3. The Department did not carry out a market survey to assess how much interest there would be in the Libra project. Competition is an important safeguard for value for money in a procurement contract, and market surveys can help to establish whether proposals are attractive to potential bidders. A lack of interest at this early stage would be a warning sign that a project might not be deliverable.
4. In the absence of competition it is essential that departments benchmark the prices offered by contractors. The Department did not examine ICL's financial model to assess the reasonableness of its bid, though the National Audit Office had already recommended in 1997 that departments should examine bidders' financial models.
5. ICL was chosen as the preferred bidder despite the problems the company was having with another government IT project (the Benefits Payment Card project). Knowing of these difficulties the Department needed to satisfy itself as to the technical competence of the bidder to deliver a project of such size and complexity. However, the possibility that the problems with the Benefits Payment Card project might have reflected on ICL's technical competence to deliver the Libra project was not adequately investigated. There needs to be more sharing of lessons and pooling of experience between departments, and the Office of Government Commerce should draw relevant examples to their attention.
6. A systematic and thorough comparison of realistic alternative options is required before a decision is made to adopt the PFI approach. A Public Sector Comparator- an estimate of what a project would cost if conventional procurement methods were used-should be one of the factors in such an assessment provided conventional procurement is a realistic option. In the Libra case, the Public Sector Comparator provided no useful information, since the Department had no IT department that could deliver a public sector solution.