Article by Charlotte Walker-Osborn Head
of TMT Sector and Sam Jardine Associate,
What? Last year the Government announced that
it would increase small and medium-sized enterprise (SME)
procurement to 25 per cent of public sector contracts (see, for
So what? This was seen as positive news for
smaller providers of IT services, as they have traditionally fared
less well when securing Government IT projects through a
procurement widely viewed as favouring the larger suppliers.
Additionally, the announcement comes at a time when the traditional
approach to procuring and managing Government IT projects is being
brought under increased scrutiny.
The Public Administration Committee released a
report earlier this year, which stated that poor performance of
Government IT projects was linked to the small number of suppliers
getting the bulk of the contracts. The report goes on to cite a
National Audit Office statistic, that:
"at present 80% of central government IT work is undertaken
by 18 suppliers".
Conservative MP Bernard Jenkin, who chaired the committee, said (as
reported, for example, on
"According to some sources the government pays between
seven and 10 times more than the standard commercial rate for its
work. However, the government does not collect the information
needed to verify these claims."
Irrespective of the exact data required to verify these claims,
it seems clear there is consensus that better value could be
obtained with respect to Government projects and this might also
have a positive impact on their overall delivery. This is the
background and impetus for the proposal to open up Government IT
procurement to SME suppliers. In theory, opening up procurement in
this way will make the process more competitive. This in turn may
drive down the price and increase the innovation of the services
that SME suppliers pitch to central Government.
There is no doubt that this all sounds good for Government and
tax payer alike. However, it looks like this process of opening up
is yet to get under way.
Some of the problems cited by SME IT firms interviewed by
Computer Weekly recently include the entrenched interests
of traditional systems integrators, large forms to complete and the
need for cultural change within Whitehall. In some sense, this is
to be expected at first. The change in Government policy will take
time to be adopted and in large organisations it can take time for
cultural attitudes to shift.
In a time of increased, and continued, austerity where the
emphasis is to deliver more with less, SME IT suppliers may form
part of the solution. However, even when the Whitehall realities
catch up with the policy of the day, SMEs will have to prove they
deserve a seat at the table.
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