HM Treasury kick-starts the end of the government outsourcing mega-deal

HM Treasury has become one of the first departments to formally signal its intent to break up its single-supplier outsourcing mega-deal

HM Treasury has become one of the first Whitehall departments to formally signal its intent to break up its existing single-supplier outsourcing mega-deal.

The department is inviting suppliers to provide feedback on its proposed new approach for sourcing IT – a model that is likely to be repeated for many of the major outsourcing deals that are due to expire in the next two years.

The new model is designed to make it easier for smaller IT suppliers to win government business, thereby reducing the hold of the “oligopoly” of large system integrators that dominate Whitehall IT.

The Treasury is one of the smaller departments in IT terms, with just 1,235 users, but the principles of its proposed ICT 2015 programme reflect much of the thinking of the new digital strategy laid out by the Government Digital Service (GDS) and government chief technology officer (CTO) Liam Maxwell.

“To ensure alignment with the current direction of government ICT, to encourage SME participation and to deliver efficiencies in its supply chain, the department intends to break up this single provider arrangement into a number of discrete contracts,” said the prior information notice published by the Treasury.

The new sourcing model will be based on a number of discrete “service towers”, operating under an over-arching managed IT services function. The towers, suggested by the Treasury, include core IT services such as business applications; hosting and delivery; wide area networks (WAN); and printing services.

The Treasury is seeking feedback from the market on its proposed approach.

“As this is a new operating model for government ICT, HM Treasury is proactively seeking feedback from the market on our proposed model. We intend to test with the market both our proposed operating model and the individual requirements and contracts. The objective of this exercise is to seek feedback on our proposals and to test the ability of the market to respond,” said the programme prospectus issued by the department.

The Treasury’s existing IT services are provided by Fujitsu, under a £50m deal signed in 2009. The Department for Environment and Climate Change (DECC) is another Whitehall department that told Computer Weekly it plans to end its existing Fujitsu contract in 2014.

The government wants to put 50% of all new IT spending through SME suppliers and double the wider Whitehall target of 25% of all procurement to go to small businesses.

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