Government to encourage more competition for IT contracts

Gurjit Degun
posted by Gurjit Degun
28 January 2014

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28 January 2014 | Gurjit Degun

The UK government has issued new rules for its IT contracts to encourage more competition in the sector and free it from “longstanding inflexible contracts”.

The government said it will help encourage “the widest possible range of suppliers” to compete for public sector technology contracts.

The “red lines” published today state:

• No IT contract will be allowed over £100 million in value

• 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; and

• New hosting contracts will not last for more than two years.

Cabinet Office minister Francis Maude said: “These red lines will ensure the government gets the best technology at the best price and we will be unashamedly militant about enforcing them to provide value for hard-working taxpayers.”

Liam Maxwell, the government's chief technology officer, said: “To create the efficient and responsive services that the public demands, government must have access to the most innovative, most cost-effective digital solutions. That means going to the widest range of suppliers, and giving ourselves every opportunity to renegotiate and reassess contacts.

“It rarely makes sense to simply extend a contract based on yesterday’s technology and prices and these red lines make clear that we are doing business in a different way.”

The Office of Fair Trading is currently reviewing the market for public sector IT, engaging directly with relevant parties including technology suppliers, central and local government and other public sector organisations, trade bodies, academics and business organisations.

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