In late December 2006, the German Federal Armed Forces (Bundeswehr) commissioned a consortium consisting of Siemens Business Services (SBS) and IBM to modernize and manage its non-military information and communications technology (“white IT”) under the HERKULES project.The HERKULES project is designed to update the Armed Forces’ data centres, software and applications, PCs, telephones, and voice and data networks to modern standards. This includes maintenance and support of desktop software, SAP software as the large-scale back end, web-based applications belonging to the intranet of the Bundeswehr, and communication programs such as IBM’s Lotus Notes. Siemens will be responsible for operating and modernizing the decentralized systems at more than 1,500 locations in Germany, encompassing 140,000 PCs, 7,000 servers, 300,000 fixed-network telephones and 15,000 mobile phones. In terms of objectives (Newman: 2001), the BWI IT was created predominantly to bear the enormous financial upfront investment of the project. The yearly parliamentary approved defence budgets were neither flexible nor big enough to engage a project of this dimension.
The Social Science Institute of the Bundeswehr (SOWI) has been charged with the evaluation of HERKULES. In my functional capacity I have had the opportunity to contribute actively to the performance evaluation to date. This paper outlines the scope and schedule of HERKULES and identifies the major (dis-)advantages of this PPP compared to unilateral public policy implementation. Special focus is given to the question of risk sharing and the project inherent partnership dynamics. Hereafter, potential room for improvement and areas of concern are being analysed. The paper concludes with a brief lessons learned chapter.
Table of Contents
1 The HERKULES project
2 Implementation of HERKULES
2.1 Risk sharing in HERKULES
2.2 Partnership Dynamics
2.3 Evaluation
3 Areas of concern and room for improvement
3.1 What constitutes the core of public services?
3.2 Cost control and efficiency gains
3.3 Public Involvement
4 Lessons learned
5 References
5.1 Block 1 and 2 Resources
5.2 Field Readings
5.3 External Resources
Objectives and Topics
This paper examines the HERKULES project, a major public-private partnership (PPP) initiated to modernize the IT infrastructure of the German Federal Armed Forces (Bundeswehr). The primary research focus is to evaluate the project's performance, identify the advantages and disadvantages of such a PPP compared to traditional public policy implementation, and analyze critical factors like risk sharing, partnership dynamics, and public involvement.
- The structure and implementation of the HERKULES project
- Risk management strategies within the PPP framework
- Performance evaluation and user satisfaction
- Cost control and efficiency gains in public service delivery
- The challenges of public involvement and democratic accountability in defense policy
Excerpt from the Book
1 The HERKULES project
In late December 2006, the German Federal Armed Forces (Bundeswehr) commissioned a consortium consisting of Siemens Business Services (SBS) and IBM to modernize and manage its non-military information and communications technology (“white IT”) under the HERKULES project. A company called BWI Informationstechnik GmbH (BWI IT) has been formed to supply the relevant IT services. Siemens and IBM hold 50.1% of the shares in a 25.05%/ 25.05% split, while the German Federal Government holds 49.9%. The Bundeswehr is represented on the board of directors, and the consortium is open to audit by the military, the German Defence Ministry and the General Accountants' Office. The 10-year contract is worth approximately EUR 7.1 billion. This is said to be the largest public-private partnership (PPP) in Europe and up to 2,950 German Federal Armed Forces IT employees have since been working within the project. By the year 2016, BWI will revert to 100% Bundeswehr control. Thus, although HERKULES can not be termed a „PFI in its purest DBFO form” (Broadbent/Laughlin 2003: 204), it features a private consortium acting as provider of a “service package” that could not have been delivered by public sector agents alike. Built-up of the IT infrastructure as specified by the public sector and the initial operation of all white IT is at the heart of the HERKULES PFI service package. However, unlike in classic PFIs, the IT infrastructure will become public property at the end of the contract.
Summary of Chapters
1 The HERKULES project: This chapter provides an overview of the commissioning of the HERKULES project, detailing the consortium structure, financial scope, and the specific objectives of this large-scale PPP.
2 Implementation of HERKULES: This section outlines the phased implementation plan and applies principal-agent theory to analyze the complexities of risk sharing, partnership dynamics, and the methods used for performance evaluation.
3 Areas of concern and room for improvement: This chapter critically analyzes the ethical and practical challenges of the project, including the definition of core public services, cost control efficiency, and the lack of public involvement.
4 Lessons learned: This chapter summarizes the key takeaways from the HERKULES project, highlighting the necessity of clear policy objectives and the difficulties in establishing real competitive pressure within long-term procurement contracts.
5 References: This section provides a comprehensive list of all scholarly resources, field readings, and external documents cited throughout the paper.
Keywords
HERKULES, Bundeswehr, Public-Private Partnership, PPP, IT infrastructure, Principal-agent theory, Risk sharing, Performance evaluation, Public policy, Defense reform, Efficiency, Accountability, BWI Informationstechnik, Contracting out, Public service provision.
Frequently Asked Questions
What is the core subject of this paper?
The paper focuses on the HERKULES project, a significant public-private partnership between the German Federal Armed Forces and an industry consortium to modernize non-military IT systems.
What are the primary themes explored?
Key themes include the organizational structure of the partnership, mechanisms for risk sharing, the evaluation of service quality, cost efficiency, and the democratic implications of involving private entities in defense-related tasks.
What is the ultimate goal of the research?
The aim is to identify the major advantages and disadvantages of this specific PPP model compared to traditional government delivery, and to draw lessons for future public policy implementation.
Which scientific theory is applied?
The author primarily utilizes the principal-agent theory to analyze the contractual relationships and risk distribution between the public sector and the private consortium.
What does the main body cover?
It covers the implementation phases, an analysis of partnership dynamics, performance evaluation through surveys, concerns regarding the "core" of public services, and the impact of the project on cost-awareness.
Which keywords best characterize the work?
The work is characterized by terms such as HERKULES, Bundeswehr, PPP, risk sharing, performance evaluation, and defense reform.
How is user satisfaction with the new IT services measured?
The Social Science Institute of the Bundeswehr (SOWI) conducts surveys of end users (soldiers) and commanding officers to evaluate both the quality of the results and the quality of the internal processes.
What is the primary criticism regarding cost management?
Critics, including opposition politicians, have raised concerns about whether the project will actually yield long-term savings, noting that the total cost increased during negotiations and that there is a lack of competitive pressure due to the long-term nature of the contract.
- Citar trabajo
- Dipl.-Pol. Michael Pietsch (Autor), 2011, The HERKULES project, Múnich, GRIN Verlag, https://www.grin.com/document/210981
