Power of Intellect wins out in contract dispute

The government has given public-sector channel players a stay of execution and suspended the rollout of controversial contract terms for IT projects, following year-long industry protests.

The Office of Government Commerce (OGC) introduced the new-model contract terms in November, ignoring the key points of contention raised by IT trade association Intellect during an autumn consultation (CRN, 13 December).

The trade body claimed the contract terms imposed unfair contractual liability and penalty clauses for the failure of IT projects onto IT suppliers. But Intellect scored a surprise tactical win at a meeting last week at which the introduction of the disputed terms was suspended.

Nick Kalisperas, head of e-government at Intellect, said: “We stated previously this was going to be a lengthy process. So this is just a step in the right direction.”

The government may even consider withdrawing the contentious clauses. At the meeting last week, Intellect and OGC representatives agreed to test the new-model terms on an early-stage IT project called the Development Innovation and Support Contracts (DISC) programme at the Department of Constitutional Affairs.

An OGC representative said: “We are having a hiatus on the embedding to allow us to see the DISC project and the model contract terms in reality and consider the points raised by Intellect.”

Intellect had continued to contest the terms after the OGC introduced them in November despite industry objection. In February Intellect agreed to the terms and vowed to use the tactic of resisting the clauses in individual contract negotiations.

The OGC has maintained that the model contracts were meant as a pick and mix of clauses for government IT buyers, and that they still left room for negotiation over individual clauses. But Intellect considered that industry’s negotiating position would be diminished by contracts that established its disadvantage as a starting point for negotiations.