Billion-Dollar Tender Fiasco

The UK public sector somehow presided over a shocking IT procurement.

The postal service bought a new accounting system. For the independent 'moms 'n pops' shopkeepers who ran small sub-post offices. The result?

“the worst miscarriage of justice in recent British legal history".

After a string of wrongful convictions, livelihoods unnecessarily ruined and unconscionable mental trauma, one High Court judge labelled the system as "not remotely robust". Full of bugs to boot.

The full horrors of the scandal enter the public psyche via enquiry revelations.

The origins of this absolute disgrace are found in a 1996 tender process.

The eventual winner - ICL, soon to become part of Fujitsu - on the technological scorecard, came in at third place.


In one of the myriad of examples where the bidder fitting the stated needs closest never wins, third place prevailed. Why? Well, as journalist Ben Wright summed up;

"...because, like the budgie, it was cheap".
"And, guess what? It was a total and utter disaster".

In this case here, costing the taxpayer back then an eye-watering written off £700m.

It should have been career ending.

Things somehow got worse.

And example of the Sunk Cost Fallacy bared its toxic fangs.

The buyer and vendor decided to use some of the failed tech to create a new, different system.

The initial project was for swipe cards to prevent welfare payment fraud. The next, for the first time sought to replace paperwork with a digitised 'branch accounting system'.

Chaos and injustice followed. The real criminality callously covered up.

Whilst this involves UK Govt spend, its message can be shared loudly elsewhere.

For those submitting in a competitive bid scenario where you do not expect to be - nor, critically, intend to be - the lowest price bid, recounting this tale to your prospect is a must.

I've long despised the disconnect between so-called professional procurement execs, and their colleagues shortly to use what's bought, not to mention the true bottom-line and related TCOs.

There is a reason why cheapest quotes in our solutions realm seldom prevail.

Usually because the buyer has experienced making that mistake before. And steadfastly wishes to avoid doing so once more.

Ask your buyer about previous beauty pageants ran there.

How many contracts ever got awarded to the cheapest?

You'll be able to pick out themes for sure.

And whether for qualification, pitch or politics, use them wisely.

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