3.16 The Agency are in a strong position as the company's only customer of substance. This provides the Agency with powerful bargaining leverage that is supported by specified service levels and credits for non-performance. The initial service levels specified by the Agency in the contract were, however, too abstract for meaningful measurement.
3.17 When the partnership was first proposed, the Agency did not have service levels measuring the performance of the in-house IT services unit. By the time the contract was signed the Agency had been unable to specify the service levels that they wanted Radio Spectrum International to meet. Instead, the contract included high level strategic service levels from which the Agency and Radio Spectrum International were to derive detailed and quantifiable service level agreements during the proposed yearlong transition period. Agreeing measurable service levels took six months longer than envisaged. The Agency were in a stronger position to protect their interests in relation to the performance of the delivered IT services before negotiations with CMG commenced than after the contract was signed. The Committee of Public Accounts drew a similar conclusion in their seventh report of session 1999-2000, "Home Office: The Immigration and Nationality Directorate's Casework Programme" (HC 130).
3.18 The contract requires Radio Spectrum International to submit annually a service improvement plan, but there is no simple contractual remedy against the company relating to its failure to comply. The risk that the provision of services could stagnate is, however, offset by the Agency's right to test annually the value of all services provided by the company and by the Agency's right to tender openly for all other services. The Agency received the draft of Radio Spectrum International's first service improvement plan during Spring 2000 and are discussing it with Radio Spectrum International. These discussions will consider how to achieve measurable improvements.