As best I can understand it, there was a flaw in the business case failing to recognise the risks of incompatibility the EU rules. That meant the targets set for the contract with the IT supplier couldn't be met, and as a result of the supplier not being able to achieve the targets the contract was terminated. This was a £500m initiative how could they have got it so wrong? The Inspector has a lot more to say but that's sufficient for our purposes.
Too often it appears business cases are constructed to support 'a good idea' and lack robustness. Business cases have to be more cynical and adopt a more risk based approach. But those charged with constructing the business case are more often than not those who have a vested interest in the project going forward - it is not CV enhancing to say 'stop this madness now'. However, in the e-Borders example it looks as though the 'Home Office' failed to have an awareness of the external EU environment - how could that have happened?
One of the purposes of the Gateway Review process was to bring external scrutiny to projects through the eyes of 'critical friends'. The biggest failure of this initiative, too me, wasn't the failure to recognise the impact of the EU rules, but the failure of the external scrutiny to ask about the external environment and how those rules could impact on the proposals.
So, core lessons:
- Be more cynical in the development of business cases - they should be more robust;
- Assume that those producing the business case will benefit from external challenge and make sure that challenge is robust;
- Recognise that business cases are about risk management.
So what's all this got to do with procurement? We a contract was entered into based on a flawed business case and that contract had to be terminated because the performance levels were unachievable. Had Procurement professional had a role in challenging the business case some of those weaknesses may have been averted. Had Procurement been able to challenge the performance standards being set for the contractor, more realistic standards may have been set and no doubt that would have been reflected in a lower contract price. Had Procurement involved the market in the discussions about the business case, the market may have highlighted the risk related to EU rules. If only ... the Inspector may have been praising a good procurement as opposed to the newspapers reporting a £500m waste of money.