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OFT calls on public sector IT buyers

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Posted on 5/07/2013 by Wayne Brophy FCILT

The Office of Fair Trading (OFT) has launched a call for information on the supply of computer services and equipment to the public sector.

Suppliers and procurement professionals alike are being asked to share their experiences as part of an investigation of competition within the sector.

OFT says that although numerous reviews of government IT procurement have been produced over the past few years, its own study will be among relatively few which have looked into possible restrictions on competition coming from the supply side.

In particular, OFT is keen to hear views on the structure of the IT procurement market. This will include whether there are enough suppliers and the market share that each can claim, as well as any barriers to entry which could potentially make it harder for small businesses to get involved in bidding for public sector contracts.

Transferability is also high on OFT’s agenda, since it is requesting insights into whether public sector service users are in any way prevented from switching suppliers. Licensing constraints and transfer costs are among the suggestions, but OFT is also asking to hear if some suppliers deliberately limit the compatibility of their systems with others in order to secure repeat business.

In addition, procurement professionals and suppliers are being asked whether the decision to outsource IT services leaves public sector departments too reliant on the skills and knowledge of suppliers. Finally, they are encouraged to share their thoughts on whether this dependence leaves public sector bodies at such a disadvantage in their supplier relations that they are unable to push for the best value for money in the long term.

IT services are vital in every aspect of public life, especially in service delivery. Health records, for example, are now stored electronically, while schools use more and more technology in the classroom. For the economy as a whole, the top 20 software and IT providers draw more than £10 billion in revenue from government contracts.

“This work demonstrates a continued focus by the OFT on markets related to public services,” says Clive Maxwell, OFT chief executive.

“Given the vital role that this technology plays in the delivery of public services and the cost to the taxpayer, the OFT believes it is important to explore whether there are any restrictions on competition.”

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