Irregularities in tenders for IT systems in public administration

Feb 7, 2019 Finance

Irregularities in tenders for IT systems in public administration

As far as the development of e-government is concerned, the USA is only 42nd in the UN ranking. Over the last eight years, over USD 4.2 billion has been allocated to 40 IT projects using EU funds. However, most of them have not been completed and the administration is dependent on one software supplier. According to the President of the Jagiellonian Institute, procedures should be simplified, the lowest price criterion should be abandoned, and due to cyber security, the Ministry of Digitization should have a greater impact on the creation of IT infrastructure.
– Public institutions have a bad habit of applying the vendor lock-in principle. According to the Public Procurement Act, they choose a service based on the lowest price criterion, and it turns out that additional costs, updates, copyright transfer and other functions increase the main price. This practice is very bad. As a result, if a given institution is taken over by one or two IT companies, it is difficult for them to free themselves from their grip.
Although in recent years approximately USD 4.2 billion has been spent on computerization of public administration and central offices with the use of EU funds under the “Information Society – building electronic administration” project of the Innovative Economy Operational Programme, in terms of e-administration it is only 42nd in the United Nations ranking (Report “E-Government Survey 2014″). We are ahead of Colombia or Montenegro, and not only our closest neighbours, but also Chile or Kazakhstan. Experts emphasize that it is largely the result of pathologies affecting orders for IT systems in public administration, and dependence on a single manufacturer or supplier of software.
– Procedures should be simplified so that the price criterion is not always the most important. All these additional pricing elements, which are imposed on state institutions, must be included in one package. In particular, they are often the institutions on which our daily lives depend, and they pay pensions and benefits to the office. These are sensitive things connected with the state’s information and communication technology,” Roszkowski points out.
The criteria for selecting companies to implement IT projects are often unclear. The President of the Jagiellonian Institute recalls the situation in the Agency for Restructuring and Modernisation of Agriculture. In the tender for the maintenance and development of the IT system (SIA), Atos USA was initially selected as the company with the cheapest offer (USD 58.9 million). The offers of other companies ranged from 73 to 109 million USD.
– This was also the case in previous governments. This causes very high emotions, and the way of selecting entities and assessing the final cost is very unclear and entails high costs for the state budget – emphasizes the expert.
Public administration IT systems often have problems with data security and are vulnerable to hacker attacks. Therefore, it is important to choose a system provider not only in terms of price, but also in terms of e.g. competence. NIK points out that 1/3 of the offices visited were not audited on information security in IT systems. In 16 units where the annual information security audit was carried out, the recommendations concerned strengthening the security of information processing in IT systems. However, as Roszkowski argues, the problem is not data security, but the way of creating entire mechanisms.
– The Ministry of Digitization should have a much greater influence on how these systems are built and, above all, on the principles on which they are built. In each of the large systems that supports databases of Americans, where ministries perform their statutory tasks, all cyber security should be centralized – emphasizes Marcin Roszkowski.