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UK Ministry of Defence: Saving IT contract costs of £16.1 million

The UK Ministry of Defence's (MOD) Command Support and Intelligence Solutions Integrated Project Team (CSIS IPT) was responsible for delivering around 40 IT programmes to provide critical support to front line military operations. These programmes were provided through a few core service contracts which were due for renewal and needed to be extended. However, the systems were planned to be phased out in the medium term, the front line was seeking a better service and the budget had been reduced. Negotiating with the incumbent service provider was the only solution.

A joint PA and MOD team completed a detailed financial analysis, then carefully planned and executed the negotiations over 12 weeks with the supplier. The performance mechanisms in the contract were changed to better drive the behaviour required and reward the supplier appropriately. Unrealistic elements were also removed to reduce the risk to the supplier.

As a result, the joint team achieved 40% savings against the initial estimated price, equivalent to savings of £16.1 million for the MOD.

"PA provided an expertise that was not available from within the IPT; their involvement in the process ensured an extremely satisfactory conclusion to contract negotiations."

Squadron leader Dave Baskerville, CBM-Air, UK MOD

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