7. ICL performed poorly on this contract. Some three months after contract signature it realised it could not use the software on which it had based its bid, and there was little continuity in ICL's management. As a result, ICL did not meet the target dates for delivery of the core application. In view of these performance weaknesses, the taxpayer should not have had to pay ICL more money than had been agreed in the original contract. When a private sector contractor accepts risks, it should bear the financial consequences if those risks materialise. ICL did not take responsibility for the risks transferred to it and could not deliver the project for the price it had agreed.
8. ICL recognised management inadequacies and dismissed some of its managers involved in the procurement and running of the contract. The Department suffered from a lack of professional and commercial expertise and management continuity. Some of the Department's staff were transferred and new management was brought in but no staff were penalised for inadequacies in their performance. If the quality of public sector management is to be improved and failures like Libra prevented, departments must get the right people in place at the start with the skills and experience to deliver major projects successfully and provide them with incentives to succeed.
9. Although ICL was in breach of the contract by failing to meet the contractual delivery date of July 2001 for the first site, the Department chose not to terminate the contract. It considered that such action might have led to costly litigation and counter claims from ICL. The Department might consider whether its lack of confidence in the prospects of redress has anything to say about the effectiveness of the court system, for which it is responsible.
10. The infrastructure element of the project increased in price from £94 million in ICL's original bid to £232 million in the latest contract, which is for a shorter period of service, albeit with some expansion in the scope of the requirement. The Department used independent consultants to benchmark the price, which was not tested in competition and appears very expensive for what is being provided. The Department was nevertheless unable to say how ICL's price for the infrastructure element of the Libra project was constructed and we remain unconvinced that £232 million was a fair price to pay. More thorough analysis is needed before departments agree to pay more than twice the tender price.