Every seller’s dream and procurement manager’s nightmare. The relationship between service provider and IT department which has morphed unchecked and become “strategic”.
On 12th August the UK's Department of Community and Local Government (CLG) released detailed spend data for the 12 months to April 2010. A review of Ordnance Survey, the CLG mapping agency’s £38 million 3rd party costs, reveals IT to be the leading spend category.
With spend of £5 million, Computacenter UK provide IT infrastructure services. A manager at OS is quoted on Computacenter’s website as saying that Computacenter's centralized maintenance services provide “a single point of contact, which reduces the administrative burden". Recruiter, Lorien Resourcing, is another supplier which boasts OS as a customer on its website. OS spent £6 million with Lorien in 2009/10 and the companies have worked together since 1998.
Despite the fact that both companies frequently use OS as a reference client and might have been forgiven for bragging about coming top of a strategic review by their customer, dotgovdotuk was unable to find any reference to such an assessment by Ordnance Survey, although, both vendors are signatories to frame contracts with Buying Solutions, the Government's leading procurement services organization for the UK.
Readers would be forgiven for thinking that the amounts involved above are a drop in the ocean. However, bearing in mind that Computacenter's UK revenue is £1 billion and they are one of twelve IT service providers with which Buying Solutions has signed a frame agreement, we believe that the Government's approach to using IT service providers is material and relevant to a broader debate on government procurement strategy.
In a future article dotgovdotuk looks at the role of Buying Solutions and whether use of their frame agreements absolves Government departments from the need to develop their own procurement strategies.
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