Office of Fair Trading to investigate the supply of IT hardware and services to public sector

OFT calls for submissions from buyers and suppliers - 13 August 2013 deadline

The Office of Fair Trading (OFT) is to investigate the supply of IT services and hardware to the public sector and has called for suppliers and purchasers to contact the Office to share their experiences.

The top 20 software and IT services providers earn about £10.4bn a year in revenue just from the public sector, but the coalition government has targeted the supply of IT as a key source of savings.

"The OFT is keen to ensure that competition in this sector works well. Healthy competition in any market drives down costs, drives up efficiency and promotes innovation, while a lack of competition can hinder productivity and, in turn, economic growth," said the OFT in a statement.

In particular, the OFT is seeking information about:

• The structure of the sector, for example the number of suppliers and their market share.
• Whether there are barriers to entry that make it difficult for smaller businesses to compete in this sector.
• Whether public-sector users face high barriers to switching suppliers, such as costs of transferring and restrictive licence agreements.
• Whether some suppliers seek to limit the interoperability and use of competitor systems with their own.
• Whether outsourcing of ICT service provision results in a high level of dependence on suppliers' expertise, undermining the ability of public bodies to drive value for money over time.

While procurement of IT services and hardware has been reviewed many times in the past, few of the reviews have addressed the supply side of the market, and whether there are factors inhibiting competition.

"Given the vital role that this technology plays in the delivery of public services and the cost to the taxpayer, the OFT believes it is important to explore whether there are any restrictions on competition," said Clive Maxwell, chief executive of the OFT.

He added: "We want to hear both from industry suppliers and public sector users about how competition in this market works, any problems that they have experienced, and how it could be made to work better."

More information about the specific issues being considered by the OFT can be found at on the call for information page. Anyone who wishes to contact the OFT can email [email protected] or write to the address below by 18 August 2013.

ICT Call for Information,
8th Floor,
Office of Fair Trading,
Fleetbank House,
2-6 Salisbury Square,
London,
EC4Y 8JX