DVLA pays 33 million pound to change IT supplier

The DVLA have had an extraordinary press recently, in fact it could be described as moving from one disaster to another. Now it seems that they have paid £33 million to change their computer supplier, the DVLA estimated it would be half of that cost.

However, even within government organisations there are people who had seen enough to realise that there are things that the public should be aware of, which is how this story comes about.

The whistle-blower said: 'The Office of Government Commerce warned the former chief executive and board that they were not satisfied the
Pact contract could show it could achieve value for money, but the DVLA went ahead anyway.

'The new chief executive Noel Shanahan, who took over at the beginning of this year, has just written to staff to say he has managed to renegotiate that contract in some small ways, but it is shutting the stable door.

'If you review the DVLA annual report after the contract was let, you'll see that the DVLA paid £33m just to transfer their IT systems from EDS to IBM/Fujitsu, including £5.6m to reorganise the [DVLA] IT department.'

These findings show that there are some serious problems within the DVLA, which is why the House of Commons Transport Committee, who strongly criticised the way that the DVLA computer supply deal had been handled, has looked at the deal.

The House of Commons' Transport Committee said: 'An outline of some of the spending decisions taken by the Driver and Vehicle Licensing Agency was included in the previous section on administration costs.

'The largest item here was the £33m transition costs for a new partnership deal with IBM and Fujitsu to develop agency services.

'We were told: ‘Business Plan forecasts for 2002-03 were prepared well before negotiations with suppliers had been concluded, so there was a range of expectations relating to the different possible outcomes. The range estimate for transition was between £13m and £29m. From this the agency used a lower quartile estimate of £17m for the purposes of the Business Plan'.

'The final transition cost was £33m, nearly twice as much as budgeted.'
In response to the findings, the DVLA only had this to say:

A DVLA spokesperson said: 'The current IT supplier contract was awarded in 2002 as one of the first IT partnership agreements in Government, and as such was subject to scrutiny and approval.

'Earlier this year we took advantage of a contractual opportunity to re-negotiate the contract delivering best commercial terms.'