Buyers lead action against 'mediocre' DWP suppliers

17 November 2005
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17 November 2005 | Anusha Bradley

Procurement has been given responsibility to reverse the fortunes of IT projects at the Department for Work and Pensions (DWP).

A centralised Strategic Sourcing Directorate has been created as part of a four-year restructuring programme. It is responsible for improving supplier performance, which one procurement executive has described as "mediocre". The unit will have a special emphasis on IT.

The announcement came as the Cabinet Office launched a national strategy to tackle IT suppliers and aggregate contracts to give £1.3 billion back to the public purse.

Central government departments are expected to set out the operational details of the strategy by March, but government chief information officer Ian Watmore said IT suppliers will face "more scrutiny and intervention" under the seven-year plan.

He said best practice for supplier relationship management will be led by the Office of Government Commerce, but added that DWP's model was regarded as best practice.

Changes in procurement at DWP have began following the appointment of chief information officer Joe Harley last year. But work has kicked off with the recent appointments of Frank Tudor, director of partner management, and strategy director Philip Orumwense. Tudor admitted the "reputation of IT outsourcing is not great in government.

"No one was worrying about supplier relationship management before," he added. "I will look at the engagement of suppliers across the department to ensure we are obtaining the best possible value from them all." DWP outsources IT and spends £1.25 billion annually, most of which goes to suppliers.

In a high-profile outsourcing case in November 2004, DWP staff were unable to process pensions and benefits for several days after an IT failure took out a third of its network, supplied and managed by Electronic Data Systems (EDS).

DWP "realigned" its five-year £2.6 billion contract with EDS in August, imposing tougher penalties in an attempt to avoid further problems which have also plagued other Whitehall IT projects.

Tudor plans to judge suppliers not only on contract performance but also "softer" skills such as technical knowledge and dispute resolution.

"By engaging with suppliers and understanding their key skills we can improve this," he said. "We are the largest spending civil department and we are not going to accept mediocre service."







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