“This is about the oligopoly: the cluster of big suppliers who have had it too good for too long.”
With that, the UK government revealed an unfortunately named policy of red lines for IT contracts: a £100M cap on contracts, mandatory recompetes, a moratorium on hosting contracts longer than two years, and a ban on integrators maintaining their own designs.
Policy-wise, that’s some pretty bold stuff. The rhetoric was even bolder. At the announcement in January, Chief Procurement Officer Bill Crothers was halfway to the ramparts: “It’s reflective of a monopolistic or oligopolistic behaviour. It is not acting as if they’re hungry and in a competitive environment. That’s appalling.”
I am refreshed. As we fiddle with IT Boxes and abortive procurement reform attempts, I’m envious of a government brave and maybe foolish enough to use blunt tools and blunt talk to effect change in a deeply broken system. When was the last time you heard invigorating broadsides like this from a procurement official in the US who wasn’t on his way out?
There’s a kind of genius to the simplicity of this.
We know that large-scale IT projects are nearly guaranteed to fail. It’s been like that for so long that we’ve grown inured to it. So when someone decides they’re special, and that unlike almost everyone before them they can spend £401M responsibly, they deserve some very grim scrutiny.
Automatic contract extensions and follow-on work would make any vendor lazy. It’s as true for system integrators as it is for mobile phone contracts. I’m looking at you, NMCI. Anyone who’s been halfway through Wealth of Nations knows this. So let’s force them to compete with their peers on a regular basis.
Likewise, the harms of hosting and cloud lock-in are hidden until you consider a migration, when it’s far too late to fix. Biennial review would encourage common-sense countermeasures from the buyer who wants to keep the options open and the prices low.
But my favorite red line is the most blunt: integrators may not maintain the systems they design. In any IT contract, there’s a strong incentive for the designer to create complexity and dependencies that guarantee follow-on work. This rule solves that by ensuring two things: that there’s a clear hand-off from implementation to maintenance, and that someone will maintain it in the first place.
In the last few years, government IT in the UK seems to have completely turned around. The tone has changed, the strategy has changed, and I’m very excited to see what happens next. I’m especially interested in the ideas we can steal, like 18F, which is modeled on the very successful Government Digital Service. I hope the red lines are next.
I’ll be in London the week of May 11th. If you want to meet up, let me know!