just for the brain damaged way
decisions are made.

~~~
mgkimsal
Having done a bit of work for a state agency here, I have to say the "fixed
price" aspect is the most frustrating. Having to estimate the needs/demands of
a system 1-2 years ago, and budget for it _today_ , then earmark all that
money ahead of time... argh. It's a recipe for wasteful spending. Compared to
"just in time" philosophies of only paying for what you need when you need it,
current procurement and budgeting strategies almost _demand_ wastefulness be
an integral part of the process.

Combine this with a culture of "if you don't spend as much this year as you
did last year, you won't get all of the money you request" and we're in a
never-ending cycle of bad decisions.

~~~
_delirium
The U.S. uses pay-as-you-incur-costs type billing for some large projects,
exactly for that reason (hard to estimate up front, would have to overprice it
due to the risk), but I'm not sure it reduces waste overall. It provides a
different kind of incentive, since now companies like Lockheed have a monetary
incentive to drag projects on for years, overstaff them, etc. At least with
fixed-price billing they have an incentive to finish the project, since they
aren't going to get more money by dragging it out longer.

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arethuza
I honestly don't know who is worse, the companies who manage to fleece the
taxpayer this way or the idiots in the upper levels of the civil service who
don't really care because "it's just taxpayers money".

~~~
ZoFreX
Or the people that deliberately organised purchasing things in a convoluted
manner that channels taxpayer's money to a few preferred companies, in a
manner that while increasing our actual debt, puts it on different books, so
we don't look quite as in debt as we are.

~~~
gmac
In the UK, that would be PFI or PPP (Private Finance Initiative and Public-
Private Partnership)? These are indeed a dog's dinner... for which we can
blame only the people some of us elected.

~~~
jacques_chester
Here in Australia the latest version is to form a corporation wholly owned by
the government, to take on massive debts through that corporation, but then a)
refuse to release details of what it's up to, citing "commercial-in-
confidence" and b) leaving it off the government's balance sheet, even though
_everyone_ knows who the debt really belongs to.

The first example I saw was in the Northern Territory in 2000 when the Power
and Water Authority was "corporatised". Something similar is happening with
NBN Co, which while representing The Greatest Infrastructure Investment Evar,
will also apparently Cost Nothing, Honest.

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gaius
Windfall tax on Accenture, EDS, IBM Global Services and all the rest. Claw
back the _tens_ of billions of British taxpayer's money they've squirreled
away. Go after their shareholders too.

~~~
arethuza
How's this for a completely crazy idea - sack a few civil servents who have
been responsible for creating and managing such spectacularly awful contracts?

I know that traditionally amateurism and incompetence haven't been seen as a
barrier to a splendid career in the civil service, but maybe that should
change?

~~~
gaius
That too! Accountability for decisions is anathema to the unions however. They
will need to be broken first.

~~~
arethuza
Maybe the FDA (AKA First Division Association) should be outlawed then? Or
perhaps broken in the same way as the NUM....

<http://en.wikipedia.org/wiki/FDA_%28trade_union%29>

