POL00090460
POL00090460
‘MAY-1899 WED 10:12 ID?tHM IKEASUKY
ee Qa Seed
WITHOUT PREJUDICE bs
5 4 May1999 Pow Cod
Mr. Steve Robson, deoe Hille Sons WMinat. Con)
Second Permanent Secretary, Rae Arslan (8 SS)
HM Treasury, Hae leao
Parliament Street, Te
london. SWI fags dot. Roberta
Dew Ste, Keutr Grined
Following our discussion today, I feel that it would be usefull to write to you y,
to make clear ICL’s current position on its ‘without prejudice’ offer of 18
December 1998, now known as Option A.
As you are aware, despite continued reluctance on tho pat of the Benefits .
Agency to co-operate in the acceptance procedure, the current system as -
provided for under the current contract, with the magnetic stripe card, is
performing well technically, and the acceptance trials are proceeding
according to programme.
Lowever, although it would be technicully possible to deliver the system as
currently contracted for, und as contemplated in Option A, TCL’s view is
that this is no longer commercially realistic, given the severe disagreement
between the sponsors and the reluctance of the BA to accept Option A as the
way forward.
Given this situation, [CL can no longer regard Option A as viuble, therefore, .
1 feel that the only sensible course is to make jt plain that ICL cannot any
longer keep its offer of 18" December 1998 open (to which, jndeed, we x
have never had a response), and we are hereby withdrawing it.
We believe that the best way forward, us you know, is spcedy acceptance of
the proposals based on Option B1.2 which are currently under discussion,
and we look forward to working with all parties to achieve such acceptance,
on a proper commercial and legal basis, by the end date for the ministerial
decision of 10 Muy 1999. :
In the unlikely event that (he public sector wished to continue with the
Horizon system upon the current basis, with u magnetic stripe card, TCL
would of course be prepared to supply this, but no longer upon a PFI basis.
Terms would have to be agreed which removed the acceptance risk from
ICT, und insured that ICL recovered all of its investment on the project
together with a fair and reasonable rate of return. R Christou
Directur
Commoretal & Legal Affalrs
Intesnatdonal Camputers Lanes
Registered ki Caernd ona 96058
Regatered Olfex
20 Farabry aasate
London £628 105
POL00090460
POL00090460
.. Hees 30
: STRICTLY PRIVATE AND CONFIDENTIAL Th \y
PRIVILEGED 4 My.
To Pat Kelsey
Joint Contracts Manager
From Dave Miller 9 February 1999
Testing and Live Trial
Please consult the Programme Lawyer about the answers to the following
questions:
1. What are the Target Dates? (See Schedule C2, paragraph 4.2 of the
Authorities Agreement).
2. What are the legal implications of target dates agreed subsequently,
either verbally or in writing?
3. What liabilities, actual or potential, would the Authorities face as a
result of DSS’s failure or refusal to co-operate with Model Office
testing and Live Trial in accordance with the Target Dates? (described
at both 1 and 2 above).
4. Is the DSS entitled to refuse to co-operate on the grounds that it does
not believe that Pathway is yet in a position to achieve Model Office
testing or a successful Live Trial? If so, please state reasoning and
under what provision(s) of the Related Agreements?
5. How is the answer to 3 affected if the Horizon Programme disagrees
with the DSS’ view (i.e. believes that it is sensible to commence Model.
Office testing now and hold to the subsequent plan).
6. What are the Authorities responsibilities with regard to the
Operational Trial? (See Schedule C4, paragraph 2.3 of the Authorities
Agreement).
7. Whataction should the Horizon Programme take if it believes that
Pathway is in a position to commence Model Office testing and if
successful hold to the subsequent plan? ‘
An urgent response is required please.
Horizon Programme Director