Universal Credit's contract management seems lost in space

I doubt if anyone truthfully expected the NAO Early Progress Report on Universal Credit to be singing its praises – life just isn’t like that. However, tucked away within the woes of the implementation are the added miseries of procurement and contract management.

Universal Credit isn't only one of the Government's flagships, it is one of the Cabinet Office's 12 major programmes - as such it is critical that it acts as a 'how to' exemplar. 

It is hard to believe that a more holistic approach to procuring the IT systems wasn’t pursued. That failure contributed to £34m of new assets being written off. Serious questions should be asked to establish if that £34m write-off could have been avoided, had the procurement approach been to look over the life of the programme as opposed to a narrow pilot. Did the suppliers warn of this potential waste?

Then we see a recommendation:

The Department should improve its ability to challenge suppliers and reduce its reliance on suppliers for important decisions (p.10). 

You will recall the tough talking of 2010 when Francis Maude summoned some of the top suppliers and read the riot act
- how effective was that in the long-term if departments still appear to be the weaker partners? Equally, tough talking is all well and good if you have in place the right governance, clarity of what you actually want to procure, risk management and contract management systems.


But let's consider some of the issues which the NAO have highlighted:

Inappropriate contractual mechanisms: charges were on the basis of time and materials, leaving the majority of risks with the Department.

Inadequate controls over what would be supplied, when and at what cost because deliverables were not always defined before contracts were signed. 

Over-reliance on performance information that was provided by suppliers without Department validation. 

Weak contractual relationships with supplier, the Department did not enforce all the key terms and conditions of its standard contract management framework, inhibiting its ability to hold suppliers to account. 

It doesn't appear that DWP created the right environment for procurement success - come to think of it, did anyone actually define what procurement success for Universal Credit would look like? The four issues highlighted above are not rocket science, they are not only to be expected of exemplars, they should considered foundations. I have discussed many times about the need to put in place procedures and stick to them - who will be accountable for the non-adherence to agreed systems?

But I think we may also be seeing a revisiting of previous problems. Remember the NHS IT system - accelerated by a political desire to get it in place as quick as possible. Oh yes, and the Blackberry's and mobile technology for the police - again driven by a 'how fast can we get it' strategy. Public procurement practitioners need to be better in saying "we need to take our foot of the accelerator or there's a very serious risk of compromising success and wasting money". 

Alongside the basics not appearing to have been applied on Universal Credit procurement, there appears to be an absence of strategic procurement governance - where was the external scrutiny, the strategic leadership and critique of procurement. Get those basics right and you may you certainly increase the probability of success and avoiding the pain of reading your case study in an NAO report.