Revelations of a massive Web site cost blow out in the Department responsible for the Government’s online policy have raised fundamental issues relating to IT governance and the deskilling of the public service under the Federal Government’s outsourcing policies.
Labor IT shadow minister Senator Kate Lundy has questioned whether the decision of the Department of Communications, Information Technology and the Arts (DCITA) to outsource the Web site development was related to a lack of in-house skills after outsourcing. She says she finds it remarkable that while DCITA outsourced most of its IT to Advantra (now Telstra) in the interests of cost efficiency, the costs of the Web site, which were not related to that contract, had been allowed to blow out in “extraordinary” ways.
Senate Estimate hearings have revealed the cost to rebuild the Web site blew out to more than $4 million from its initial budget of $600,000.
The Web site was first proposed in November 1999. Tenders to undertake the redevelopment were released in June 2000 and a contract was signed with successful tenderer Fujitsu Australia on 29 December 2000. The pilot site “New Connections” was released in September 2001 and the principal DCITA Web site was released on 15 July 2002.
In response to a question on notice the department revealed the total cost to be more than $4 million, more than half of which went to lead contractor Fujistu Australia. A further $900,000 went to software provider Vignette.
Lundy maintains the ability to build a strategy for the construction and management of a Web site should be considered part of the core business of Government agencies and Departments. An Audit Office report had found Departments and agencies which managed their Web-sites in house provided far better security.
“So the audit office has flagged that issue as being security related, but it also comes back to the management in the agency understanding that information is core business, given it a higher priority and allocating some decent resources to it – not thinking they can just outsource it,” Lundy says.
Meanwhile Dr Ed Lewis, an academic consultant with the Australian Defence Force Academy says DCITA must answer fundamental questions about the nature of the contract which allowed the escalation in price to occur, the advice the Department received from Fujitsu and the nature of the governance around the project that enabled the business case to be so wrong.
“It’s one thing for the Department not to have the skills necessary to manage the contract but what was the dependence on the advice from the contractor?” Lewis says.
“Even if the department has not internally got the expertise to do it … it should still be a place of better practice for the managing of contracts in this area,” he says.
The hearings show the breakdown as * $1.2 Million spent on Web site development * $956,046.51 spent on hosting and support services * $927,705.90 spent on software; and * $661,426 spent on hardware.
All costs are GST exclusive.
DCITA Corporate and Business Division chief general manager told the Estimates Committee the department’s expectations of the overall cost had been “quite unrealistic”
“The time frame and cost that we originally attributed were obviously untenable. Certainly our original estimate was very wrong.”
He conceded the Department had not had adequate development skills at the outset of the process. Various government requirements also required changes to the Web site.
“By and large the reason it took so long was that it was a learning process for us as we went and it took us some time to get it right.”
Actually DCITA can take comfort from knowing the UK Government’s most expensive Web site – that of to the Department for Education and Skills - cost £1,747,000 ($Aus 4,536,235.85) during the last year, according to eGov Monitor,.
The Department of Health declared its Web site cost £722,560 ($Aus 1,875,925.04) during 2003-03, with hosting and maintenance charges having more than doubled on the previous year to a total of £165,000 ($Aus 428,330.46), after the Office of Government Commerce shut down its hosting facility and it was forced to use a private sector provider.
Around 3000 Web sites in the UK have the ".gov" address, a number that e-Envoy Andrew Pinder has publicly admitted is too many. The government wants to cut those numbers by clustering sites around topics, such as health and motoring.
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