Cabinet Office terminates ITNET deal

The Cabinet Office has exercised its contractual entitlement to terminate, for breach of contract, the agreement entered into last July 2003 with ITNET UK Limited to provide data centre services.

A Cabinet Office spokesman said: "This termination demonstrates the Government taking a pro-active approach to avoid non-delivery of this IT project and to prevent unacceptable and unplanned over-expenditure against contractually agreed costs.

"The Cabinet Office will immediately be entering into a process with alternative suppliers to provide continuity of service. There will be no impact to the existing services, or the users of them.

"None of the services under the remit of ITNET's Data Centre Hosting Contract have either been delivered or accepted and the project is several months behind schedule and was forecast to be considerably over budget if continued.

"The decision to terminate has not been taken lightly. Prior to our decision to terminate this contract every effort had been made, over several months, to resolve the issues, without success."

The e-Envoy, Andrew Pinder said: "In recent years, Government has worked hard to deal resolutely with the early symptoms of problems in projects of this kind. I am firmly of the opinion that it is necessary to take this action to protect vital public services."

ITNET is reported to be "extremely disappointed to receive this communication in circumstances when it is making good progress in delivering the contract in accordance with milestones revised to reflect significant changes to the customer's requirements".

The £83 million contract involved transferring the Government Gateway, an authentication and routing service; the Knowledge Network, a Government information sharing facility; and Delivering on the Promise (DotP), a pan-government content management system, from the existing arrangements to a single managed service.

When the five year contract was awarded in July 2003, Douglas Alexander, Minister for e-transformation at the Cabinet Office, said: "The Government has a target to get all services online by 2005, achieving high levels of use in key services. Resilient, flexible solutions like the Data Centre Hosting Project will provide the fundamental infrastructure to help us achieve this."