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Whitehall buyers are selecting suppliers before going out to tender, says ex-CIO

Government IT buyers are treating official procurement processes as a formality and agreeing to let contracts to certain suppliers before putting them out to tender, a former Whitehall CIO has claimed.

In a speech in Manchester on Tuesday, Rachel Murphy – a former chief information officer of the Department for Education and digital delivery director at NHS Digital – warned that a tendency to re-let contracts to incumbent suppliers meant that frameworks such as DOS and G-Cloud were failing to achieve their aims.

“I’m not entirely convinced that a lot of the deals that go out on these frameworks haven’t already been let, whether it’s a paper process or whether it’s a relationship or whether it’s the incumbent,” she told delegates at the Digitech19 conference.

Murphy joined the technology consultancy firm Difrent as chief executive in November 2017. In the 25 months since she took on the role, the company has won just one piece of work that isn’t related to her existing contacts, she revealed.

“When I talk to competitors of ours, we find that they feel exactly the same way,” she added. “The framework’s are not a certainty that you’re going to secure business.”

Recent analysis of the G-Cloud framework appears to support Murphy’s claims. Tussell, a public sector procurement data specialist, revealed earlier this month that while more awards issued through G-Cloud 10 were secured by small and medium-sized enterprises than across government generally, only 14 per cent of the 3,505 suppliers listed on the framework won business in 2018.

The Crown Commercial Service said that a further 13.5 per cent of listed suppliers won work through G-Cloud 10 in 2019, but that takes the total number to just 27.5 per cent, suggesting that buyers are returning to a relatively small pool of suppliers.

The Public Contracts Regulation 2015 forbids buyers from writing contracts in a way that favours a particular supplier. It states: “Competition shall be considered to be artificially narrowed where the design of the procurement is made with the intention of unduly favouring or disadvantaging certain economic operators.”

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One supplier who spoke to NS Tech on the condition of anonymity revealed they were so concerned about the lack of genuine competition within formal bidding processes that they had decided not to apply to be listed on frameworks.

The contracts, the supplier added, were often won by major outsourcing firms with well-established bid writing units but under-resourced delivery teams, forcing them to subcontract the work out to smaller players.

The government has pledged to spend one in every three pounds with SMEs by 2022. The percentage of total award value won by SMEs through G-Cloud was 40 per cent in 2018/19, according to the Crown Commercial Service’s data. But an analysis by Tussell on NS Tech’s behalf last year showed that across government tech as a whole, only 16 per cent of deals had gone to SMEs between June 2017 and 2018.