Indian IT suppliers are being excluded from winningIT work in the public sector under strict government procurement rules, it was claimed last week.
Indian suppliers told a parliamentary group that government procurement rules acted like a "catch-22" clause.
The rules make it difficult for Indian firms to wingovernment work, unless they have already worked on public sector projects in the UK, the firms said.
The claims were made at the first meeting of an All Party Parliamentary Group (APPG) focussed on improving economic relations between the UK and India.Trade Minister Gareth Thomas was at the meeting.
The meeting heard that under existing rules, the Office of Government Commerce (OGC), which controls public sector procurement, requires bidders to disclosetheir previous contractsin the UK.
But Indian IT firms, despite having extensive overseas experience, do not have enough UK government contract experience to win the deals.
Brian Woodford, director of public sector at Tata Consultancy Services, said that, as a result, the UK was losing out on talent and skills.
"There are specific areas of prequalification that are based on track record in the UK public sector," he added. "The reason for this is they want to see what capacity a company has in the UK - so why not ask that?"
"They are not gaining access to the skills and capacity that could serve the market better and are going for the tried and tested that is not necessarily delivering the best service," added Woodford.
He said TCS has been meeting with OGC officials and he believes their case is being listened to. "We want to be able to engage."
Bindi Bhullar, head of marketing and alliances Europe at Indian service provider HCL, said when the company bids for work with a UK bank they accept experience with US banks. "If we bring a US reference to a UK bank they understand it."
"In the UK public sector we are in a Catch 22 situation because you need three references. But we have experience around the world and it is a shame if the UK government does not leverage this."
He said that one of the reasons HCL acquired Axon for £440m in December was because it had a lot of experience in the UK public sector.
Phil Morris, European managing director at outsourcing consultancy Equaterra, said the criteria that the UK government uses to qualify suppliers are "completely irrelevant".
"Government procurement policies tend to go down a route of safety and lack innovation. They do not test real capabilities and go to the same places for services every time."
A total of 14 major UK government projects have ran into difficulties. These include projects at the Intelligence Services, GCHQ, the Passport Service, the National Health Service, the Rural Payments Agency, the Criminal Records Bureau, HM Revenue &Customs, the Department for Work and Pensions, the Department of Health, the Department for Innovation Universities Skills, theMinistry of Defence, and the Prison Service.
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