Government pledges to halt procurement 'madness'

The government will set up a centralised procurement team in an effort to stop paying wildly different prices for IT products, according to the Cabinet Office.

Cabinet Office minister Francis Maude has said the government is to set up a centralised procurement team. Photo credit: Cabinet Office

The centralised team, called Government Procurement, will contract for goods and services for the whole of government, rather than individual departments.

Government agencies and departments have been paying between £350 and £2,000 for the same laptop, and between £85 and £240 for the same printer cartridge from the same supplier, the Cabinet Office said in a statement on Friday.

"It is bonkers for different parts of government to be paying vastly different prices for exactly the same goods," Cabinet Office minister Francis Maude said in the statement. "We are putting a stop to this madness which has been presided over for too long."

The figures are taken from a report by Sir Philip Green that was published in October. Typically, the higher prices have been paid by government organisations unable to negotiate discounts for large orders, a Cabinet Office spokeswoman suggested.

"Departments for a long time have procured their own IT," she told ZDNet UK. "Smaller agencies and departments have not benefitted because of their size."

Purchasing power

In a 12-month period spanning 2009-2010, the government spent £66bn on goods and services, the Cabinet Office said. By using its bulk purchasing power, it expects to save £3bn a year by 2015.

Under the new procurement measures introduced on Friday, small businesses will get a chance to pitch ideas to public-sector bodies at 'Product Surgeries'.

It is bonkers for different parts of government to be paying vastly different prices for exactly the same goods.

– Francis Maude

The government aspires to do 25 percent of its business with small and medium-sized companies. However, most contracts will be awarded to a small pool of larger suppliers, said the Cabinet Office spokeswoman.

"With printer cartridges, it might well make more sense for the product to be bought centrally," she said. "Where it's more appropriate to look at specialist suppliers, we want to encourage government departments to look at SMEs."

In addition, the Cabinet Office said the government has tendered for a centralised supplier for travel and office supplies, with contracts to be awarded later this year.

The Government Procurement team will be headed by John Collington. In April, the government appointed 'Crown Representatives' — senior civil servants who have the job of overseeing contracts with major suppliers.