Projects facing compulsory reviews

1 March 2001
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01 March 2001 | David Arminas

Major government construction and IT projects are to undergo mandatory procurement reviews as part of the battle against cost over-runs and embarrassing IT failures such as the Passport Office computer system.

Gateway reviews, which will happen under the aegis of public-sector procurement body the Office of Government Commerce (OGC), will ensure that senior officials and purchasing directors remain firmly in control during a project's progress, according to Peter Gershon, the OGC's chief executive.

"They will help to ensure that the wide variation in outcomes we have seen in the past, when too many projects have run over budget, over time and not delivered the planned benefits, will become an increasingly less prominent feature of the government landscape," Gershon said at the launch of the reviews.

The reviews have five stages, or gates: justifying the business case; approving the purchasing method; approving award of contract; testing whether the project is ready to begin; and identifying whether it has delivered the intended benefits.

Pilot reviews on projects worth £3 billion have been running since May and are expected to save around 5 per cent of costs over the life of the project. They include construction of a £30 million school in a south Wales valley town, a £450 million HQ in London for the Home Office as well the Prison Service, and an electronic tendering system for central government.

Gershon, who was chief operating officer at BAE Systems, said the process was a dash of private-sector procurement rigour adapted for Whitehall use.

The reviews would be helpful in large projects that carried risks, said Mukund Patel, head of architects and building at the Department for Education and Employment. "It is absolutely right that the money is used properly and so learning from the private sector is crucial."

The reviews were "sound public finance as well as sound commercial sense", said Andrew Smith, chief secretary to the Treasury. "Gateway is not designed simply to rescue projects which are in difficulty, but is involved throughout [their] life."

Smith said the reviews were to stop situations developing such as London Underground's Jubilee line extension, which was 18 months late and £1.5 billion over budget, although these were the exceptions and not the rule.

SMmar2001

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