27 During the procurement stage of the project, risk monitoring and control involved mainly discussion between the purchasers' joint procurement team and the bidders about how to mitigate the risks identified in their proposals and demonstrations. By the time that the contract was awarded in May 1996 the register for Pathway still carried six risks that had either high probability or high impact. The procurement team downgraded several major risks because the risk of late delivery was seen as falling on the supplier through the payment terms of the Private Finance contract. In fact, delay, whether caused by a supplier or by a purchaser, would cost the Department of Social Security's business, and therefore the taxpayer, some £15 million each month in terms of continuing fraud and additional administrative costs. It is evident from subsequent events that certain risks the purchasers team had identified in Pathway's proposal and demonstration and declared as cleared in their final risk register for the Pathway proposal in March 1996, remained areas of difficulty. Risks to the timely delivery of the CAPS programme, also identified at that time, were subsequently addressed by the February 1997 re-plan. The key risks are described in Appendix 7 of this report. Pathway told us that they had not seen the purchasers' risk registers after the award of the contract, and they were surprised that the purchasers had assessed these risks as being high. The Department confirmed that while risk registers were not exchanged, joint discussions around risks were a continuing and regular part of the project management process.
28 After the contract was awarded in May 1996 the purchasers assembled new risk management arrangements by building on the earlier work of the procurement team. The contract was not specific about the reporting obligations of Pathway to the purchasers and vice versa. For example, there was no requirement on Pathway to supply their own risk registers or other internal project management documentation. Reporting took the form of summary presentations and discussion at the Project Board, and further joint planning and progress meetings at working level. The information that the purchasers required for assurance was not defined in the procurement phase or reflected in the management arrangements. Consequently the Department felt under-informed about progress, while Pathway told us that it felt subject to interference.