New Government ICT framework must deliver on IT needs as well as drive competition, says expert

The Government is in the process of setting up a new IT procurement framework in an effort to broaden the number of suppliers currently involved in delivering Government IT services.

Framework agreements allow buyers to obtain services from a list of suppliers that have won the right to be included on that list. Government buyers can then use those suppliers without having to run a full procurement and tendering process.

The tendering process for the new Digital Services Framework closed last week, and the Government is now in the process of evaluating the bids submitted. Winning bidders are expected to be announced in September, with about 50 different suppliers expected to be selected for inclusion on the framework, according to a report by the Financial Times.

The framework is being launched with a view to finding suppliers that can provide "digital project build services", with the aim being that it will allow the Government to "move away from legacy IT and big contracts with a few large systems integrators", the Cabinet Office said previously.

Expert in IT contract negotiations Simon Colvin of Pinsent Masons, the law firm behind Out-Law.com, said that the new Digital Services Framework can help boost competition for Government IT contracts but that it must also ensure that suppliers selected can offer Government departments what they are looking for.

"The challenge will be making sure the framework is broad enough and comprehensive enough to suit the needs of Government ICT procurement and at the same time ensure there is a suitable suite of suppliers to provide those IT services and compete to deliver value for money proposals," Colvin said. "It's imperative for the Government that the framework includes a number of suppliers that can meet the specific requirements of departments and which are willing to provide keen prices during the bidding process for contracts."

The Government ICT market is currently under scrutiny by the Office of Fair Trading (OFT).  The regulator launched an information gathering exercise earlier this summer in a bid to find out more about competition in the market for the supply of ICT goods and services to the public sector.

Colvin said that the Digital Services Framework initiative may come too late to influence the OFT's review of competition in the Government ICT market, but said that it was a "positive step for boosting SME participation in Government IT services delivery".

"The Government has always tried to push the SME agenda, and the Digital Services Framework is another good example of that effort. A framework with a number of suppliers on it will be good for increasing competition whilst driving down procurement costs," he said.

According to data published by the Cabinet Office (35-page / 1.17MB PDF) last week, 10.5% of all Government procurement expenditure in 2012-13, £4.5 billion, made its way directly to SMEs. The figure is up from £3bn spent by central Government departments on services offered by SMEs in 2009, it said.

The figures also revealed that SMEs have also won £4bn of business from the Government indirectly in 2012-13 as a result of sub-contracting arrangements set up with major Government suppliers.

The Cabinet Office said the figures show that the Government is "on track" to meet its target for SMEs to win 25% of the business being outsourced by the Government, either directly or through the supply chain.

"All departments have developed plans for making their contributions to the 25% aspiration, and lead ministers have been appointed to drive their delivery and ensure SME-friendly practices are mainstreamed into their departments," Minister for Political and Constitutional Reform Chloe Smith said. "We are also seeing more and more prime contractors recognising the value that SMEs can offer, increasing opportunities for smaller suppliers in their own supply chains."

"The UK is competing in a global race. By opening up opportunities for SME suppliers we will stimulate growth and jobs, as well as giving government access to SMEs’ creativity and innovation," she added.