OFT Launches Probe Into Government IT Procurement

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Regulator wants to know if IT giants unfairly dominate government IT

The Office of Fair Trading (OFT) has launched an investigation into the state of competition in the procure of IT in government.

The regulator has today called for information from suppliers and purchasers about the supply of government IT services.

OFT investigation

Parliament Government London © anshar Shutterstock 2012The top 20 software and IT suppliers earn £10.4 billion a year in revenue from the public sector, the OFT noted.

A handful of suppliers, including HP, Capgemini and Accenture, are thought to dominate government IT still, despite the government’s best efforts to rein in spending on massive suppliers.

The G-Cloud project, which is designed to encourage small to medium-sized suppliers,  is one of the government’s attempts to change public sector procurement. It has welcomed many SME suppliers on board, but has only seen £25 million of spend in the last year.

Now the OFT wants to know if the barriers for entry into the market are too high for SME suppliers, or if larger companies are limiting interoperability to lock out others.

“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,” said Clive Maxwell, OFT chief executive.

“We want to hear both from industry suppliers and public sector users about how competition in this market works, any problems that they have experienced, and how it could be made to work better.”

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