Process

7.42  The non-PFI procurement options to be set out in the guidance will:

•  offer a level of flexibility appropriate to the specific type of IT project being procured;

•  ensure an optimal level of risk transfer to achieve value for money for the public sector given the lack of available third-party finance;

•  tackle specifically the handling of IT integration risk;

•  address the questions of when it is appropriate for the public sector to own IT assets and what appropriate levels of contract termination costs; and

•  take into account the capital and operational constraints of the private sector.

7.43  This reform should ensure that more IT suppliers are encouraged to bid for Government business. By encouraging greater market access, the Government aims to create the conditions for more competitive choice, thereby delivering good value for money in procurement.

7.44  The consequence of these proposed changes will be to provide forms of contracting and financing that can be used as part of the Government's overall agenda for tackling the weaknesses in IT-embedded programmes and projects, and ensuring successful delivery through the use of Best Practice.

7.45  The process of drawing up the new guidance will involve consultation with both the public and private sectors to ensure the new models are robust and satisfactory. Once the guidance is issued, it will be applied by OGC as part of its wider remit for improving the effectiveness of government IT. HM Treasury will remain responsible for advising Departments on any financial dimensions of IT projects.