Incumbent suppliers are blocking other firms from providing public sector IT solutions, claimed the Office of Fair Trading (OFT)yesterday.
The OFT’s market study found that existing ICT service providers are stifling competition by creating "significant" costs for government organisations to switch to another firm, because of the number of employees trained and licensed on the existing software.
The body said it found scope for improvement in the purchase and supply of public sector ICT, saying competition "could work better" after a total expenditure of £13.8bn in 2011/12.
The OFT’s project lead on the study, Rachel Merelie, said: "The market supplying ICT products and services to the public sector is worth around £14 billion and is not working as well as it should. In some areas entry barriers are high and there is little switching between suppliers.
"The public sector needs better information and expertise so it is able to judge whether ICT suppliers are delivering good value for money. Companies that supply ICT goods and services should also be more transparent and provide better information to their public sector customers."
The OFT’s top findings include:
– The government has overly complex procurement practices are time consuming and costly
– The process of gaining security clearance is also too expensive and slow
– Public sector buyers lack the industry knowledge to identify the most efficient solution
– A lack of routine data collection means the public sector can’t challenge suppliers on their performance
However, the body added that central government is improving its tender process by breaking large contracts into smaller chunks to open up opportunities to more suppliers.
The OFT called on the public sector to collect comprehensive data on products, prices and supplier performance, as well as saying suppliers must make their services easier to understand for public sector buyers.
