Update Memorandum
Key Points
- The decant of GCHQ staff into the New Accommodation began as scheduled on 17 September 2003.
- Technical Transition has been delivered successfully so far: it is on schedule and still forecast to be within its agreed budget of £308.6 million.
Detail
1.This memorandum is provided to update the Committee on progress with the GCHQ New Accommodation Programme since the National Audit Office Report was published.
2. The PFI contract signed in June 2000 required the completion of the bulk of the construction works by 3 September and provided a bonus for earlier completion. IAS delivered the originally-contracted construction and fit-out work in late June, but the Independent Engineer required that a number of faults be rectified before the work could be accepted as complete. The delay in formal hand-over would have restricted GCHQ's ability to progress the technical fit-out necessary before the move of staff could begin. In addition, GCHQ required further work in the form of contract variations to be completed by IAS before the decant could begin. This further work was essential for the success of GCHQ's transition plans which could not have been foreseen when the PFI contract was signed.
3. GCHQ appraised the options available in these circumstances. The best value option was found to be to re-negotiate the early completion bonus with IAS to incentivise both rectification of the faults in a significantly shorter timescale than stipulated in the Project Agreement and completion by mid September of the critical contract variations raised by GCHQ. This option was negotiated successfully with IAS: they accepted an amendment to the project agreement under which they would receive a bonus payment appropriate to a late June completion date conditional on the completion of the remaining work by 17 September 2003. Completion was to be measured by a set of pre-defined milestones, independently verified by the Independent Engineer, with clear pre-agreed abatements in the event of unsuccessful or partial results.
4. The revised early-completion scheme was successful. IAS completed almost all the work required by 17 September and just over £100K was abated from the early-completion payment of £2.2 million for the outstanding work. As a result, the decant began as scheduled on 17 September.
5. In parallel with IAS completing the building, significant progress has been made on Technical Transition and moving stay. The IT in the new building was operational and connected to the Oakley Plot 2 infrastructure in advance of the first day of the decant. Roll-out of IT is keeping pace with the influx of staff at the rate of about 100 per week. The most challenging moves to the new building-the Sigint production areas-do not start until Spring 2004. Overall, Technical Transition is being delivered on schedule and remains forecast to be completed within its agreed budget of £308.6 million. There is still a great deal to do, but the early success is a testament to the thoroughness of the work done by the Programme team.
November 2003
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