Here in New Zealand we’ve had a lot of press recently a Novopay, which is a system to pay school teachers that has suffered from significant, embarrassing (and very widely-publicised) problems.

I was recently asked to write an article on the subject for the Institute of IT Professionals (IITP), explaining how I believe the emphasis on price, in tender evaluation, is probably a significant root cause of such failures – and how there is a much better way to structure tenders.  The article seems to have been very well received – with one (male) reader even going so far as to tweet, “Who is John Rusk and can I have his babies?”  (Which is both the best and the weirdest feedback I’ve ever received!)

The article is here: Price-based tendering to blame for Novopay?  Make sure to read the whole article – including the comment at the bottom from Cain Duell, which describes a common objection to my argument, and my reply which covers important stuff that didn’t make it to the original article.  (Acknowledgement: some of my reply to Cain’s question was inspired by an excellent chapter in Steve McConnell’s book Software Estimation.)

A couple of small extracts:

Make the vendors compete, then lock the winner into their quoted price. That’s [the presumed] recipe for success. But it’s a lie. After 15 years on the inside [of bid preparation], I know it’s a lie. In the industry, we all know. But we dare not say, because our sales and livelihoods depend on playing by the rules of the game; no matter how flawed that game might be.

…If you get a bunch of bids within 10% of your budget, it doesn’t mean that expert estimators agree with your budget, but merely that expert sales people have discovered it.