Headlines: December 3rd, 2010

The Government and major suppliers have agreed a new deal which will speed up procurement processes, reduce costs and bring in a larger number of medium and small enterprises.

Reforms are being put in place to make it easier to do business with the state as part of a deal to change procurement practices. The arrangements build on the contract renegotiations programme which started earlier in the year with the Government’s largest 19 suppliers. The new arrangements are expected to deliver £800m in savings in this financial year.

The market will be opened up to smaller suppliers and mutuals and the current suppliers will be expected to partner with them as equals, not as sub-ordinates. The days of the mega IT contracts are over and suppliers will need to rethink the way they approach projects, making them smaller, off the shelf and open source where possible.

Suppliers are being asked to identify what aspects of the procurement process the Government should target to make the purchase of services much quicker, cheaper and better. They will also be asked to identify what central government needs to do to ensure that it is an effective ‘single customer’ for services and to discuss how suppliers can be involved in supporting the Government initiatives in respect of SMEs, Mutuals and Joint Ventures.

A new website has been launched to enable SMEs to share their public procurement stories. The facility asks suppliers, in plain and simple terms, how to rip up the red tape and bring more common sense into securing government contracts.

The new arrangements will be developed in collaboration with suppliers. The results of the ‘Lean’ Study, commissioned to identify wasteful practices and unnecessary complexity in the procurement process will be applied to procurement projects from the start of 2011.

Bindi Bhullar, director of HCL said:“This is the clearest indication yet that the era of bloated IT contracts is coming to an end, and not before time. These unpredictable economic times will naturally lead to a new dawn of shorter term contracts where risk is shifted from the customer to the IT supplier. For example, an IT service provider may offer to pay the customer projected savings up front in cash before starting work. There is nothing like putting your money where your mouth is.”