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Government caps most IT projects at £100m

A procurement policy notice outlines how departments handle IT projects in the future

The government has delivered a procurement policy notice (PPN) to all departments and agencies mandating that future IT projects are capped at £100 million.

In 2011, the government said projects of over £100 million would be monitored closely by the Major Projects Authority, but the cap will now prevent any projects of that size unless a strong case is given.

Forming part of its wider ICT Strategy, the government is attempting to move away from its traditional approach to procurement where large vendors are given expensive, lengthy IT contracts, and deliver projects that use multiple SMEs over a shorter period.

To help departments procure projects that come in under the financial cap, the PPN encourages that they re-use existing resources, including sharing space in existing data centres, use SMEs, as well as use open source where possible.

"The Government ICT Strategy, published at the end of March 2011 outlined a new approach to ICT procurement that improves contract delivery timelines and reduces the risk of project failure, enables greater use of SMEs, a much shorter timescale and lower costs to all parties," wrote Francis Maude, Minister for the Cabinet Office, in a foreword to the PPN.

"We will end the practice of attempting to cover every requirement in great detail and cover every legal eventuality in every project and contract, thereby increasing the procurement cost and timescales to all parties to an unacceptable level."

However, the PPN does create provisions for the government to undertake IT projects that exceed £100 million, suggesting that they may still appear in future procurements.

It states that all future IT projects should be designed with the presumption that they will have a total lifetime cost of less than £100 million, "unless a strong case can be made that doing so increases the overall cost to the taxpayer, notably increases the risk of failure or increases the security threat to the public body or government as a whole".

Another example of an attempt to reduce the complexity of IT projects includes the launch of the Cloudstore in February, the government's G-Cloud online appstore. Some 257 suppliers were named, half of which were SMEs.

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