Monday, 23 July 2012

One Barnet Costs Out of Control

Back in  August 2010 Barnet Council issued a Delegated Powers Report, 1134,  for the award of the Implementation Partner Contract for the One Barnet project and was awarded to Agilisys/iMPOWER. (Mysteriously that report is now missing from the Council's website).  In that report the value of the contract was estimated to be in excess of £500,000. I raised this contract award at Business Management Overview and Scrutiny Committee on 13 September 2010 and it was also picked up by Cllr Jack Cohen who asked for the report to be called in. At the meeting Cllr Cohen asked for the maximum value of the contract but because this was declared to be exempt information, the public were forced to leave the meeting.

Subsequently the Barnet Bugle submitted a Freedom of Information request to ascertain this maximum value. Following an initial refusal and a request for an internal review, the response which came back eventually stated:

"The establishment of an Implementation Partner contract enables the provision of consultants for specific assignments based on end to end process of phased delivery requirements. This means that the forecast cost of  the contract cannot be fully predicted it will be in excess of £500,000 [in the first year of delivery with circa £2,000,000 identified as potential contract delivery cost over a three year period.]" The section in brackets is the important information which was originally withheld.

The call in was reviewed by Cllr Dan Thomas who had originally signed off the DPR and he said he had decided to retain the contract without amendment - so from his point of view Cllr Thomas was happy with the contract as it stood.

Now just two years on, the bill for Agilisys at at 31 May 2012 is a shade under £3 million  (£2,972,667.37) £1 million more than forecast and there is still a year to run on the contract.

I don't know who is keeping tabs on this spending (other than me) but if I had signed off a contract that was running 50% over total budget with a third of the contract term still to run, I would be kicking up merry hell asking what on earth was going on.

During the Inspection of Accounts I did try and review the details on the invoices submitted by Agilisys and reconcile them to the contract but according to Barnet Council that information is commercially sensitive so both invoices and contract were excessively redacted to the point that I could not see how many days they have billed or what daily rate they have applied.

I have raised this matter with Grant Thornton, the Council's external auditor, as I wonder if this additonal £1 million should have been spent on this contract without any subsequent authorisation or if any further spending with Agilisys is ultra vires. I will have to await a response from Mr Hughes but irrespective of the outcome it illustrates that the Council's "relentless desire for efficiency" doesn't appear to extend to monitoring supplier payments.

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4 comments:

  1. jeffrey23 July 2012 at 18:28

    I'll comment: once again, assiduous work uncovering what appears to be another scandal. With more thanks than I can recount for all your work.

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  2. Anonymous23 July 2012 at 21:53

    Of course we have to also consider what the original contract was advertised as in terms of value. Different companies would after all be more interested in a larger value contract and therefore this type of overspend can skew the competition and the level playing field approach.

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    1. Mr Reasonable23 July 2012 at 22:10

      You are right anonymous, a £4-5 million contract (as that is what it is likely to end up) may have attracted different competition and for example the scoring matrix might have been quite different. The quality scores of supplier C and D were exceptionally close to Agilisys and a small difference on the pricing score might have resulted in a completely different implementation partner.

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  3. Anonymous24 July 2012 at 18:35

    I believe this was probably tendered under (then) OGC framework RM662 ‘Management Consultancy and Accounting Services’ which would also have required a 30% weighting being given to whole life costs (note- not just tendered consultant rates) if the whole life costs have escalated then the evaluation must be flawed and contestable by any interested party as the original evaluation could not have considered whole life costs by definition. The other element of interest is the Impower part who are the organisation that have actually taken the majority of the fee( I would imagine) and their relationship with Agilisys and how this fits in with the original framework terms and conditions. Government Procurement Service are usually open to FOI around transparency of contracts and as Agilisys will pay them a proportion of fee (if this indeed was let on framework RM662) also have audit rights of the arrangements with Barnet should they be made aware of any perceived concerns in respect of basis of evaluation or scope change.

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