Chosen by more than 90% of clients 'for administrative convenience'
'Coalition Responsibility' according to the Consortium Investment Ratio
Many cases of litigations by members when problems arise
The software (SW) and information technology (IT) service industries urged the improvement of the joint implementation method, which is to jointly implement public SW projects and take responsibility, arguing that the method is no different from the 'modern version of coalitionaccountability system'. The industry demanded the government to come up with alternatives, such as establishing guidelines for ordering bodies to review the implementation method first or having them discuss implementation methods with business operators.
On June 6, major large, small, and mid-sized software and IT service providers presented the problems of the joint implementation method and the reasons and necessity for its improvement in a recent closed meeting held by the Ministry of Economy and Finance on thepublic project implementation methods. The industry plans to prepare a report and suggest improvement for the system soon. In the joint performance method, one ofthe types of joint contracts, consortium members jointly carry out the contract according to a certain investment ratio and bear joint responsibilities. This contrasts the sharing implementation method, which is to execute a contract separately and have each party bear the responsibility.
There have been many cases of joint implementation method in which the consortium members even filed litigation over the matter of accountability when a problem occurred.KCC I&C, SNET ICT, S3I, and Sysone are about to have a legal battle among themselves over responsibility for the business loss of Korea Securities Depository.
The contract rules of the Ministry of Economy and Finance allow the ordering party to choose between joint and shared implementation methods. More than 90% chooses the joint implementation method, because in the event of a problem, only the mainbusiness conductor with the largest stake in the consortium needs to be held responsible.
The ordering bodies thus prefer the joint implementation method regardless of the nature of the businessbecause it is easier to manage.In some cases, joint implementation method is necessary due to the nature of the business or ambiguous business boundaries among the involved parties. However, it is very clear that a change is necessary since more than 90% of the clients choose the joint implementation method for administrative convenience.
As the problems continue to arise endlessly, the 1st contract system innovation task force (TF) operated by the Ministry of Strategy and Finance last year also addressed the implementation method. However, it was not selected as a task for improvement due to lack of discussion time. The TF decided to discuss it later, which is why this conference was held. Taking this meeting as an opportunity, the Ministry of Economy and Finance started listening to the industry opinions on the joint implementation method. An official from the Ministry said, “We tried to listen to as diverse opinions as possible since we didn’t intend to reach a conclusion in this meeting. We have not yet decided whether to discuss this issue in the 'Contract System Group', the 2nd contract system innovation TF following last year."
The SW/IT service industry hoped to improve the system by presenting the agenda in its second TF. As the shared implementation method is highly related to the 'clarification of requirements', the industry claims that the ordering party should come up with a plan to choose more of them.
An official from a large IT service company said, "Many ordering parties specify the joint implementation methods in their request for proposals (RFP), and we hope that the contract rules will improve so they can decide on how to conduct business in consultation with the consortium." Another IT service company official said, “In order for the ordering bodies to choose the shared implementation method, the consortium must clearly propose the division of tasks, roles, and responsibilities among the participating firms. In this case, government recommendations or guidelines are needed for the ordering bodies to review the shared implementation method first.”
The official added, "Even if the business is started by dividing the work in the shared implementation method, the cost or scope of the business continues to change. This can be complemented by continuing consultations among consortium participating firms during the business period."
By Ho-cheon Ahn, staff reporter (email@example.com)