Government suppliers left in the dark on contract renewals

By Chris Middleton
01 Jul 2014 View Comments

IT suppliers with existing government contracts are complaining to the Cabinet Office that they are not being given the chance to bid for their renewal.

According to a Cabinet Office status report on its Mystery Shopper service, incumbent suppliers are not being made aware that contracts may be changing in size or structure, or are not being told when, how, or where they will be advertised. 

The Mystery Shopper Service was launched in 2011 to help suppliers that encounter poor procurement practice in the public sector to seek advice and arbitration. 

The latest Cabinet Office report covers the period from September 2012 to February 2014 and reveals that by the end of April 2014, Mystery Shopper was dealing with some 640 cases.

It seems that the Cabinet Office is indirectly responsible for many supplier complaints, as companies are being left in the dark about the status of existing contracts and the government's future plans for them.

The Cabinet Office has made no secret of the fact that it does not want to see current multi-year contracts being automatically renewed as they wind down over the next 18 months, and so incumbent suppliers ought to be aware of that broad political strategy.

The government aims to have 25 per cent of central procurement spending going to small and medium-sized enterprises (SMEs) by 2015, while also pursuing initiatives such as the G-Cloud framework in an attempt to break what it calls 'the oligopoly' of large suppliers. 

Ironically, a study from the Institute for Government last week confirmed that out of the top 20 suppliers to government across all sectors, nine – including the top four, and seven of the top 10 – are enterprise IT and/or services firms.

Despite these findings, many incumbent suppliers now feel they are being denied basic information.

The Mystery Shopper report argues: “Often no rules have been broken, but the problem is simply a lack of communication. The concern is that this is not only poor procurement practice, but can also lead to time-consuming complaints for authorities and potential legal challenges. 

“Our advice therefore is to talk to incumbents. This does not mean giving them an unfair advantage, but just making sure that, as the end of their contract approaches, suppliers know what is happening.”

But while it seems that larger firms are using Mystery Shopper to air their concerns, Cabinet Office Minister Francis Maude sees the scheme as being most useful to SMEs. 

"Mystery Shopper allows small businesses to raise concerns directly about procurement practices,” he said recently.

“Small businesses are our economy’s life-blood. As part of our long-term plan we are ensuring they have the chance to compete for and win government contracts.

"Before the 2010 general election no one even bothered to monitor what contracts they were getting."

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