Cabinet Office: government IT contracts capped at £100m

But certain projects are exempt

Government IT contracts are now capped at £100m regardless of how they are funded, the Cabinet Office has said.

The new policy, which began yesterday, was outlined in a procurement notice that said that the government is attempting to reduce "the delivery risk of high-value projects that use ICT to deliver their business objectives".

In addition, the government wants to achieve better value for money from the projects it invests in.

The £100m threshold applies to all central government departments, their agencies and non-departmental public bodies.

However, there are exemptions for projects that are a matter of national security or those that involve the continuity of a critical government service.

"All future ICT projects will be designed from the outset with the presumption that they will have a total lifetime cost of less than £100m, unless a strong case can be made that doing so increases the overall cost to the taxpayer, notably increases the risk of failure or increases the security threat to the public body or government as a whole," the notice reads.

The government said it will look to carry out this new policy by encouraging departments to re-use existing resources, improving and simplifying the way in which it procures goods, encouraging greater competition among suppliers with a focus on including SMEs in the procurement process, and constructing projects and resultant tenders in a more modular and flexible way.