New rules for IT contracts will ensure maximum value for taxpayers
The government has published “red lines” for its IT contracts to ensure maximum taxpayer value, the Minister for the Cabinet Office Francis Maude announced today. The new rules have been published to encourage competition in the sector, and free the government from longstanding inflexible contracts with IT providers.
The new rules are aimed at encouraging the widest possible range of suppliers to compete for public sector technology contracts and ensure the government acts as an intelligent customer. Smarter purchasing realised savings of £3.8 billion in 2012 to 2013 alone; and a tighter grip on IT spending, along with progress on the digitisation of services, saved a further £500 million. Better procurement is central to the government’s wider commercial reform plans to strip out wasteful spend and harness the government’s buying power to get the best deal for the taxpayer.
The “red lines” published today state that:
- no IT contract will be allowed over £100 million in value – unless there is an exceptional reason to do so, smaller contracts mean competition from the widest possible range of suppliers
- companies with a contract for service provision will not be allowed to provide system integration in the same part of government
- there will be no automatic contract extensions; the government won’t extend existing contracts unless there is a compelling case
- new hosting contracts will not last for more than 2 years