§ Mr. HancockTo ask the Secretary of State for Defence (1) what the schedule is for the plan to outsource IT support and provision across his Department; [168293]
(2) what the projected budget is for the (a) outsourced support and provision of IT services for his Department and (b) cost of terminating existing contracts; [168291]
(3) what weighting will be given to the previous track records in other areas of the civil and public sector of the consortia that are bidding for the support and provision of IT services in his Department; [168290]
(4) what his contingency plan is for the possibility that an outside contractor wins the contract for the support and provision of IT in his Department and then fails during the term of that contract. [168289]
§ Mr. IngramThese questions have been answered with respect to the Defence Information Infrastructure (DII) programme. The Ministry of Defence is in negotiations with two potential commercial Delivery 1253W Partners (DP) for the provision of Information Systems services. The DII programme is currently in the Assessment Phase of the Smart Procurement cycle.
In terms of cost, the MOD currently spends over £450 million per annum on its information infrastructure. It is anticipated that the DII Public/Private Partnership contract will cost in the region of £4 billion over 10 years.
Track record is one of a number of factors included in the evaluation of bids. The Department's Supplier Relations Group has conducted research of bidding consortium members' performance both in Defence and across Government. In addition, the project has taken up references, by telephone and through visits, from existing customers of the key companies in the bidding consortia. Further reference visits will be conducted during the final phase of the procurement, targeting customers in receipt of a similar volume and range of services.
10 major legacy contracts for IT infrastructure have been identified and these will be subsumed within, or superseded by, the DII contract. The majority of these contracts are due to expire naturally over the next 18 months. An options appraisal has been conducted for each contract and an appropriate scenario agreed for each during subsequent mitigation planning. Where the risks, liabilities or known termination charges are unacceptably high, the preferred option is to allow a contract to run to expiry and then assimilate the activity within DII. Any contracts that currently lie beyond the next three years, which in the main are PFI contracts, will be subsumed on expiry. Residual liabilities will be assessed more fully following negotiations with bidders in the later stages of procurement but generally we would expect to be in no worse a position than now and would seek to be in a better position through negotiation.
Support to deployed operations will continue to be supplied by Service personnel. For all other elements of IT infrastructure provision and support the MOD will mitigate the risk of supplier failure by contracting with a consortium which will provide the services through a range of service providers. This will ensure that in the event that one member of the consortium fails, there is capacity available for another consortium member to pick up the service provision. In addition, the MOD will retain rights to step in and use its own staff or other third party contractors to remedy major service failures. Ultimately, the MOD will have rights to terminate the contract for material breaches in performance, with options to take services back in-house or contract with another commercial provider for their delivery.