Cabinet Office issues guidance on IT contract under £100m

The Cabinet Office has released guidance to open up the public sector market to more SME IT suppliers.

The Cabinet Office has released guidance to government departments on spending under £100m on ICT contracts in a move hoped to open up the public sector market to more SMEs.

The use of open source and open standards should be used whenever possible and where it represents a value for money solution, allowing department to re-use code, designs, templates and ensuring that work is not duplicated, said the procurement policy note (PPN).

However, in the PPN the Cabinet Office said a case may be made for exemption from this policy on the grounds of national security or continuity of a critical Government service. One such example is the Department for Work and Pensions having recently signed a series of contracts worth more than £100m for its Universal Credit programme.

The policy aims to reduce the risk of single supplier failure within a large project; increase competition and innovation by enabling more suppliers to bid and take part in projects; and ensuring reuse, for example sharing infrastructure and services between departments.

Risks identified with the policy included issues around system integration, and a reduction in economies of scale within individual contracts – although this will be offset by more innovation and competition, it said.  

Cabinet Office minister Francis Maude said: “We will end the practice of attempting to cover every requirement in great detail and cover every legal eventuality in every project and contract, thereby increasing the procurement cost and timescales to all parties to unacceptable levels. We will do this by focussing on the 80/20 rule, simplifying to the core components of the requirements at every level and at every stage of a project.”

This guidance takes effect from 1 April 2012 and applies to all central government departments, their agencies and non departmental public bodies.

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