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By Tony Hallett, 14 August 2000 00:20

COMMENT Antiquated technology has been partly blamed for the £1bn the DSS loses every year in benefit fraud, and has contributed to its failure to recoup the £4bn it is owed. EDS seems a strange choice. Its work with government departments - and in particular the Inland Revenue (IR) - has been widely castigated. Just last April, The IR's IT director, John Yard, admitted his department had invoked penalty clauses 100 times during the first five years of its 10-year relationship with EDS. The penalties - imposed for shortfalls in meeting service level agreements - had reached a cumulative value of £2.5m. Then in July, the Committee of Public Accounts noted that since the IR deal began in 1994, the value of new work awarded to EDS stood at £500m out of the total value of £2.4bn - even though the IR has failed to benchmark over half of the work carried out by EDS, and therefore has no way of telling if other suppliers could have done the job for less money. The committee was also concerned that the IR will find it difficult to switch suppliers when the contract comes up for renewal in 2004. But while it's easy to lay all the blame at the doors of EDS, you have to question the wisdom of any organisation - whether it be in the public or private sector - tying itself to one supplier for this length of time. The IR comes in for the heaviest criticism in that report, not EDS. So will history repeat itself - and if so, how much blame should the outsourcer take? It can't help it if it keeps winning these government contracts. It's a commercial organisation, and it's hardly going to suggest that a 10-year contract is unwise. The DSS would do well to heed the lessons of the Inland Revenue. The client - as in any outsourcing contract - must keep control, and monitor the performance of the supplier like a hawk. They say a week is a long time in politics: 10 years is several lifetimes in IT. Let's hope the DSS doesn't find that out the hard way.