The additional work exceeded the limit in the original NIRS 2 contract

2.10  When the Inland Revenue took over responsibility for NIRS 2 in April 1999, they commissioned a review of the system from PA Consulting. The aim was to establish whether it would be technically feasible to implement these major developments, in view of the system's previous record. The report, issued in July 1999, concluded that NIRS 2 was a robust and reliable platform, but that it was not yet sufficiently stable to absorb major change. It recommended that the Inland Revenue should carry out a detailed technical assessment of the options for delivering their future business requirements and that further changes to NIRS 2 should not be initiated until 2000, when stabilisation was expected to have been achieved.

2.11  The Inland Revenue formed a joint design team to assess the options with staff from the Department of Social Security and with technical support from Electronic Data Systems (EDS), their strategic information technology partners, and Accenture. Whilst this work was going on, informal discussions were held with Accenture to consider the possible options available should the results conclude that the changes required of NIRS 2 exceeded the annual maximum level contracted. The team considered the scope of the legislative commitments, the feasibility of delivering the commitments through NIRS 2 or through alternative means, and the risks and dependencies involved, in order to derive an estimate of the scale and optimum timing of future developments. Accenture and EDS supplied estimates of the staff days and function points required for development, including estimates of productivity. The Inland Revenue's operational research staff validated these estimates.

2.12  In October 1999, the joint design team concluded that new development work would require between 5,860 and 7,240 function points to be delivered between October 2000 and April 2002. As this exceeded the limit in the original contract of 2,000 function points a year, the Inland Revenue decided to examine ways of meeting the commitments arising from the legislative changes.