Government procurement criticised over 'old boys' network'

An 'old boys' network' of a few companies maintain a stranglehold over government procurement in the £17 billion public sector technology market, the head of one of India's largest IT outsourcing firms has claimed.

In an interview with the Financial Times, HCL Technologies chief executive Vineet Nayar claimed that his company cannot even get on shortlists for Whitehall projects because of long-standing relationships departments have with existing suppliers. He called for a level playing field in procurement, adding that HCL - which works with private sector firms including Vodafone and Rolls-Royce - could offer IT services around 20 per cent cheaper than many of its western competitors. "Your contracts are bad, your competition is limited," Mr Nayar said.

Patrick Dunleavy, chair of the London School of Economics' public policy group, lent support to the HCL chief's claims, saying that the UK's public sector IT industry is "probably the most concentrated in history".

However, the Office of Government Commerce, the independent Treasury office responsible for ensuring best value in state spending, said that public sector bodies must adhere to "strict legislation" on procurement set out by bodies including the European Union and the World Trade Organisation.

Alastair McKie, PA Consulting Group Government Procurement expert says: "Government departments do have to abide by EU regulations for open, fair and transparent procurement processes. In our experience, however, the pre-qualification questionnaire and evaluation can sometimes sub-consciously favour prior experience of delivering to the UK Government by, for example, setting  the relevant security clearances hurdle too high to allow new entrants to be selected. What is needed is for government departments to ensure that their procurement strategies are not institutionally biased and can accommodate the necessary additional security processes to enable new entrants to handle government information. This can be tested during structured market engagement before issuing the documentation."

To speak to an expert about our work in healthcare or to discuss data modelling or business intelligence please contact us now.