justsotax
Blogger
Share this content
0
8
1310

Is Jeremy Hunt right when he says

Is Jeremy Hunt right when he says

' it's completely normal for a contractor to fail to deliver on a major project' or is this just another example of an MP out of touch with reality when dealing with someone else's money?

Replies

Please login or register to join the discussion.

16th Jul 2012 10:52

Completely normal in *Government* projects

My experience of IT projects involving large sums of public money suggests that utter failure is a perfectly normal state of affairs. I see no reason to believe that such failures are confined to IT projects. Rewarding the contracting companies with huge payments for failure seems to be the accepted MO.

The clue is in your comment, "someone else's money". The officials aggrandize themselves with the size of their budgets. More spending = more power and more authority. Results are almost irrelevant hence no need to punish contractors for failure.

Thanks (0)
avatar
16th Jul 2012 11:07

Not just in the public sector

Tom,

 

IT failures on large projects are common in both the public and private sectors (see RBS, Sky's customer relations systems, etc for private sector examples) but I'd argue we hear more about them in the public sector due to better visability. It's also worth noting that public sector projects are frequently larger/more complicted than in the private sector. After all, how many private sector projects are there with 100 million user accounts? Yes, there's Facebook/Google, but they started off as simple, grew and don't promise accuracy (both of them rely on systems that tolerate failure). They're certainly not comparable to public sector projects at all.

 

However, I do think Hunt is completely out of touch. Yes, failure of some extent has to be accepted, but in things that are critical to the success of a project (eg security) you need to have multiple back up plans, and correctly incentivise contractors for success. From what I've heard so far, the contracts with G4S did not contain anything like the correct penalty clauses.

 

The private sector is great at efficiency, but the counterpoint to efficiency is effectiveness and robustness in delivery. Of course, it's a lot easier to specify efficiency (cost) in a contract - it's on the other measures that public sector contract negotiators fall down.

Thanks (0)
avatar
16th Jul 2012 11:13

Perhaps my question should be

is it 'acceptable'....to fail on such a grand scale....i do also wonder by using language such as 'normal' in this context shows the 'attitude' of our public servants to wasting/spending public money.  I also presume that the contract was worth £300mil partly because of the complex nature...

 

They have known about this gig for 7 years afterall..... 

Thanks (0)
avatar
16th Jul 2012 11:16

I have NEVER been able to work out

how it is that: -

Lawyers get paid large sums to draft contracts

Contracts prove to be flawed

Lawyers get paid large sums to sort out the mess.

Surely, once the contract is in place what SHOULD happen is: -

Spec changes, client pays

Costing flawed, contractor pays

Contract flawed, lawyers pay

SIMPLES!

Thanks (0)
16th Jul 2012 11:38

Ahhhh

But didn't some business chap say a good business encourages 'heroic failure'.

Thanks (0)
avatar
16th Jul 2012 11:50

Bob Diamond?....Rupert Murdoch....

Tony Hayward (BP guy) - hmmm....just begs the question as to what you mean by a 'good business'.....

Thanks (0)
16th Jul 2012 13:45

Gahh

It's going to bug me...  It was told to me as part of my ACCA (or maybe my degree) that successful businesses have... 7 common features?  One was heroic failure (my favourite as I am keen and enthusiastic, but prone to failure), the others were... I think relaxed atmospehere, ohohoh, 'stick to the knitting'.

I need to know who expounded this theory now!  Someone put me out of my misery,,,

Thanks (0)
16th Jul 2012 13:55

Peters & Waternan

NT

Thanks (0)