Step Change Required in Government IT Procurement

Government IT Procurement

Conflicting views continue to be expressed on the thorny issue of government IT procurement.

According to Niall Quinn, Technology Procurement Director at the Crown Commercial Service (CCS), the UK government’s Digital Marketplace, created to make government procurement easier, more transparent and accessible to SMEs, has resulted in a “major overhaul of the public sector procurement landscape, harnessing the expertise of innovative companies and giving thousands of SMEs the opportunity to supply to government for the first time.”

It is claimed that 48 per cent of the £3.2bn spent on government digital services now goes to SMEs – see Government Spend on Digital Services Passes £3bn Mark.

Technology SMEs, however, continue to complain about the lack of clarity in Digital Marketplace opportunities claiming that many tenders fail to adequately explain requirements. Written in unclear language, tenders are sometimes incomprehensible except to the incumbent supplier. This creates an unnecessary barrier for SMEs more than capable of undertaking these projects.

A new report, by industry trade body techUK, argues that a further step change in central government and wider public sector procurement is required to deliver the government’s digital transformation and growth commitments. With only 21 per cent of civil servants believing that there is an appetite within their department or organisation to increase the involvement of SMEs in the procurement chain, urgent action is required.

The report, entitled Procuring the Smarter State: key steps to promote innovation and growth in the public sector, argues that the ambitious scale and complexity of the government’s digital transformation agenda means that every opportunity should be taken to learn from the wealth of knowledge and experience held by the UK’s thriving tech sector, including SMEs.

The tech industry can provide government with the tools and experience necessary for managing large-scale transformation projects. To harness this innovation and expertise, however, a step change is required to create more opportunities for SMEs through public sector ICT procurement.

A new policy environment is required which encourages central government departments, and the wider public sector, to invest in long-term strategic relationships with suppliers of all sizes. Procurement has a critical role to play acting as a tool for the UK Government to deliver its ambitious vision for the future of public services, using public sector procurement to help foster innovation in the supplier community.

Key Recommendations

The report makes three key recommendations:

  • Use procurement as a tool to deliver the vision of government transformation 

The Digital Marketplace should be expanded by increasing the value of spend going through frameworks and the number of non-Whitehall public sector agenices using the system, especially local authorities. At local level, City CDOs and metro mayors should champion smarter procurement processes for their city or region to deliver more efficient and integrated ICT services. These leaders should work closely with public sector finance and procurement leaders to collaborate with the tech industry, adopting meaningful pre-procurement engagement to understand the breadth of opportunities available.

  • Take advantage of the opportunities offered by the UK GovTech market

One minister in every department should be given responsibility for driving the consistent implementation of the government’s digital strategy. A key area of focus for these ministers should be the commitment to significantly increase SME involvement in the procurement process. Where common standards are introduced on ICT procurement, CCS should provide civil servants with clear guidance on what is expected, providing training when necessary. A forum should be established to encourage better engagement between the technology sector and government aimed at tackling unintended barriers inhibiting collaboration.

  • Take a strategic and innovative approach to market engagement: 

Central government departments should take a broader, transparent and strategic approach to communicating with the tech sector on planned procurement activity. This should include adopting a more proactive approach to engaging with prospective suppliers, publishing pipelines and emerging opportunities well in advance of procurement decisions. The Cabinet Office should work in partnership with techUK to communicate to central government departments and agencies the benefits of working with SMEs.

Commenting on the claim that a growing proportion of government IT spend is going to SMEs, the report points out that this includes indirect as well as direct spend. Government understanding of the former “remains incomplete”. Being reliant on third-party data, there is no way of verifying the accuracy of the figures. Suppliers may have “different approaches to collecting and validating data and identifying SMEs, leading to inconsistent measurements.”

The full report can be accessed here - Procuring the Smarter State: key steps to promote innovation and growth in the public sector.