Effective veto put on £100m-plus IT contracts

Government projects and programmes that require an IT contract with a lifetime value of more than £100million will, in general, no longer be permitted, Francis Maude, the Cabinet Office minister, has declared.

In bringing individual IT polices of the coalition under a single IT strategy, Mr Maude said a “presumption” against £100m-plus IT contracts will take effect, in favour of smaller, more manageable deals.

This should result in a faster procurement process, improved project delivery – in terms of times and execution, and greater use of many smaller contractors, as opposed to continued use of a few large ones.

"We will end the oligopoly of big business supplying government IT by breaking down contracts into smaller, more flexible projects,” Mr Maude said. “This will open up the market to SMEs and new providers.”

Under the strategy, there will be a moratorium on government IT contracts of £5m, in that they will need the minister’s approval, indicating that existing ‘mega deals’ (some are worth up to £8bn) are not guaranteed a like-for-like replacement.

Also to make up the “millions of pounds” of envisioned savings, the government committed to a squeeze on data centres, with a target of reducing their costs by 35 per cent over the next five years.

An open-source mentality was promised to further cut costs, most visibly with an ‘apps store’ where suppliers across government will submit software so departments can reuse them, helping to cut duplication.

In denouncing other IT waste and inefficiency, the government said existing infrastructure was “insufficiently integrated” and systems were “too rarely interoperable,” suggesting there may be some new opportunities for suitably skilled IT staff.

These IT hires would likely be temporary, but the Cabinet Office states that, already, the “government has become over-reliant on external expertise from consultants, contractors and interim staff.”

Although central government’s intake of IT contractors is already down by about one third, no new hiring restrictions were floated in response. Still, the government’s IT Strategy adds: “This has resulted in high costs and an erosion of the skill base within government. It is essential that our workforce has the capability to successfully deliver ICT-enabled business change and services.”

Printer Friendly, PDF & Email

Sign up to our Weekly Newsletter

Keep up to date with everything in the world of contracting.


Contractor's Question

If you have a question about contracting please feel free to ask us!

Ask a question