Home Office to pay £224m (incl. £50m fine) to Raytheon for e-Borders project failure
£385m wasted in total on ‘lipstick on a pig’ project at Border Agency – commentary on today’s massive fine.
The need for flexible contracting arrangements is of paramount importance in agile project management. One model that can provide fine control and agile responses are time and materials framework contracts. These simply provide a mechanism for employing specialist contractors by the hour. However, great care must be taken to monitor the contractors. The light-tight model (‘light’ on detail, ‘tight’ on governance) must be respected.
Update on August 18, 2014: It was announced that an independent tribunal has ruled that “UKBA officials failed to brief the home secretary on whether Raytheon had a case.” Raytheon was awarded full costs of £224m including £50 in damages:
Update on March 26, 2013: It was announced that the UK Border Agency is to be ‘scrapped’: http://www.bbc.co.uk/news/uk-politics-21941395
Update on July 22, 2014: The NAO report says that “A new Immigration Platform Technologies (IPT) programme is replacing ICW and is trialling an Agile approach, focusing on incremental improvements”
An example is today’s report on the £28m waste and year’s delay to the UKBA’s newest IT project.
The UKBA has an annual spend of over £2bn, and in 2009 began a massive reduction in its workforce of from 22,580 to 20,469 staff over that year, with a further reduction of 3,500 planned for 2015.
The bulk of future expected savings, and improvements in service delivery, depended largely on a BPR exercise to transform casework procedures, which cost £1bn a year, and also on the successful delivery of the £385m Immigration Case Work (ICW) project initiated in 2009. Both these measures would allow consolidation of the 4m applications that are received every year for temporary migration, permanent migration and asylum, to be handled at ‘centers of excellence’ in the UK and to reduce the number of overseas visa processing centers from 130 to 25.
The £385m ICW project was planned to be rolled-out in 14 separate deployments, so the project board set up a contract through a framework agreement that allowed for a time and materials approach to the work. This approach requires careful monitoring and approval of contractors to ensure that it does not become a license to print money. However, the project board did not monitor the situation carefully enough. They did not:
¨ Challenge the IT contractors about their use of resources
¨ Ensure that implementation was being planned with front-line staff, who were confused about the timing of releases
¨ Carry out any in-depth discussion of spending in their board meetings
¨ Coordinate the work of different development teams that were preparing different releases of software in parallel
¨ And they were over optimistic in assessing the project status which was perceived as green status in 2011, but only updated to show the real red situation just ahead of the arrival of NAO auditors in 2011.
Just as with the FBI Sentinel project, there were some initial successes with easy to implement lipstick on a pig functions such as a new search function and a question and answer module to guide caseworkers through the regulations.
But in 2012 the both the ICW and the parallel BPR exercise were £28m over budget and the optimistic expectation of annual savings have been revised down, from £139m to £106m. As a result, a new project executive was appointed who admitted that the release schedule was unrealistic and that the project was not going to deliver until 2016.
This case demonstrates the need for care when managing projects directly. Contracting for incremental development using a time and materials approach can work. With care, the burn rate of the team can be controlled – in this case spend was only 12% higher than expected. But there are responsibilities that come with direct control of a project.
Top management must not shirk their responsibility to execute robust tight top management control.
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Wernham, Brian (2012): Agile Project Management for Government – Leadership skills for implementation of large-scale public sector projects in Months, not years. New York, London: Maitland and Strong www.maitland-and-strong.com
UK NAO (2012): National Audit Office Report (HC 467 2012-2013): The UK Border Agency and Border Force.
© Brian Wernham 2012 CC BY-NC-ND