MoD chops £120m IT consultancy budget

The scrapping of a framework agreement worth tens of millions is part of a government plan to centralise IT procurement, according to the Cabinet Office
Written by Tom Espiner, Contributor

The Ministry of Defence has scrapped a projected £120m budget for IT consultancy services, following government cost-cutting measures.

A Ministry of Defence (MoD) tendering process called Facits, which began last summer, has been subsumed into a plan to centralise the provision of IT consultancy services across government agencies, the ministry told ZDNet UK on Tuesday.

The £120m budget for Facits was provisional and not settled, the ministry added.

"The Framework Agreement for Consultancy and Information Technology Support (Facits) was designed to provide the opportunity for suppliers to tender for contracts as and when required by the MoD, and did not provide any guarantees regarding the volume and therefore value of the work," said a spokesperson for the ministry.

"After careful consideration, the Ministry of Defence decided not to proceed with Facits, but a cross-government framework planned from October will offer further tendering opportunities for industry."

The centralised procurement process was announced in May as part of a Cabinet Office and Treasury initiative to cut costs. The government departments said at the time that they would carry out procurement of commodity goods centrally and implement an immediate freeze on all new IT spending above £1m.

In an emergency budget in June, Chancellor George Osborne announced public spending reductions of £31.9bn a year by 2014-15 in a government effort to revive the UK economy. The coalition government has identified departmental budgets for IT projects as a target for savings, and the Treasury pledged in June to make £95m in IT cost cuts.

The purchase of IT consultancy services will be included in centralised procurement, the Cabinet Office spokesperson told ZDNet UK on Tuesday.

"The government has announced a freeze on all new consultancy spend unless it is an operational necessity," a spokesperson for the Cabinet Office said. "Where spend is proposed, ministerial sign-off will be required for £20,000 or above."

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