Last week, the Digital Outcomes and Specialists (DOS) framework celebrated its fifth birthday and the landmark was probably recognised in its birthplace, the UK’s Government Digital Service (GDS) with cake – that’s the way they do things in the offshoot of the Cabinet Office. Five is a big birthday in a youngster’s life – starting school, developing a little independence, and a chance to assess development to date – so it seems like a pertinent time to look at what DOS has delivered since April 2016.
Borne out of the short-lived Digital Services framework, DOS was designed to provide a quick and effective route to market for public sector buyers to acquire individuals and teams in supporting digital transformation initiatives via a mechanism that fully satisfied public procurement regulations. It was developed using similar principles to G-Cloud, with regular iterations to allow new suppliers to join at the annual refreshment of the scheme, with a specific aim of broadening the supply chain and encouraging small and medium enterprise (SME) providers to deliver digital services to government.
Over the five-year period, public bodies have now spent over £2.7bn on acquiring digital services through the DOS framework.
In fiscal year 2016/17, covering the first nine months of the framework, £40.6m of business was transacted through it, with 127 suppliers winning contracts, 75% of whom were SMEs. The revenue split, however, was 63%/37% in favour of large providers. It should also be noted that significant revenue for Digital Services at this time was still being accrued through Digital Services 2 (DS2) and G-Cloud Lot 4, which had been extensively used to that point for ‘body shopping’. For the same period, £61m flowed through DS2 and £539m of services business was conducted through G-Cloud.
Fast forward to the fiscal year just ended, and usage of DOS has increased dramatically with the framework accounting for £884.7m of expenditure. The split between large and SME providers for both the number of winning suppliers (75% SME, 25% large) and aggregate revenues (65% large, 35% SME) has remained similar to five years ago. Just over 400 suppliers collected earnings through DOS, which would seem to indicate genuine growth in the supply chain. And this is real incremental spending, not a move from the support service lot of G-Cloud as this route to market also generated £1.34bn of expenditure in 2020/21, with 42% of that business being won by more than 650 SMEs.
Over the five-year period, public bodies have now spent over £2.7bn on acquiring digital services through the DOS framework, which is now under the singular control of the Crown Commercial Service (CCS). This makes it one of the most successful ICT frameworks ever managed by a central government department in the UK. With CCS taking a 1% management fee from buyers, it has certainly boosted the coffers of the Trading Fund, but therein also lies an obstacle to one of CCS’s aims. The agency has long been looking to expand its customer base beyond its central government heartland, yet continually fails to attract large numbers of buyers from the wider public sector. Just 7.7% of expenditure through DOS is by these organisations overall, and has fallen to 5.8% in the last 12 months. Whilst the coronavirus pandemic has clearly played a part in that, CCS management will be concerned at the fall-off in custom from outside of central government.
Expanding the DOS framework beyond central government
The procurement body will surely want to look in more detail at how it can provide greater appeal to local authorities, health trusts and police forces if it is to deliver on its promise of being the premier professional buying outfit across the public sector. It should also be concerned about the potential loss of its core customers. The Department for Work and Pensions (DWP) has recently set out plans for its own Digital Supplier Resourcing framework to cover many of the services that DOS currently delivers. Whilst DWP spend through DOS represented just 3% of the total in 2020/21, withdrawal from use of the framework could set a dangerous precedent. If the Home Office or Ministry of Justice with their agencies were to follow suit, it would be a catastrophic loss for CCS.
The Crown Commercial Service can therefore not sit on its laurels and bask in the success of the Digital Marketplace, which comprises DOS, G-Cloud and Crown Hosting. DOS 5 is now active and will run to January 2022; CCS must undertake serious consultation with its customers to understand how the sixth iteration needs to be tweaked to maintain the upward revenue trajectory. The recent announcement that G-Cloud 13 has been postponed and G-Cloud 12 extended will heighten fears that CCS has dropped the ball.
It appears to have been distracted in recent months by launching a series of Dynamic Purchasing Systems (DPS) which are alternative routes to market for allied technology products and services. Although they provide greater flexibility, particularly for suppliers who can apply to join them at any point in their lifetime they can lead to confusing choices for buyers.
If digital transformation in government is to be reignited as we emerge from a year of chaos, then CCS needs to underpin it by taking a strong lead in both consolidating and building on the success of DOS.
Rob Anderson is principal analyst for central government at GlobalData Technology.