IT PFI Projects: TECHNOLOGY OBSOLESCENCE AND PFI-AN UNEASY UNION?
Section snippets
1. INTRODUCTION
Just one amongst many high-profile failures is the $70 million tussle between ITNet and the London Borough of Hackney (Hackney). In March 2001 Hackney terminated a ten year $70 million contract with ITNet after it claimed the company had caused a huge backlog of claims for tax and benefits payments with the implementation of its IT system. Hackney suggested it would sue ITNet for damages of up to $30 million while ITNet claimed its contract had been unfairly terminated. It was eventually
2. TECHNOLOGY OBSOLESCENCE
Having looked at how to avoid the risks involved in IT PFI projects and how TTG has suggested tackling these, we will now focus on the particular problem of technology obsolescence and how it can be addressed.
Whether obsolescence or changes in technology are relevant, will depend on the nature of the contract. It is safe to assume that most, if not all, information technology project specifications would alter as a function of passing time. Therefore, in IT projects it is important to determine
3. CONCLUSION
Hence, it seems that a practical way forward is to:
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define the system architecture/platform using current technology with the Contractor taking refresh risk to an extent it is comfortable to take;
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define any changes to platforms or the replacement of platforms as a “Change”; and
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make a “Change” the responsibility of the Authorities at their cost.
However, in each individual case a balance must be struck between these three factors and a decision as to whether the Authority should be left bearing
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