back to article Government IT contracts to be scrutinised by UK competition watchdog

Britain's competition regulator plans to investigate whether too few suppliers command an unhealthy share of the government IT market. The Office of Fair Trading is seeking views from technology providers and purchasers working in the public sector to find out if it's tough for small businesses to bid for government contracts …

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  1. Why Not?

    only those with billion dollar turnover need apply

    lets hope they make how much tax is paid in UK and how many UK nationals hired part of the variables?

    1. Anonymous Coward
      Anonymous Coward

      Re: only those with billion dollar turnover need apply

      > how many UK nationals hired part of the variables?

      Not sure the govt cares about such things. Just recenty the project on which I was working was asked to look at off-shoring EVERYTHING! And by everything I mean design, build, and test. The advantage was that itr would cost less. And after all, saving moeny is what the government is all about right? I mean, what could possibly go wrong!!!

      AC because potentially I might be recognised

    2. LarsG
      Meh

      Re: only those with billion dollar turnover need apply

      As a small business owner that had a number of contracts with Government departments when everything was done at a local level I can tell you this.

      The Government brings in facilities management companies to take over from locally led Public sector departments. The facilities management companies then ask for tenders for the same service you had been providing but they want it done on a 'national level' which pretty much excludes any small local business that was able to operate on a local, county or regional level.

      The tenders are weighted in such a way that local businesses have no chance whatsoever of being successful.

      The resultant winners of the 'tenders' are the always the big companies.

      Lip service and bullshit again.

  2. Anonymous Coward 15

    We surveyed 300 bears regarding their defecation habits. (7 of them didn't even maul our agents.)

    1. Spoonsinger

      Re :- We surveyed 300 bears regarding their defecation habits

      but 28.5% of them shat on a pope.

  3. HailAJ

    About Time

    The main issue with getting into gov it supply is the ridiculous requirements to tender for the work. Whilst working at a local City Council i was unable to purchase desktop machines from a local HP VAR at £450 per box as opposed to the "preferred" council supplier who sold the SAME box's to the council at a little over £600

    With the amount of money wasted in local government this move is a long time overdue!!

  4. Spoonsinger

    "end the oligopoly of big business supplying government IT by breaking down contract...

    But shirely the Oli's will just register small one shot companies to do the requirement, and shut it down at either the 'this is going tits up stage' or 'yep that's completed we don't need these employed bods' stage? (Ok gov' gets the companies house registration fee, but not really what was intended I suspect).

    1. Gordon Pryra

      Re: "end the oligopoly of big business supplying government IT by breaking down contract...

      From my experience in local govt and the NHS and the choice for buying items is thus

      1) Will the company go tits up and cost me my job for buying from them

      2) Is the company owned by Friends of people further up the chain?

      Many purchasing choices should actually be classed as theft from the tax payer

      1. Juillen 1
        Black Helicopters

        Re: "end the oligopoly of big business supplying government IT by breaking down contract...

        * From my experience in local govt...

        Weird.. From mine in the NHS, it comes down to:

        1) Who will supply the service specified at the least cost.

        Friends of people upstream is irrelevant (anti fraud does like to keep an eye on those kinds of goings on).

        Company going bust is also a consideration, as is support, security and so on.. But it all comes down to being able to afford it (and the NHS really has very little money these days)..

  5. Richard 120

    Which is it?

    Does consilidating save money or does splitting things up save money?

    I'm sure I've read that both do (at different times), but from experience it costs money to do either.

  6. Anonymous Coward
    Anonymous Coward

    From the other side!

    As an ex purchaser hence anon.

    We were purchasing 500 PCs for each site. For many small biz anything more than 50 PCs is a large order and they just don't have a) The cash/bank support to fund the initial purchase. b) The staff to upscale the initial support/rollout along with the inevitable returns/replacements. They react in 2 ways, either rabbit in headlights or run a mile.

  7. Dan Paul

    Boilerplate Specs and Requirements are the issue

    The problem across the whole Government market is that ALL bid specifications and requirements were created by mentally challenged bureaucrats who have been conditioned to regurgitate the same idiotic requirements regardless of the actual application for the equipment or services.

    Then these same people are unwilling or unable to provide any clarifications previous to bidding. Then there are the bid notes that effectively say "We know we are too stupid to correcly specify what's needed but too frikkin bad, you have to cover all our shortcomings because you are NEVER getting a change order cuz that would make us look the dolts we are".

    Therefore, the bidder HAS to have "deep pockets" to cover the eventual losses, huge staff to review and find all the things that were missed in the bid package and several mind readers to help determine how to cover the really invisible screw ups.

    In addition, the intelligent bidder will know that they cannot propose a price that actually represents the work but must propose one that includes all the "Cover our Ass" extra funds. Those that don't are dead in the water.

    Small companies just don't have the resources these days to bid such a fluster cuck and survive to the final closeout.

    The government is their own worst enemy (literally & figuratively).

  8. smudge Silver badge
    Unhappy

    Framework agreements

    I have just watched Mrs Smudge's company spend a lot of time and money bidding to get into a framework agreement with a major Government department. They don't get any business out of this - they just get onto the list of companies who will be asked to tender for future work, with no guarantee of getting any of that.

    I don't know how common this is, but I've been involved in similar bids in the past.

    For a small company, that type of arrangement must be a non-starter - they simply may not be able to afford the "investment" to get into the framework agreement.

    For HMG, this will also inflate prices, because every company that makes it into a framework agreement will want to recover those costs as soon as it can.

  9. All names Taken
    Paris Hilton

    I wonder if the big companies are writing contracts for other big companies partly because those big companies did it for them (kno wot i meen 'arry?)

    Or maybe once were public services now hived off into make a shame commercial enterprises just invite bids designed for other make a shame commercial enterprises?

    Might as well air my prejudices wot?

    (Say, they ain't prejudices ooo-eee-ooo?)

  10. Otto is a bear.

    Oh dear

    Where as what has actually happened is that more business has gone to the bigger suppliers with wider contracts that only the big suppliers can underwrite. The logic being that a single supplier can recognise economies of scale, the reality is that you have a lead and a load of screwed to the ground sub-contractors.

    Most contracts are prepared by a limited number of law firms advised by IT consultancies, quite often the likes of PI and Deloitte.

    Often, and I say this as a bidding veteran, we will come up with questions they can't answer, or costs they can't accept, and the other bidders usually have the same questions and cost scales. Thus the government has to go away and think about it. Elections and new ministers also delay things, and in the past this has lead small businesses to fail while they wait for an incoming minister to say yes, no or start again.

    In general all IT suppliers are treated poorly by government, and the government gets what it pays for, luckily on a day to day basis the civil servants and IT supplier staff have a good relationship and do their level best to make it all work. TUPE means that it's usually all the same people delivering the service over the long term, regardless of the stitching on the polo shirt. It's only the management that changes.

  11. John Smith 19 Gold badge
    Holmes

    £Bn suppliers because they keep issuing £Bn contracts.

    "Sorry old chap but we need to a supplier with the necessary "financial stability" to give us security of delivery."

    And other such BS.

    So (surprise, surprise) only a few of companies have the financial stamina to handle years of procurement processes.

    And as for that "In depth experience" that such outfits usually boast about their most useful asset is their phone book of specialist contractors or SME's that can actually do the work.

    Does the UK Govt have the skills to partition systems into more manageable pieces. Who knows.

  12. Jason 24

    Don't the NHS have...

    A nice shiny new system which allows them to order IT equipment with ease, cost us a few billion, can't everyone else borrow this?

    Oh wait....

  13. Anonymous Coward
    Anonymous Coward

    Same throughout the public sector

    The whole of the public sector is like this.

    I run an SME consultancy and we were interested in tendering for a recent university contract as it was right in our specialist area. Unfourtunately the PreQualification Questionnaire was enormous asking you to essentially design and cost the whole thing, from a bunch of generic contradictory buzz word requirements. While also wanting you to send all your financials; CVs of every possible team member; details of every project you've ever worked on for the last X years etc. etc. etc. just so you can have a chance of being shortlisted for the next stage!

    We even had the nerve to ask for some clarification on the generic requirements only to be given short shrift with a "All the information required to tender is in the PQQ". Needless to say we declined to spend a week filling in a tender on the off chance and moved on to do some real business with real customers you can actually discuss a requirement with.

    They deserve getting the usual suspects!

    AC coz they could track me down!

    1. Anonymous Coward
      Anonymous Coward

      Re: Same throughout the public sector

      So true. I'm on the other side, in local gov. Sat on tender projects, IT bod called in to help spec requirements and score the IT part (there is usually an IT part in any outsourced service - even park management!) and sat on some embarrassing competitive dialogue panels as the IT 'expert' who cannot answer or clarify anything because the service heads (who do not understand and make it clear they are not interested in IT) contradict me at every step. ICT tells them - you need to understand and document your business processes to be able to create a proper IT spec for this new unusual service. Why, they ask? It becomes clear in the middle of CD when the bidders are asking basic questions about when exactly a particular bit of IT needs to kick in, what is our preferred solution? Blank faces all round - the service heads say 'this is IT, you figure it out' and IT say 'well it could happen one of these four ways, depending on what you want out of that in your business process'. Thus the specification is made up of really basic buzz words. Bidders write something that vaguely covers it, price it highly because the risk is obvious, and everyone blames the ICT department when mobilisation costs are sky high and it is impossible to complete the work on time. Some bidders love that - Crapita and the ilk - because their legal teams are so shit hot they can get away with charging astronomical prices for contract changes. They WANT it to fail, that's how they make money. Smaller bidders, or those that are actually conscientious and care about the service they provide - will just end up losing money and the relationship will break down from there meaning all this 'innovation' you asked for right from the PQQ stage never happens, and you're stuck with them for 10 years. It's a rigged game.

      1. Anonymous Coward
        Anonymous Coward

        Re: Same throughout the public sector

        Good to hear the view from the other side. It is crazy, especially when many local government/university/quango requirements are actually pretty small scale compared to many requirements in the private sector so could easily be done by SMEs.

        The real problem is the processes are designed to be "fair" and fairness is interpreted as don't engage anybody in any discussions. This tender was an EU tender which unfortunately ramps up the "fairness" level to the point that most SMEs don't bother due to the effort involved. Ironic thing was it could've been done with open source software which would've dropped the software costs back below the EU tender requirement level.

        Ho Hum it's only taxpayer's money after all.

  14. Anonymous Coward
    Anonymous Coward

    Customer exerting choice != market failure

    So a competition watchdog is taking on an investigation where the market is defined by the customer and the market characteristics are defined by the customer preferences....

    So the only outcome logically possible is that within Government IT supplier base Government has a monopsony.

    Pretty much the fact that all these SMEs are surviving in the private sector to highlight lack of access in the public sector suggests where the issues might lie.

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