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    Part II Preparation and vendor selection

    The most common selection mistakes

    ~11 min readUpdated Lukáš Mikula

    Most expensive mistakes happen before the vendor writes the first line of code. In this chapter, you will find them ordered by project step: the decision, the budget, the brief, the selection, and the contract. Czech cases show that ministries make the same mistakes too.

    Twelve mistakes that keep recurring

    This chapter summarizes the first two parts of the guide. For each mistake, you will learn how to recognize it and how to fix it. The details are in the chapter the last column links to.

    Not all mistakes cost the same. The ones in the contract are the hardest to fix, because after signing you have a weaker negotiating position. Mistakes in the decision and the budget, on the other hand, stay hidden the longest: the project proceeds according to plan, but the plan itself rests on wrong assumptions. It is like following a navigation system with the wrong destination entered. You drive smoothly and on schedule, and you only find out at the end of the trip that you are somewhere other than where you wanted to be.

    The 12 most common mistakes in vendor selection
    MistakeHow to recognize itWhat to do
    Decision
    1. You custom-build a standard business functionyou want your own accounting, HR, or CRM because “licenses are expensive”calculate both options over 5 years; custom-develop only the part that sets you apart (ch. 2)
    2. A project without an owner and a measurable goalthe “owner” is a committee; the goal is “to make things more efficient”appoint an owner with a mandate and time, 2–4 measurable goals (ch. 5)
    Budget
    3. A budget for development onlythe business case lacks operations, maintenance, further development, and your people’s timeTCO over 5 years (ch. 4)
    4. A fixed price for an unclear briefa 2-page RFP; proposals differ several times overpaid analysis, then stages or T&M with a cap (ch. 10)
    Brief
    5. A brief written at a desk or by a single vendornobody talked to the market or the usersRFI or market consultation, paid discovery (ch. 6, 8)
    6. Unknown data“we’ll send the data after signing”a description of the data and an anonymized sample in the RFP; budget data migration separately (ch. 6)
    Selection
    7. The lowest price decidesprice weighs 80% or more; quality without described scoringquality 50–70%, described levels, price over 5 years (ch. 9)
    8. Nobody verified the team and referencesreferences are logos; different people at the presentation than in the proposalan interview with the team, phone calls to customers, key personnel in the contract (ch. 9)
    9. The type of vendor does not match your ability to manageyou hire capacity, but you have neither a product owner nor an architectorder a turnkey deliverable, or strengthen your own team (ch. 7)
    Contract
    10. A contract for work without a license and codelicense “according to the terms and conditions”; code only at the endan exclusive license with the right to have another company make modifications, code after every sprint (ch. 11)
    11. One-sided termsno acceptance deadline, penalties only for the vendor, your cooperation undefineddeadlines for both sides, reasonable penalties with a cap, measurable cooperation (ch. 11)
    12. No access to data and no exit plandata export for an extra fee; the exit “will be agreed”free export in an open format, an exit plan with a price and deadlines (ch. 11, 24)

    Test

    How many of the 12 mistakes are you making?

    Check what applies to your project right now. Be strict with yourself; nobody will see it.

    • A standard function is worth buying; build custom only what sets you apart (chapter 2).

    • Without an owner, nobody decides on priorities, and without a measurable goal you cannot tell whether the project succeeded (chapters 5 and 6).

    • Operations, maintenance, and further development over several years often exceed the price of development (chapter 4).

    • With an unclear brief, the estimate can be off by up to four times; you pay for the risk through a markup or amendments (chapter 10).

    • A brief from one vendor fits mainly that vendor; the others then bid blind (chapters 6 and 8).

    • Data migration is the most often underestimated part of a project (chapter 6).

    • With such a weight, quality has little effect, and an underpriced proposal can win (chapter 9).

    • Logos on a website are not references, and different people may work on the project than at the presentation (chapter 9).

    • With staff augmentation, you are responsible for the result (chapter 7).

    • Without a license, you may not have the system modified by another vendor (chapter 11).

    • A one-sided contract deters good vendors and may not hold up in a tender (chapters 11 and 12).

    • Without them, switching vendors is expensive or impossible (chapters 11 and 24).

    Checked 0 of 12

    Evaluation: add up the points of the checked statements

    0 points

    A good foundation

    You are not making any of the typical mistakes. Keep it that way during development, and continue with chapter 14.

    1–3 points

    A few weak spots

    Every mistake you checked can cost you money. Fix them before you sign the contract. Each one links to the chapter that explains how.

    4 or more points

    Stop and fix them before you sign

    Four or more mistakes at once is a recipe for a project that goes over budget. Go back to the brief and the contract before you choose a vendor.

    Which mistake should you fix first?

    If you checked several items in the self-test, do not simply go through them in order. Start with the ones that are hardest to fix after the contract is signed:

    • The contract (mistakes 10–12). Secure the license, code handover, access to data, and the exit plan before signing. After that, your position is weaker and every change costs money.
    • The product owner (mistake 2). Without a person who makes decisions, even a project with an excellent vendor grinds to a halt.
    • The pricing model and the data (mistakes 4 and 6). Both determine whether the proposals can be compared at all.

    Selection mistakes (7–9) can still be mitigated along the way, for example with a paid trial sprint or by replacing key personnel. And if it turned out that you are building a standard business function (mistake 1), stop completely: the cheapest project is the one you do not have to do.

    Ministries make the same mistakes

    Companies do not publish their failed projects, but for the state, audit results are available. Audit conclusions of the Supreme Audit Office (NKÚ) and decisions of the Office for the Protection of Competition (ÚOHS) are therefore the best public textbook: even an institution with a legal department and a budget of hundreds of millions can make the mistakes in the table. The table draws mainly on audit conclusions and decisions. Two good examples rely on secondary sources (an article by the vendor association and a legal analysis). The chapters in the last column discuss the cases in detail.

    Czech cases and the mistakes they illustrate
    CaseWhat happenedMistakeDetails
    Digital building permit system (Ministry of Regional Development, MMR)ÚOHS canceled the tender over missing acceptance deadlines ÚOHS, S0321/2023, then prohibited performance of a contract awarded through a negotiated procedure without prior publication (JŘBU) ÚOHS, S0788/20236, 11ch. 12, 20
    Benefit systems of the Ministry of Labour and Social Affairs (MPSV)failed replacement of the systems, disputes over acceptance of stages, problems with data migration and the ministry’s cooperation; a report of a breach of budgetary discipline worth CZK 737 million NKÚ, audit conclusion KZ 17/226, 11ch. 11
    Central government purchasing and the Public Procurement Information System (ISVZ)a single contract in four years; the ministry would have paid the vendor for its own data NKÚ, audit conclusion KZ 17/242, 12ch. 2, 24
    Travel document system (Ministry of Foreign Affairs, MZV)the old system was not shut down; its support rose from CZK 1.2 million to CZK 15.3 million a year NKÚ, audit conclusion KZ 24/263, 12ch. 4
    e-Sbírka and e-Legislativa (Ministry of the Interior, MV)a contract changed by amendments that NKÚ described as contrary to the law; MV disagrees NKÚ, audit conclusion KZ 24/044, 5ch. 18
    Basic registers (MV, Basic Registers Authority – SZR)4 of 5 registers in vendor lock-in, contracts without competition NKÚ, audit conclusion KZ 23/0510, 12ch. 23
    ADIS tax system (General Financial Directorate, GFŘ)a contract from 1992 without modification rights, support awarded through JŘBU, a dispute that went all the way to the Court of Justice of the EU CJEU, C-578/23 NSS, 8 As 314/202110ch. 24
    Kreativní Česko (Ministry of Culture, MK), a good examplemarket consultation, quality at 70% weight, ten interested bidders, and no objections Lupa.cz, 2026prevents 5, 7ch. 8
    HR system of the Ministry of Transport (MD), a good example with a caveata requirement for code and rights as protection against lock-in; the courts require a proportionality test epravo.cz, 2026prevents 10ch. 11

    Cases where the details come only from the press (e.g., EKIS) are not included in the table.

    How it goes wrongHow to do it right
    How it goes wrong“We’ll build our own CRM; licenses are expensive.”How to do it rightBuy a standard product; custom-develop only the part that sets you apart.
    How it goes wrongBudget = price of development.How to do it rightA 5-year budget: development, operations, maintenance, further development, internal time.
    How it goes wrongA fixed price for an idea.How to do it rightPaid analysis, then a fixed price per stage.
    How it goes wrongThe lowest price won.How to do it rightQuality 50–70%, a verified team, a trial sprint.
    How it goes wrongA contract for work, license “later.”How to do it rightAn exclusive license with the right to have another company make modifications, code on an ongoing basis, an exit plan.
    How it goes wrongData “somewhere at the vendor’s.”How to do it rightFree export in an open format at any time.
    • For a public authority, the same mistakes can also have legal consequences: cancellation of the tender, a fine from ÚOHS, an NKÚ finding, or a breach of budgetary discipline.
    • The public-sector versions of these mistakes: asking for an opinion of the Office of the Chief Architect of eGovernment (OHA) only after the contract has been advertised, criteria copied from the last tender, an unrealistic schedule patched up with amendments, and JŘBU because of a dependency the authority created itself.
    • Chapter 12 describes step by step how to prevent them.

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