7 This Gateway Review was conducted towards the end of the negotiations with ICL during the period when the Memorandum of Understanding was in force. At the time the Department was considering various options for continuing with Libra.
8 The review confirmed that the proposals that had emerged from ICL appeared to be substantially more costly than the initial proposals, such that it was not possible to demonstrate value for money and affordability for ICL's main option. It identified that ICL's proposed contract cost for an agreement up to 2007 was £384 million, and would have been higher but for the transfer of certain risks and costs back to the Department, some minor reductions in functionality and a reduction of the term of the contract. The review also noted that the substantial delays in the development of the core application had damaged the Department's view of the credibility of the supplier.
9 The review team considered that ICL had made too many mistakes early in the life of the project, including poor requirements analysis, early nugatory product development, unrealistic initial costing, frequent changes of personnel and inadequate business and technical line management. However, the review team visited ICL and was impressed by the progress made on the core application, but considered more needed to be done, as navigation through the product was uncertain.
10 The review team concluded that ICL should continue to supply the infrastructure but that continuation with ICL for the core application was untenable on grounds of affordability, value for money, and lack of confidence in the supplier. One of the current legacy systems, EQUIS, provided by STL, provided a credible and robust medium-term solution to the requirements for a common core application. This solution offered, on the surface, reasonable value for money compared with the ICL proposals and industry benchmarks. However, the cost of integrating the STL system across the STL infrastructure was not known. The review team also felt that the capability and resources of STL single-handedly to manage the development and roll-out of its applications across the whole Magistrates' Courts Committee community was likely to be inadequate.
11 The review team made the following recommendations:
■ The Department should determine whether the medium-term needs of all the Magistrates' Courts Committees would be fully satisfied by a combination of the systems provided by ICL for the infrastructure and the EQUIS application to be supplied by STL for the core application.
■ The procurement of the STL application should be sought in conjunction with a major systems integration company.
■ The Department should proceed with the roll-out of the ICL infrastructure. However, the risks needed to be recognised and firmly managed. In particular, it was the review team's view that the current offer from ICL of £250 million for the infrastructure represented poor value for money. The review team recommended that this poor position should be used to justify vigorous negotiation with ICL in an attempt to reduce the cost of the infrastructure, which it believed to be too high. Furthermore, in view of the review team's finding regarding the rigid approach of ICL to change, and the likelihood that it would seek additional money at every stage of the integration of the core application with the infrastructure, the infrastructure contract would require careful contract management. It recommended that the size and skill of the current intelligent customer function in the Department be maintained at a high level or even enhanced.