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Contents
Page
1 Introduction ; 2
2 Summary of Findings
3 History of the Project 4
4 The Contract 6
5 Defaults and Causes 7
6 Relevant Documents 14
Appendix 1 Terms of Reference 15
Appendix 2 List of interviewees 16
Appendix 3 List of documents reviewed 17
Appendix 4 —- Relevant contract-clauses and schedules - 19
Yaw an rout & Yorue perks , 0 Gare
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41. Introduction
101 The Sponsors of the BA/POCL payment card programme, the Benefits Agency (BA)
and Post Office Counters Limited (POCL), have requested Bird and Bird to conduct
an independent review of the programme. The review was carried out by Andrew
Davies and Andrew Wing of Project Mentors, under contract to Bird and Bird. This
report documents the findings of the review.
102 The Terms of Reference were contained in a note prepared by Bird and Bird on 6
February 1998, attached as Appendix 1. The task was specified as:
The Consultant will analyse the defaults by any party to the Related Agreements and
analyse the causes of those defaults. In particular the Consultant will review whether
the Authorities have caused or contributed to a default on the part of Pathway. This
assessment of past responsibility will be used to inform future negotiations with
Pathway.
It was agreed that the review would not access Pathway’s staff or documentation,
but would be based on discussions with Sponsor and PDA staff and relevant
documentation held by them, including Pathway documentation.
It was also agreed that the Consultant would concentrate on the period after the
contract re-plan in February 1997, as the Sponsors recognised that they had
contributed to the delays that caused that re-plan.
103 The review was carried out by interviewing Sponsor and PDA staff, a list of whom is
attached at Appendix 2 and by reviewing documents, a list of which is attached at
Appendix 3. Detailed notes have been prepared of all interviews and of relevant
points in the documents. These notes are held by Bird and Bird in case they are
needed in the future.
104 This is an interim draft version of the report, prepared before completion of
interviews and document reviews. The contents of the report may change following
the completion of this task. This paragraph will be deleted from the final report.
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2. Summary of Findings
201 We must stress that the opinions expressed in this report are based on the
interviews we held with PDA and Sponsor personnel and on our reviews of the
documents made available to us by those personnel. We have listed the personnel
and documents in Appendices 2 and 3. We have not met Pathway personnel or
reviewed Pathway documentation, other than documents held by the PDA.
202 - The BA/POCL payment card programme is a very large and complex Information
Systems programme.
203 Pathway is required, under the terms of the contract, to deliver services to meet the
specified requirements in accordance with the specified solutions and to develop the
specified services.
204 The Sponsors are required, under the terms of the contract, to provide all
information, services, facilities and responses designated as their responsibilities and
to use all reasonable endeavours to perform these to any agreed timetable.
205 It is our opinion that Pathway seriously under-estimated the effort and time needed
to develop the services when they prepared their proposal and did not recognise this
under-estimation in the period from May 1996 to February 1997, when the contract
re-plan was agreed. Pathway now appear to have recognised that the effort and time
were under-estimated and have stated that much more effort and time is required to
complete ‘new' release 2. They have not yet finished the planning and estimating of
‘new’ release 2+, which will complete the development of the contracted functionality.
206 It is our opinion that Pathway have been responsible for the delays to the
programme, since the re-plan in February 1997, that caused the November 1997
breach, by not allocating sufficient resources to complete their contracted obligations
within the agreed timescale. Pathway have made no documented claims to support
any verbal assertions that changes in requirements have impacted their ability to
meet the timescale.
207 A secondary, and, in our opinion, relatively insignificant, cause of the breach is
delays resulting from slow resolution of issues. Any programme of this type will have
a multiplicity of issues that require resolution and the time to achieve such resolution
needs to be allowed for in the planning and estimating of the programme. We do not
believe that Pathway allowed sufficient time for this activity in their estimates.
Pathway have made no documented claims to support their verbal assertions of
delays resulting from slow issue resolution.
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History of the Project
The history of this project is a long story which has often been told. We do not need
to repeat that exercise. There are, however, a number of important dates which are
relevant to our review and we document these below.
In 1992-93 the Sponsors, BA and POCL, worked to develop a new approach to
move away from paper-based authorisation of payment of benefits. In 1994 a joint
programme was set up to develop an approach based on using a plastic card for
payment authorisation and a advertisement was placed in the European Journal in
August 1994.
A lengthy procurement process then followed, concluded by the signing of three PFI
contracts with ICL Pathway on 15th May 1996. The contracts laid out a short
timetable, with the national roll-out to all Post Offices scheduled to start in June
1997. The Programme Delivery Authority (PDA) was’ set-up to manage the
programme for the Sponsors.
The contracts were signed on the basis of requirements prepared by the Sponsors
and solutions proposed by ICL Pathway. A process was then initiated to ‘drop-down’
these requirements and solutions into service reblisearénts, a process which took six
months against the planned three. While the first deliverable, an ‘Initial-go-live’
system supporting payment of child benefit in 10 Post Offices, went live on schedule
in October 1996, it was soon realised that the planned timetable was not achievable.
The Sponsors, Pathway and the PDA co-operated to develop a new timetable, with
the start of national roll-out scheduled for November 1997 following the completion of
a Live Trial at 200 Post Offices by 21st November 1997. This was agreed in
February 1997 and was detailed in Master Plan Version 3, issued in April 1997.
An early deliverable was Pathway release ‘ic, a version of the system based on the
Benefit Payment System (BPS) and suitable for roll-out to 200 Offices for payment of
Child Benefit. This was scheduled for release on 30th June 1997, but suffered three
slippages before being released on 2 November 1997, 18 weeks later than planned.
By.Jdne 1997-it was recognised that the dates for subsequent releases would slip by
more than the slippage of release 1c. A process of re-planning commenced, which is
still not completed at the time of writing (March 1998).
There followed a set of reviews of the Programme (PA Consulting), the PDA
(Internal), POCL (Internal and French Thornton) and Pathway (Internal), resulting in
proposals for changes to the organisations of the various parties in the project. The
implementation of these changes is still in process. oy > yom
se”
Pathway have now proposed a plan which envisages a release/2 in October 1998,
but the Sponsors do not believe this to be realistic and have suggested that January
1999 appears more achievable. No date has yet been proposed for release 2+,
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which is to complete the contracted functionality. Pathway have also made some
commercial proposals, to improve the financial implications of the project for them,
which are-being-considered=Pocrchare—tekedh Cee wt: cael ke
7
310 As is to be expected with a project of this size, there are many issues which have
arisen. The most important of these are considered to be:
¢ The specification of requirements and solutions has generated a very large
number of ‘agreements-to-agree’ (A2As), ‘Contracting Authority Responsibilities’
(CARs) and ‘Change Control Notices’ (CCNs), which have taken a considerable
time to agree, with a number still to be agreed.
There has been much debate on security controls and procedures, with Pathway
alleging that ‘Security requirements are complex and demanding’. The BA/POCL
view is that security requirements are reasonable, being based on BS7799 and
BA and POCL security standards.
© Training tequirements and soluti nS were expressed-véry briefly and Pathway
née eSp
havé put forward‘proposals to ret these that are urfacceptable to the Sponsors.
* There has been much debate about the Estate of the 19000+ Post Offices.
Concerns relate to such aspects as the space for the equipment, the electrical
supply, the physical environment, Health and Safety aspects of the installation
and the availability of ISDN network connections. Problems have arisen with the
installation of equipment at the 205 offices automated to date, extending the roll-
out from the-scheduled-4-weeks-to(6ymonths. 60S bute mo FO mA BELL
—
« The Pathway systems interface to BA and POCL systems. Some of these are
new systems, being developed in parallel with Pathway, others are being modified
to include the Interfaces. There have been a number of issues with the interface A
systems, particularly with the BA CAPS programme and the POCL reference data pedata,
System. —_
* Definition and management of the programme to inform benefit recipients of the
changes in payment method.
e Major slippages in the timetable for functionality releases, together with transfer of
elements of functionality to subsequent releases,
we ee a
ee -—
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4. The Contract
401 =‘ The ‘contract’ is actually three related contracts, an ‘umbrella’ contract between the
two sponsoring authorities (DSS and POCL) and Pathway, a contract between the
DSS and Pathway and a contract between POCL and Pathway. The contracts have
evolved since the initial signing in May 1996, with Change Control Notices (CCNs)
being incorporated as they have been agreed and signed.
402 The three contracts follow a similar format. In Appendix 4 we list the clauses and
schedules that we consider to have particular relevance to our review. These identify
contractor and sponsor responsibilities, the approach to contract management and
the dispute resolution procedure.
403 The contractor is required to deliver services to meet the specified requirements in
accordance with the specified solutions and to develop specified services.
404 The sponsors are required to provide all information, services, facilities and
responses designated as their responsibilities and to use all reasonable endeavours
to perform these to any agreed timetable.
405 AContracts Steering Group is to be established to co-ordinate the umbrella contract
and Contract Administration Groups are to be established to co-ordinate the each of
the Sponsor contracts. In practice, all three contracts have been co-ordinated by the
Contract Negotiating Team (CNT) which has met regularly (monthly or fortnightly)
since contract signing.
406 All disputes to be referred to the Contracts Steering Group (umbrella contract) or the
Contracts Administration Groups (sponsor contracts). Umbrella contract disputes are
to be referred to the PDA Board if they cannot be resolved within 14 days by the
Contracts Steering Group, sponsor contract disputes are to be referred to the
Contracts Steering Group if they cannot be resolved within 14 days by the Contract
Administration Groups.
407 We interpret this to mean that Pathway are to develop and deliver services, the
sponsors are to carry out their responsibilities and that any disputes should be
referred to the CNT meeting and then to the PDA Board meeting if they cannot be
resolved by the CNT. We would therefore expect to find reference to any significant
default in the CNT and PDA Board minutes of meetings. We have reviewed these
minutes from January 1997 to February 1998 to identify such references and set out
our findings in Section 6 of this report.
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5. Defaults and Causes
Introduction
501 This subject is more difficult to document than we would have hoped, since, despite
the many problems and delays which have occurred, we have found no
Wa documentation which refers specifically to defaults other than the notification of
rnd wh breach sent to Pathway on 24 November 1997, identifying the failure by Pathway to
Nore >” complete the Operational Trial by 21 November 1997. We have, therefore, identified
from our interviews and document reviews those issues which might be considered
to be defaults or which have contributed to the Operational trial default. We have
also extracted relevant comments and issues from reports prepared by external
consultants and from Pathway correspondence and presentations.
Slippages
502
503
504
505
The slippage in the timetable which occurred towards the end of 1996 and in early
1997 was clearly a default, which was resolved by the preparation of a new timetable
in February 1997. We understand that Sponsors and Pathway accepted that they all
bore some fault for this, although no attempt was made to allocate such fault. We
have been asked to ignore this default for the purpose of our review.
‘adnwascrelease, trot e-“canltaciual release. was scheduled to-gorlve on 30 June
1997, with a full child benefit service for roll-out to 200 Post Offices. After three
separate notifications of slippage, it went live on 2 November 1997, a delay of 18
weeks. Delivery of this service was clearly a Pathway responsibility and they have
made no documented claims of fault by the Sponsors for the delay, other than some
general assertions made in a presentation of the ICL Pathway programme review
dated July 1997 (see 507 below). There is also some documentation (Steering
Committee minutes 8 May 1997) suggesting that Pathway were at fault, identifying
software problems with the Riposte software. One piece of documentation (PDA
report for period ended 30 June 1997) suggests that CAPS failures caused some
delay to the start of Model Office Rehearsal.
We must, therefore, conclude that the cause of the delay to release 1c can be
attributed primarily to Pathway, although there may be a small degree of BA fault.
Pathway release ‘e, a ‘contractual’ release, was scheduled to be delivered for live
tunning on 8 September 1997. It was then scheduled for ‘Live Trial’ at 200 Post
Offices until 21 November 1997. The completion of Live Trial on that date was a
contractual milestone. This milestone was not achieved because of the delays to
release 1c. At the time of writing (March 1998), the milestone had still not been
achieved. The current re-planning indicates a likely target of January 1999 to April
1999, or possibly July 1999, for the milestone. There is extensive documentation on
this re-plan, none of which ascribes fault for this delay to the Sponsors or the PDA. It
is clear from the documentation that the delay is caused by past under-estimation by
Pathway of the development work required.
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506 There is a dispute between Pathway and the PDA about the relevance of a delay in
the preparation of CAPS release 2.2, which was scheduled be delivered 3 weeks
after Pathway release 1c, on 21 July 1997. CAPS release 2.2 was installed 3 weeks
after Pathway 1c, on 24 November. There is a claim by Pathway, at the CNT, that
the failure to achieve the ‘code-freeze!date of 2 June 1997 for CAPS 2.2 (a date
wo which does not appear in the Master Plar) V3) resulted in a ‘contractual’ delay which
x; Should extend the term of the contract.
PIAS “ my
wy We understand that this ‘failure’ occurred because Pathway were not ready and
Si there appeared to be no requirement to formally meet the time schedule for this
activity. No suggestion has been made by Pathway that the ‘failure’ caused any
delay to them, but they are arguing that ‘causation’ is not required in the contract to
establish a delay. We regard this as a legal issue, with no Sponsor responsibility for
causing delay.
ICL Pathway Programme Review
507 ICL Pathway conducted a review of their programme in mid 1997, the results of
which were presented to the PDA Board at the meeting on 15 July. The presentation
covered a Programme Audit, a review of Security, a review of Release ‘1c testing,
conclusions and a Programme Plan. The key findings presented were:
Programme Audit:
e Too much change late in the development cycle
e Requirements definition freeze
e Release contents freeze (Release 1c still not signed off)
e Elapsed time through design, development and test
¢ CRs/CCNs
Too much overlap and compression in the phased releases
Knock-on effect of close incremental releases
End-to-End Security is difficult to test and is the gating item
Need more time between releases to improve productivity and quality
Multiple CAPS and Pathway Releases creates too many baselines
eceee
Security Review:
Access Control Policy not agreed until 30th April 1997
Complex and demanding requirements
Contents of 1c are extensive and mandated
Very limited time to develop and test
End-to-End testing is comprehensive and difficult
eooeee
Release 1c Testing Review:
e Late agreements on Security and MIS for Release 1c
¢ Serious impact on establishing the Release 1c baseline
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« Resulting in delays to integration testing and a build up and slow clearance of
PinICLs
Need to rebuild the release baseline for MOR2
Security is on the critical path
Need access to Data Centres to rebuild and prove Release 1c
Need to change testing strategy for future releases
Conclusions:
Circumstances have changed
Programme rethink required
Reduce the number of releases
Reduce the inter-dependencies
Rephase outputs into manageable tasks
eceee
These findings identify Pathway's view of the primary reasons for the delay to
Release ‘1c, for which they then proposed deferral of the release date from August
18 to October 13. It should be noted that Pathway made no attempt in the
presentation to quantify the impact on the programme schedule of the individual
items they listed, nor did they attempt to allocate fault. There was, however, a clear
implication that they considered that some of the Sponsor's actions had contributed
to the delays.
The statements that ‘End-to-End Security is difficult to test and is the gating item’
and that ‘Security is on the critical path’ imply that they consider the on-going debate
about Security to be the most serious issue. We explore this in paragraph 509 below.
The other concerns expressed mostly relate to late or slow resolution of issues and
to the multiplicity of releases. Issue resolution is addressed in 514 below. The
multiple release problem resulted from plans willingly agreed between Pathway and
the PDA, which were subsequently realised to be over complicated. No fault appears
to have been implied by this.
PA Programme Review
508 In July 1997, following the delay to Release 1c, an Independent Programme Review
was proposed. PA Consulting Group were commissioned to conduct this review,
which took place in August and September 1997, with the final report published to a
very restricted circulation list on 1 October. The review was of the PDA, BA, POCL
and Pathway. The findings in the report that we consider relevant to our review are:
e Recognition towards the end of last year (1996) of the scale of data and business
migration and the need to move towards phased CAPS releases have affected
BA cost estimates and have contributed to an increased understanding of the
complexity of the overall implementation. This increased understanding led to the
change in time scale for the Programme agreed by all parties early this year and
which is reflected in Master Plan V3. (M3.1)
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¢ Despite an apparent focus on planning rather than doing (by POCL) and a
general underestimation of the resources required, we do not believe this has
contributed in any significant way so far to slippage in the Programme. (M3.2)
« There is evidence of a (PDA) change management process that requires time
which is not always allowed for in the plans. (M3.3) :
¢ At the outset of this procurement, it appeared to Pathway that the development of
a service to meet the PFI requirement could be achieved largely through systems
integration, and that its role was essentially one of a systems integrator. In reality,
the amount of development work needed was in our opinion, seriously misjudged.
As a result, time scales and resource needs were underestimated. (M3.4)
¢ As Pathway and sponsors have worked with the PDA to resolve the detail of the
requirement and also to incorporate change requests into planning, the extent of
the development needed has become clear. (M3.4)
° We believe that there are direct causes of slippage but that these need to be set
in the context of a small number of underpinning root causes. The root causes are
Marginal business cases, Agendas in conflict and PFI structural problems, The
direct causes are Resourcing, Development and control disciplines, Requirement
clarification and solution drift and The Escher dependency. (M4)
¢ Although we expect further slippage in the BA/CAPS programme...and we believe
that POCL are not moving fast enough into implementation mode, these delays
are not, in our judgement, on the critical path. It is PA’s assessment that the
primary driver of time scale slippage will now be Pathway as they come to terms
with the scale of what has to be done. (M5.1)
The PA view of the causes of slippage to date implies that fault lay with the nature of
PFI, with the Sponsors and with Pathway. However they did not separately consider
the delays up to the first re-plan and the subsequent delays to release 1c and future
Teleases,
PA Security Review
509 As noted in paragraph 507, there is an implication from Pathway's programme
review that the most important Sponsor issue that has caused delay is Security. As a
result, the PDA has recently commissioned, from PA Consulting Group, a review of
BA/POCL Security Requirements. The objective of the review was to determine
whether the Security Requirements were appropriate for a PFI procurement of this
nature or if not, could be considered ‘onerous, ill-defined and constantly changing’.
The review was restricted to the PDA, not involving Pathway.
PA reported (in draft at the time of writing) that ‘their investigations found no
evidence to suggest that the Security Requirements were onerous, ill defined and
constantly changing. The Requirements were developed in conjunction with
Government standards and industry best practice and as such are appropriate and
adequate for the programme. They have been stable since February 1996 (before
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award of contract), with the only post-contract change being a modification
requested by Pathway’.
We have, accordingly, not pursued further investigations into the Security issue, as
the PA report has found no justification in Pathway’s claims and no fault in PDA or
Sponsor actions.
Other claims
510 We understand that there have been a number of discussions between senior
executives of ICL and the Sponsors at which ICL have expressed their view that
there is Sponsor fault for the delays to the programme. No correspondence has
preceded or followed these meetings and most have not been minuted, at least not
to the level of being available to members of the PDA. We have, however, seen
copies of the slides from a presentation made on 15 January 1998 by Keith Todd,
Chief Executive of ICL, to Peter Mathison, Chief Executive of the Benefits Agency,
on the reasons for delay, the key slide of which we reproduce below:
Programme Delays
. PFI Contract flawed
. high dependencies on processes and interfaces to new BA and POCL
systems .
. problems with risk transfer restrict solution design
. serious delays in CAPS programme
. Incomplete specifications
. key area not defined at contract
. “drop-down” process not successful
. security definitions very complex, late and mandated
° Slow resolution to Agreements to Agree, CARs and Change Control
. Serious under-estimate of development work
. Problems with Management arrangements
. PDA not comprehended in contract
. poor end-to-end management
. Sponsors agendas in tension/conflict
. need for change accepted
This document contains no quantified claims. It repeats a number of the assertions
made in the Pathway July presentation and includes some findings from the PA
Consulting October review. However it does raise a number of ‘new’ claims, which
we consider in the following paragraphs.
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512
513
514
515
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‘serious delays in CAPS programme’
We understand that the CAPS programme had some problems in 1996, which were
one of the causes of the need for the February 1997 re-plan. From our interviews
and document searches we have found no suggestion of CAPS delays since then,
other than some: suggestions that CAPS problems contributed to the delays to
release 1c and the legal debate about the delay to CAPS 2.2 referred to in
paragraph 506 above. We can therefore identify no significant delay since February
that can be attributed to CAPS.
‘key area not defined at contract’
We do not understand this claim. No such assertion was documented in the PA
report and we have found no reference to such a claim in any of the programme
documentation we have reviewed. The PDA Programme Director also does not
understand this claim.
‘“drop-down” process not successful’
We do not understand this claim. Again no such assertion was documented in the
PA report and we have found no reference to such a claim in any of the programme
documentation we have reviewed. The PDA Programme Director and other
interviewees considered that the process had been sucessful, albeit slower than
planned.
‘slow resolution of issues’
Our review of documentation has identified that some of the hundreds of issues
(A2As, CARs and CCNs) have taken a long time to resolve and there are a few
instances of documented Pathway claims that delay will be caused if resolution is not
achieved quickly. We have not found a single documented claim by Pathway that
quantifies the extent of such delay or that states that such delay has occurred.
It is normal in a project of this size and complexity for there to be many issues that
require resolution and such resolution may be slow in some cases. We would have
expected the development manager (Pathway) to have identified any critical path
activities that were dependent on Sponsor resolution and to have documented these
to the PDA.
We understand that the responsibility for slow resolution of issues lies with Pathway
as well as the Sponsors, as there have been many instances where Pathway have
been late in delivering documents or have delivered documents of poor quality.
‘Serious under-estimate of development work’
This appears to be an acceptance of the claim made to us by all interviewees and
confirmed in the PA programme review, that Pathway seriously under-estimated the
development work required for the programme. It would appear that this
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under-estimation continued until the re-organisation of Pathway in July through
September 1997. Several interviewees have said that they now believe that Pathway
are more professional and that they have more confidence in Pathway’s, greatly
increased, estimates for completion of the development work. As no deliveries have
been made since then and none are due for some months, the verdict is open on
whether this will prove to be the case.
Conclusion
516 The BA/POCL payment card programme is a very large and complex Information
Systems programme.
Pathway is required, under the terms of the contract, to deliver services to meet the
specified requirements in accordance with the specified solutions and to develop the
specified services.
The Sponsors are required, under the terms of the contract, to provide all
information, services, facilities and responses designated as their responsibilities and
to use all reasonable endeavours to perform these to any agreed timetable.
It is our opinion that Pathway seriously under-estimated the effort and time needed
to develop the services when they prepared their proposal and did not recognise this
under-estimation in the period from May 1996 to February 1997, when the contract
re-plan was agreed, Pathway now appear to have recognised that the effort and time
were under-estimated and have stated that much more effort and time is required to
complete ‘new’ release 2. They have not yet finished the planning and estimating of
‘new’ release 2+, which will complete the development of the contracted functionality.
It is our opinion that Pathway have been responsible for the delays to the
programme, since the re-plan in February 1997, that caused the November breach,
by not allocating sufficient resources to complete their contracted obligations within
the agreed timescale. Pathway have made no documented claims to support any
verbal assertions that changes in requirements have impacted their ability to meet
the timescale.
A secondary, and, in our opinion, relatively insignificant, cause of the breach is
delays resulting from slow resolution of issues. Any programme of this type will have
a multiplicity of issues that require resolution and the time to achieve such resolution
needs to be allowed for in the planning and estimating of the programme. We do not
believe that Pathway allowed sufficient time for this activity in their estimates.
Pathway have made no documented claims to support their verbal assertions of
delays resulting from slow issue resolution.
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6. Relevant Documents
601 In paragraph 407 we note that, under the terms of the contract, any disputes should
be referred to the CNT meeting and then to the PDA Board meeting if they cannot be
resolved by the CNT. We would therefore expect to find reference to any significant
default in the CNT and PDA Board minutes of meetings. We have reviewed these
minutes from January 1997 to February 1998 to identify such references.
602 We reviewed the minutes of the 16 meetings of the CNT in the period January 1997
to February 1998, Most of the meeting content was discussion of the multitude of
detail relating to the on-going process of maintaining the contract with Change
Control Notices (CCNs) to reflect the reality of the programme. There are a small
number (<10) of instances where a Pathway representative suggested that a delay
would occur unless agreement was achieved quickly on a particular item, but no
instances of a report of any such delay occurring. There were a number of instances
where Pathway stated that they were progressing on the assumption that agreement
would be achieved and that failure to agree on the basis of their assumption would
cause delay, but again no instances of such a delay occurring. We therefore
conclude that Pathway had not used the CNT meeting contract dispute procedure for
any defaults by the Sponsors in this period.
603 We reviewed the minutes of the 11 meetings of the PDA Board in the period January
1997 to February 1998. Most of the meeting content was discussion of the progress
of the programme, with considerable emphasis on the delays to the delivery of
release 1c and to the schedule for release 2 (replacing 1e). There are no minuted
items suggesting any fault by the Sponsors or the PDA for these delays. Again we
must conclude that Pathway had not used the PDA Board contract dispute
procedure for any defaults by the Sponsors in this period.
604 We found two reports prepared by the PA Consulting Group to have particular
relevance. The review of BA-POCL Programme, dated 1 October 1997, is quoted in
paragraph 508 and the draft review of BA/POCL Security Requirements, produced in
February 1998, is quoted in paragraph 509.
605 We have reviewed all of the other documents listed in Appendix 3, From our
interviews with the people listed in Appendix 2, we understand that these documents
cover all major programme progress reports and correspondence with Pathway. We
understand that there is also a very large volume of documentation at a lower, even
more detailed level, which we have not been able to review given the time
constraints of our review. However, if there were any important issues raised in detail
documents, we would have expected these to have been escalated to higher level
documentation and meetings.
606 We have prepared detailed notes of all relevant statements in the documents
reviewed. These notes will be held by Bird and Bird in case there is a future need to
review this documentation.
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Appendix 4 Terms of Reference
INDEPENDENT CONSULTANT - TERMS OF REFERENCE
6th February 1998
1. The Consultant must be independent of all three parties.
2. The Consultant must be adequately qualified to address the technology involved in
the BA/POCL Programme.
3. The Consultant will complete his written report to the Authorities within 6 weeks to 3
months, depending on the scope of work (see paragraph 6 below). The Consultant
will provide initial feedback on his findings within 2 weeks after commencing work.
4, The Consultant will have access to members of the BA/POCL Programme and/or
relevant documentation held by the BA/POCL Programme.
5. The Consultant will have access to the Authorities’ staff and all relevant
documentation held by the Authorities.
6. At present, the Authorities will not request access for the Consultant to Pathway's
staff or Pathway's documentation, and the Consultant will be required to prepare a
report based only on the Pathway documentation held by the Authorities. On this
basis, it is estimated that the Consultant will complete his written report within 6
weeks, However, it is accepted by the Authorities that the report would be more
definitive if it were based on all available information, including all of Pathway's
documentation and comments.
7. The Consultant will analyse the defaults by any party to the Related Agreements and
analyse the causes of those defaults. In particular the Consultant will review
whether the Authorities have caused or contributed to a default on the part of
Pathway. This assessment of past responsibility will be used to inform future
negotiations with Pathway.
8. The Consultant will keep all information received confidential and the content of his
report confidential to the Authorities and their legal advisers. The Consultant (and
his assistant) will enter into confidentiality agreements with each Authority to this
effect.
9. The Consultant will not have access to or investigate any aspect of the commercial
contracts between the Authorities.
10. I The Consultant will work under the supervision of and report to the Programme
Lawyer.
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Appendix 2 List of interviewees
Hamish Sandison Partner, Bird and Bird
George McCorkell Projects Director, Benefits Agency
(Interview oustanding at draft report)
Paul Rich Development Director, Post Office Counters
(Interview oustanding at draft report)
Peter Crahan Programme Director, PDA
Pat Kelsey Head of Contracts, PDA
Bruce McNiven Deputy Director, PDA
John Meagher Service Development Manager, PDA
Mitchell Leimon Release Manager, PDA
Stuart Riley Commercial and Corporate Manager, PDA
John Cook Contracts Team Leader, PDA
Gareth Lewis Fraud and Security Manager, PDA
Jeremy Folkes Technical Manager, PDA
Colin Oudot Product Manager, PDA
Dave Miller Horizon Programme Director, Post Office Counters
(Interview oustanding at draft report)
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Appendix 3 List of documents reviewed
Minutes
Programme Steering Committee Minutes PSC
PDA Board Minutes PDA
PDA Pre-Board Minutes
CNT minutes CNT
Commercial Minutes - PDA/BA
Commercial Minutes - POCL
CCB Minutes CCB
Checkpoint (Nile and Congo) Minutes
Progress reports
PDA Progress Reports
Contracting Authorities Responsibilities Status CARs
CARs Correspondence CARs
Notes of Meetings with ICL
Release Management Team Progress Reports
Service Development Team Progress Reports
Reports and specifications
Contract (Files 1-12)
Statement of Service Requirements SSR
SADD Version 2.1 SADD V2_1
SADD Version 4 SADD V4
SADD Version 4 - Caveat Letter
PA Consulting Review of BA-POCL Programme
French Thornton Report
Review of the Payment Card Programme
Lessons Learned Report
Status of Security Requirements & Developments
End to End Security Paper .
PA Consulting Review of BA/POCL Security Requirements
PDA Master Plan Version 3 (10/4/97 - Approved)
PDA Master Plan Version 3 (14/2/97 - Draft)
Pathway New Release 2 Replan Review
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Miscellaneous
Replan Audit Trail (P Crahan file)
Catalogue of Safe Contents
Contract "Umbrella" and Contract Notes
Pathway Correspondence File (P Crahan file)
CAPS Overview
PDA Organisation Structure (Migrating)
PDA Organisation Structure
Pathway Organisation
Glossary of Terms
Miscellaneous Pathway correspondence and presentations
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Appendix 4 Relevant contract clauses and schedules
Relevant clauses
201(JNT)
201(DSS)
201(POCL)
401(JNT)
402(DSS)
A complex clause specifying Contractor and Authorities responsibilities,
specified in schedules B1-5 & 7, to be extrapolated and transposed into
schedules in the DSS and POCL contracts within 3 months extendable to 6
months. This was done,
Contractor to meet the requirements specified in Schedule A15 in accordance
with solutions specified in Schedule A16 by performing the Basic DSS
services referred to in clause 201.2:
DSS Development services in clause 402
Roll out services in clause 404
DSS Steady State services in clause 405
Management services in clause 602
DSS Contingency services in clause 409
Transfer services in clause 906
Contractor to meet the requirements specified in Schedule A15 in accordance
with solutions specified in Schedule A16 by performing the Basic POCL
services referred to in clause 201.2:
POCL Development services in clause 402
Roll out services in clause 404
POCL Steady State services in clause 405
Management services in clause 602
POCL Contingency services in clause 410
Transfer services in clause 906
Contractor to develop:
Service Architecture Design Document
All necessary interfaces to create the Service Architecture.
Contractor to develop:
Optional DSS Services (Schedule C1)
Card Management Service (Schedule E1)
Payment Authorisation Service (Schedule D1)
Service Architecture Design Document
DSS Contingency Services (Schedules D9 & E9)
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402(POCL) Contractor to develop:
Optional POCL Services (Schedules C1 & H1)
Benefits Encashment Service (Schedule D1)
Automated Payment Service (Schedule E1)
EPOSS (Schedule F1)
POCL Infrastructure Services (Schedule G1)
Service Architecture Design Document
POCL Contingency Services (Schedules D9,E9,F9,G11 & (optionally)H9)
601(All) Authorities entitled to monitor Contractor performance per Schedule A4
procedures.
602(All) Contract management performed per Schedule A4
602(DSS) DSS Services to be managed per Schedules D5 & E5
602(POCL) POCL Services to be managed per Schedules D5, E5, F5 & G7.
605(DSS) DSS undertakes to provide all information, services, facilities and responses
designated as DSS responsibilities in Schedules D3 & E3. DSS to use all
reasonable endeavours to perform these to any agreed timetable per
Schedule B9.
605(POCL) POCL undertakes to provide all information, services, facilities and responses
designated as POCL responsibilities in Schedules D3, E3, F3 & G5. POCL to
use all reasonable endeavours to perform these to any agreed timetable per
Schedule B9.
807(JNT) All disputes shall be referred to the Contracts Steering Group (Schedule A4)
for resolution.
If the dispute cannot be resolved within 14 days, it shall be referred to the
PDA Board for resolution.
If it cannot be resolved by the Board within 14 days, it shall be referred to
Expert resolution or the English courts.
807(DSS) All disputes shall be referred to the Contract Administration Group (Schedule
A4) for resolution.
If the dispute cannot be resolved within 14 days, it shall be referred to the
Contracts Steering Group (Schedule A4 of the Joint contract) for resolution.
If it cannot be resolved by the Group within 14 days, it shall be referred to
Expert resolution or the English courts.
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807(POCL) All disputes shall be referred to the Contract Administration Group (Schedule
A4) for resolution.
If the dispute cannot be resolved within 14 days, it shall be referred to the
Contracts Steering Group (Schedule A4 of the Joint contract) for resolution.
If it cannot be resolved by the Group within 14 days, it shall be referred to
Expert resolution or the English courts.
Relevant schedules
A4(All) Contract Management:
1 Objectives
(JNT) To monitor and manage the relationship between the three parties and to
authorise actions affecting the interests of both Authorities.
(DSS) To monitor and manage the delivery of the DSS services and to authorise
actions which improve those services. I
(POCL) To monitor and manage the delivery of the POCL services and to authorise
actions which improve those services.
2 Organisation
(JNT) A Contracts Steering Group to be established to co-ordinate the agreement.
(DSS) A Contract Administration Group to be established to co-ordinate the
agreement.
(POCL) A Contract Administration Group to be established to co-ordinate the
agreement. :
Lists specific DSS responsibilities
G5 (POCL)
Lists specific POCL responsibilities
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