Government IT procurement slammed

SMEs are finding it as hard as ever to compete for Government IT contracts, and have repeated accusations that the system is a 'closed shop'

Small and medium-sized IT suppliers have accused the government of running a "closed shop" that prevents small and medium-sized enterprises (SMEs) competing with the bigger IT vendors for public sector contracts.

In particular the IT framework agreements of the trading arm of government procurement body the Office of Government Commerce have come under fire for excluding SMB suppliers.

Out of the 13 suppliers listed on the IT hardware framework agreement list on the OGCbuying.solutions Web site just one, Ergo Computing, is classed under EC guidelines as an SMB. The rest are all familiar large vendors such as Computacenter, Dell, HP and IBM.

It's a similar story for the software and services framework agreements but more frustrating for smaller suppliers is the fact they won't get a chance to get on the approved framework agreement list until the next time it is updated in September 2006.

One supplier who contacted ZDNet UK sister site silicon.com said: "We have a customer who has informed us that they would ask us to bid if we were on the list. Can I be added to this list of suppliers? Unfortunately not, as it is a closed shop."

Government CIO Ian Watmore reiterated his intention to make it easier for SMEs to bid for public sector work in a recent interview but admitted it is tricky balancing the need for innovation with the need for balance-sheet strength.

"We also want to work with the SME community who have the innovation and specialist focus that we want to deploy so we need to try to create that marketplace that is a combination of balance-sheet strength with innovation," he said. "SMEs often don't feel they get a look in but government can't put billion-pound programmes out to a company with no balance sheet. It just doesn't work like that."

A spokeswoman for OGC Buying Solutions said the procurement process for some of the framework agreements has already begun and that SMEs are encouraged to take part. She added there are other routes into government contracts for SMEs as well.

"There is nothing to stop other companies and in particular SMEs forming relationships with the prime contractors and supplying their goods and services through them to our customers," she said.

OGCbuying.solutions has also introduced a new e-sourcing tool to make it easier for SMEs to do business with government.

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