By Tony Collins
Earlier this week we reported IBM’s disclosure that it is in dispute with Somerset County Council, its lead partner on a joint venture Southwest One.
In its annual statement on Southwest One, a joint venture owned by IBM in which Somerset County Council is the lead partner, the company said that a dispute with its partners had gone to mediation which had failed.
Now it turns out that the dispute has escalated: IBM, in the form of Southwest One, is suing Somerset County Council according to BBC online.
On its website Southwest One says how “collaboration and cooperation can help to deliver procurement savings”. But it is largely over the level of procurement savings that Southwest One is going to court.
Southwest One’s statement
Southwest One said it had taken court action because an agreement could not be made with Somerset Country Council.
“Southwest One complies with its contractual obligations, providing a robust service to all partners which includes the identification of substantial procurement savings.
“Throughout the course of the contract, Southwest One has secured procurement savings that amount to £22 million which have been approved by all partners, with contracts in place to deliver a further £71 million of savings.
“Southwest One has also successfully achieved external recognition from the Cabinet Office for Customer Service Excellence and operates an award-winning Customer Contact Centre.”
Somerset County Council said
“We are in disagreement with Southwest One about the quality of the procurement service and what payments Southwest One is entitled to as a result of savings made by getting better deals through the joint venture.
“As set out in the terms of the contract, we had hoped we would be able to settle this issue through mediation and negotiation.
“It is now apparent that this will not be possible and it is disappointing that we are in the position of going to court.
“It is paramount that we look after the best interests of tax payers and take action when standards of performance and quality are not being met.
“We will therefore robustly defend our position and make counter-claims where we believe we have suffered losses.
“Somerset County Council will not be commenting any further on this issue at this stage.”
Thank you to Dave Orr for drawing my attention to IBM’s legal action.
As procurement expert Peter Smith asks: what is a procurement saving? Amid a complexity of transactions the phrase “procurement saving” can mean almost anything.
Southwest One was supposed to be a partnership between IBM and three public authorities: Somerset County Council, Taunton Deane Borough Council and Avon and Somerset Police.
Now the primary beneficiaries will be lawyers … And so we plough along, as the fly said to the ox.