NAO: FireControl project ‘a comprehensive failure’

The government’s abandoned FireControl project was a “comprehensive failure” that has wasted £469 million and delivered almost nothing, according to a catastrophic verdict delivered by the National Audit Office.

In a newly published report, the NAO said the project, outsourced to EADS, was “flawed from the outset” and had wrongly sought to impose a system that firemen and women did not want. FireControl had been intended to merge 46 local fire control centres to nine ‘state of the art’ centres linked by advanced IT systems.

The report drew an angry reaction from Richard Bacon, an MP on the Public Accounts Committee which will hold a hearing next week into the findings.

Bacon described it as a “pet regionalisation project” of Lord Prescott, its originator – and likened it to the £11.7 billion NHS National Programme for IT, which was recently condemned by the NAO as not ever able to deliver value for money. “If Fire and Rescue Services do collaborate in the future, it must be their decision based on a strong local case, not because of Whitehall diktat,” he said.

The NAO said the new government had been right to “cut its losses” by terminating the contract with EADS in 2010. But it expressed alarm that in spite of all the money spent, no IT system was delivered, eight out of nine new regional control centres remain empty and a lease will have to be paid for each of them for the next 24 years.

From the start of the scheme, the Department for Communities and Local Government had “tried to impose a national control system, without having sufficient mandatory powers and without properly consulting with the Fire and Rescue Services”, said the NAO. “These local bodies prize their distinctiveness and the freedom they have to choose their own equipment.”

The government had “rushed the start of the project” and committed itself “on the basis of broad-brush and inaccurate estimates of costs and benefits and an unrealistic delivery timetable”, the NAO said. It had also agreed an “inadequate contract” with EADS.

The failure of the project demonstrated a host of lessons in writing contracts, the NAO said. Contracts needed to “clearly define accountabilities, responsibilities and the requirements which if not met will constitute material breach”, as well as “retain departmental ownership and accountability for the risks critical to the project’s success”.

It also demonstrated lessons in supplier management. The department had “failed” to properly manage EADS, and the relationship between them became increasingly “adversarial” during the course of the project, the NAO stated.

As with the NHS National Programme, suppliers were only paid according to delivery. With FireControl’s lack of interim milestones for EADS to hit, the supplier became embroiled in “cash flow difficulties”.

Last year, the government sought advice about terminating EADS’ contract, and lawyers warned that it would incur “substantial” penalty costs. However, the government then set a series of milestones with EADS, which were missed and documented.

The government placed the supplier in material breach of contract in November last year. It received a settlement of £22.5 million from EADS, which meant it had paid a net sum of £11.7 million to the supplier.

The NAO recommended that other government departments could take similar steps if they decided they needed to terminate a contract – by acting to “sharpen short-term contractor performance management, by using milestones” to demonstrate performance shortfalls, and putting in place “a strong negotiating team, combining experience of working with the contractor and wider expertise”.

The Fire Brigades Union condemned the failures highlighted in the report. General secretary Matt Wrack said the taxpayer had been “taken to the cleaners”.

“Millions of pounds were thrown away on management consultants, regional project directors, change co-ordinators, project assurance directors, PR and human resource directors,” he said. “Throughout it all no one listened to what the professional firefighters and fire control staff were saying.”

Photo credit: Eddiedangerous

Copyright © 2011 IDG Communications, Inc.

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