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Public sector has IT companies ‘over a barrel’

Contracts ask too much of suppliers, says trade association

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Intellect, the trade association of the ICT industry, will tell the House of Commons Work and Pensions Committee that government and IT companies must take more partnership-based approach to IT contracts, when it gives evidence before MPs this afternoon.

According to Nick Kalisperas, head of public sector at Intellect, the government has IT companies over a barrel when it came to negotiating terms of contracts. He acknowledges that this provides value for the purchasing parties now, but argues that this is an unconstructive approach in the long run.

“The money is in the public sector at the moment, while the IT companies are having a much harder time of it. The result is that the public sector feels that it is a position to dictate terms and is imposing some pretty onerous clauses on suppliers. In the long run though, when the market picks up, this kind of practise will deter people from going for public sector business,” he said.

In its evidence submission, Intellect also called for the government to stop publicly blaming companies when projects ran into trouble. When public money is being spent, transparency and accountability are paramount, but nothing was gained by finger pointing, according to Kalisperas.

"We feel that a better balance between accountability and commercial confidentiality needs to be struck,” he said.

The select committee began its inquiry "to examine the DWP's management of information technology (IT) projects" last week, following several high profile public relations disasters over large scale IT deployment in government agencies.

a sub-committee will hear evidence from industry bodies, like Intellect, from IT journalists, users, trade union representative and ministers. The inquiry will take two phases. The first will seek to establish what the ideal IT contract should look like. The second will look at the particular agencies’ records in IT procurement.

A spokesman for the Department of Work and Pensions said the inquiry was established to determine best practice, but that it was too early to say what this might look like. The select committee will hear evidence for several more weeks, if not months, before drawing conclusions. ®

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