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June 28, 2012

Easy ride for Government ICT suppliers over

As part of the Government's cuts, it has been looking at performance reviews for its suppliers - including ICT.

By Allan Swann

Whitehall will not tolerate poor performance from its ICT suppliers, and will be introducing new performance measures to assess companies’ worthiness before they obtain any new Government contracts.

Cabinet Office Minister Francis Maude has warned ICT suppliers that the department’s spending controls are set to become a ‘permanent way of life’, and that poorly performing companies relying on the bloat of administrations past will find it tough to get work.

"To deal with the deficit we inherited in 2010 and to protect every taxpayer’s pound we are relentlessly driving efficiency savings," he said.

Maude wants the department to run in a more businesslike fashion, and as such is meeting 20 of the Government’s key suppliers to update them on his progress and consult on the new measures.

In 2010, the Conservative-Liberal Democrat Government introduced temporary cuts to spending on areas including advertising and marketing spend, ICT, recruitment, property and consultancy.

Maude says the initiative spawned £3.75bn in savings across 2010/11, and projects efficiency savings for this year to top £5 billion.

"Our cross-Whitehall controls on spending have made billions of cash savings for the taxpayer – something that has never been done before. That’s why I’m pleased to confirm that our controls will be a permanent feature, helping to change fundamentally the way government operates," he said.

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"I want Whitehall procurement to become as sharp as the best businesses’. Today, I will tell companies that we won’t tolerate poor performance and that to work with us you will have to offer the best value for money."

The 20 suppliers that met with Maude included industry luminaries such as BT, HP and IBM, alongside several smaller partners (see box). Worth £15bn to the Government’s spend, Maude was seeking feedback as well as negotiations concerning bulk buying contracts and discounts.

The new system will monitor suppliers’ performance for the Crown as a whole, which means that will be taken into consideration during the procurement process.

Suppliers with poor performance may therefore find it more difficult to secure new work with the Government.

Intellect, the UK’s technology trade association, was not impressed.

"We welcome the progress made to date which we hope will benefit both government and industry, including SMEs. However, the big prize for the public sector will come from using information technology to transform its service delivery and that is the agenda we want to engage with now. There are already examples of technology being used to improve public services but there is scope to go much further," said Intellect’s director general, Julian David.

Andrew Gilbert, Managing Director at data centre and communications company Node4, believes the move is a good one, and will allow smaller players into the game.

"The government needs to embrace the fact that there are many high quality suppliers out there who have the ability to provide services which are a far better value for money proposition for tax payers. The Government needs to diversify its supply chain and consider companies who have strong proven track records and operate from a much more competitive cost base."

"In these austere times, small and medium sized enterprises have greater agility to deliver specialist services such as cloud computing, at more flexible price points without dangerous compromises that could leave highly sensitive data exposed to exploitation."

The 20 suppliers
– Accenture
– Airwave
– Atkins
– Atos
– Babcock
– Balfour Beatty
– BT
– Capgemini
– Capita
– Carillion
– G4S
– HP
– Interserve
– Kier Group
– Logica
– Serco
– Sodexo
– Steria
– Telereal Trillium


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