The £105m website
The recent report from the COI on the cost of government websites has caused much debate from independent bloggers to the BBC’s technology correspondent Rory Cellan-Jones.
General consensus names the Business Link website as the winner of “appalling value” with its reported three year bill from Serco and BT of £105,000,000.
As CEO of an SME agency that has delivered many sites for the Treasury (also featured in the report), CRB, DWP and NHS, I think I am in a good place to comment.
Whilst there is no excuse for the amount spent by HMRC on the Business Link website, I question the influence of UK (or is it EU) procurement methods in the final bill. The Business Link site was obviously commissioned through procurement and I would guess that HMRC have had at least three suppliers to choose from. The issue must then be that all the responses received were equally as expensive. There might even be a suggestion that Serco was the most cost effective bid!
So why so high? Anyone who’s ever completed public sector Pre Qualifying Questionaires (PQQs) and then Invitations to Tender (ITTs) knows the level of work involved. Frankly winning them is often above the ability of many able businesses. Responding to procurement is now so involved and in-depth that only the large ICT’s have reasonable chances.
It is a fact that such organisations have teams of staff devoted and experienced to the fine art of responding to the rigid formats. They are also very good at answering and meeting all the peripheral questions around equality, recruitment, 3rd party monitoring, project assurance, service delivery and security etc.
If you take Redweb, we have ISO9001, ISO27001, ISO14001, Investor in People, security cleared staff and ITIL and PRINCE2 methodology. It’s a high overhead and is definitely beneficial, but does require an ongoing commitment. I ask how many other 100 strong businesses have all these?
I am not stating that certifications and process isn’t important but to what level should the supplier be required to go before consideration? Often the level of diligence out-weighs the requirement being requested or at worse is used to just reduce the candidates at PQQ stage. How many agencies out there never get through? Public sector will not accept any risk in their relationships.
With this background the large ICT’s pitch and play the numbers game against each other on wins and loses. Their wins presumably covering the cost of the time and effort of the defeats.
In public sector, winning the procurement is everything as once commissioned organisations are able to use change management and the invariably open brief to add requirements to the original figure. It’s hard for the public sector body to argue as re-tendering and breaking the contract would look bad on both parties. Time is also a factor as procurement exercises take months. This coupled with the numerous overheads to monitor and control a project, it is not hard to see how the cost’s escalate.
Particular to web design, another issue facing smaller SME agencies is a tendency for public sector to package up everything into one procurement exercise. Websites get lumped with CRM or data repository work. Specialists like Redweb who can deliver exemplary websites can’t compete due to lack of skills in the areas outside our remit. Joint bids are hard to make work. This results in the “big boys” becoming the only option as they alone can offer all the skills, however with a premium attached.
Hopefully things will change. Frameworks seem to be more open to SMEs and we see a greater number coming through. I am also delighted to see in the new government’s pledges (Cabinet Office Structure Reform Plan – June 2010) a commitment to make public sector work more accessible to SMEs. This will hopefully be a pragmatic approach to procurement, allowing smaller businesses to participate.
So in conclusion, we (the industry) could all have done the Business Link site at a fraction of the cost but what we don’t really know was the extent of the deliverables? I believe a more flexible approach to its procurement would have been the answer. This would have lead to a greater understanding of the requirements, potential costs and best fit suppliers for the different components. Let Serco quote for all, but they would have needed to have proved their competitiveness against the individual specialists.
Moving forward I believe we need a happy medium of both “expectations of a suppliers failsafe/credentials” against the “requirements for the job in hand”. This will put a wider selection of able agencies in touch with the public sector managers and directors who use the services. It will provide opportunities to drive better value and common sense pricing at ground level. Today’s procurement processes typically pair public sector with the monolith suppliers for all services, which is not good for competition and innovation.
Public sector should actively procure smaller investigative phases to thrash out their needs and investigate across suppliers who they think can do the job best. The emphasis of upfront bureaucracy and dictatorial selection guidelines should be replaced by more accountability once the project is underway. It is the awarding department’s directors’ and project managers’ responsibility to drive value and ensure that budgets are met.
