2.56 ICL's initial price for the revised contract was £250 million but the Department succeeded in reducing it to £232 million. The estimated value of £232 million includes £31 million paid under the existing contract for the delivery and operation of the infrastructure services already received by Magistrates' Courts Committees. The Department employed independent consultants to conduct a "should cost" benchmarking exercise. ICL's base cost of £189 million was within the consultants' "should cost" range of £178 million to £194 million (excluding interest, risk and profit).
2.57 The contract includes milestone payments of £46.4 million (including the milestone payments made under the original agreement) for successful implementation of the enhanced infrastructure. The Department and ICL also agreed a financial model which contained a forecast profit of 7.2 per cent. The Department would share in profits in excess of nine per cent, the share increasing as the amount of the excess profit increased. Total clawback on profit would have a cap of £20 million over the life of the contract. The limit of liability in a termination scenario would be £60 million or (if higher) 125 per cent of charges in the previous year.
2.58 ICL based its initial costs on assumptions that it would provide 5,000 new workstations and take over up to 3,500 existing workstations in the Magistrates' Courts Committees. During the renegotiations in 2000 ICL sought to replace the commitment to transfer existing workstations with an approach where it would provide new standard workstations to all users. The Department agreed and the number of workstations was recalculated resulting in a revised requirement for 8,000 work-stations plus 1,500 for in-court computing. The Department later had to revise that estimate further when it became aware that the information on which it was based (supplied by Magistrates' Courts Committees) was for full-time equivalents when part-time employees also required work stations, together with a further increase as a consequence of the transfer of enforcement from the police to the courts. The Department included a requirement for 11,000 workstations as part of the Memorandum of Understanding negotiations in 2001. Some £10 million of the increased contract price is also due to other enhancements of the infrastructure.