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Public sector procurement: Buyers and suppliers could do better says OFT

Antony Savvas | March 27, 2014
The Office of Fair Trading has "found scope for improvement" in the purchase and supply of public sector IT services.

In addition, ICT suppliers should do more to "improve understanding and the flow of clear information to public sector buyers". This would facilitate benchmarking, drive better value for money, and improve the assessment of competition across different sectors, the OFT added.

Rachel Merelie, OFT project lead, 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."

Georgina O'Toole, an analyst at TechMarketView, said of the report: "There is as much emphasis on the buying behaviours of government organisations as there is on supplier behaviour.

"And it supports the Cabinet Office Efficiency & Reform Group continuing in its existing direction of travel to improve the way government organisations approach ICT procurement."

She said: "There were many ICT suppliers nervous about the outcome of this study — unsurprising considering some previous reports, such as the 2011 Public Administration Systems Committee (PASC) report, which was entitled "Government and IT — A Recipe for Rip-Offs", and which referred to an 'oligopoly of large suppliers'."

"But the OFT report steers clear of such emotional language and instead focuses on a few areas where supplier behaviour could be improved to allow for healthier competition in the market."

If suppliers were required to share more technology and market data with the public sector, said O'Toole, they would have to be confident it was not going to be shared with their market competitors.


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