The prospect of tendering for new service contracts can be a notoriously difficult affair.
Time and cost, administrative issues, and the need for compliance are just some of the concerns faced by public sector departments looking to review their existing service contracts. In the case of central government, the infrastructure, finances and manpower are often in place to make this process much more bearable, but what about local government departments, which don't necessarily have the capacities of their bigger counterparts?
As you might expect, the fallout from this is that some government departments will build a resistance to the tendering process. Reluctance to engage in reviewing existing service contracts inevitably creates a vendor lock-in situation whereby public sector services are supplied solely by a select few vendors, and therefore it is crucial that government departments understand the alternative options available. One alternative often overlooked is framework agreements.
Framework agreements are commonly set up to cover external service contracts; in the case of housing associations and local authorities this might include office supplies, IT equipment, payment services, repair and maintenance services.
If the framework agreement is awarded to one provider, then the purchasing authority can simply call off the requirement from the successful supplier as and when it is needed, without the costs and time of going to tender. In addition, their compliance with EU procedures and rules means local government departments looking to procure new services avoid any legal challenges arising from non-compliance that can commonly arise through tender exercises.
The obvious question therefore is why aren't more local government departments looking to embrace framework agreements when it comes to identifying new services? Simply put; a lot of it comes down to a lack of awareness and education.
Arguably, the most pertinent example of this is the G-Cloud framework.
G-Cloud is the brainchild of the UK government aimed at opening up the ICT market to allow SMEs, such as allpay, to compete with large system integrators (SIs) when it comes to supplying ICT services to the public sector. The solutions available are often more flexible, innovative and cost-effective providing greater scope to expand ICT capabilities.
Traditionally, ICT service contracts have been dominated by a select group of high profile SIs. G-Cloud was introduced two years ago in order to restore the balance and ultimately provide public sector departments with an array of pre-approved services and solutions that previously had not been available. As they are part of a framework agreement, the biggest benefit is that a lot of the hard work associated within a tender process has already been taken care of.
In its early days, the framework was not without its flaws; namely, issues surrounding functionality and heavy reporting. Fast forward to today, and a lot of these issues have been addressed. In fact, the latest research has central government spending approximately £175m through the framework and all signs point to this figure growing. While all this sounds positive, issues still lie beneath the surface, particularly when it comes to local government adoption; arguably the one group ideally placed to benefit from G-Cloud.
Recent research has revealed that only 1% of local councils in England procured IT services through G-Cloud’s online CloudStore between 2012 and 2013. Obviously this raises questions as to why local government appears to be resisting G-Cloud. The simple fact is that they don't know about it.
Education has always been a big barrier when it comes to G-Cloud adoption. The financial and time commitments take their toll on the public sector departments that don’t necessarily have the capacity to undertake overly complicated supplier reviews, resulting in a reluctance to change.
Recently, allpay undertook a survey across 100 professionals from housing associations into their experiences with service contracts. The findings strongly suggested that when it comes to reviewing service contracts, housing associations and local authorities opted to procure new services via a tender process, as opposed to going through a framework.
The fallout from this is a reluctance to engage in reviewing existing service contracts, inevitably creating a vendor lock-in situation whereby public sector services are supplied solely by a select few vendors.
The G-Cloud framework is striving to move away from this by providing public sector departments with access to a ready-made pool of pre-approved suppliers, offering an array of flexible and cost-effective solutions that traditionally they will not have had access to. As well as this, the technology will often give a much better quality of service to government departments than those currently available. It is exactly this that needs to be communicated about the opportunities afforded not just by G-Cloud, but framework agreements in general.
The action must therefore be on central government and suppliers to work directly with local councils to drive education. Greater education surrounding the benefits of procuring services via a framework agreement opposed to traditional tender processes means less downtime between identifying services and fulfilling them, which considering how lengthy and costly the tender process can be, is a considerable benefit. The availability of greater choice and flexibility will no doubt afford more opportunities to local government departments in terms of the products it can offer to its customers.
Sourced from Ross Macmillan, Market Intelligence Consultant, allpay