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Gov. diverts £2bn gravy train

But industry still "paranoid" about OGC secrecy

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The Office of Government Commerce (OGC), has caved in to industry protests over its attempt to railroad controversial policies for the second time in a year.

The Treasury buying arm is in danger of earning a reputation as a soft touch after broadening the supplier roster for framework contracts worth up to £1bn this week - and soft is not meant to be a reference to the commission* it earns on the business it passes between private companies and other government departments.

This time last year, industry was anxious after being told the rehashed framework agreements - a gravy train for those companies who get them - would be awarded to far fewer companies this time round. It was expected that the constriction would cut many small suppliers out of government business. Such agreements over saw £2bn of trade with government last financial year.

"We've not had any form of ministerial statement, but what we are getting is a far greater number of [suppliers] going onto the framework than we feared," said an industry insider who had been among the lead campaigners against proposals many thought would restrict competition between all but the fattest government suppliers.

"It looks like there might be the same number that were on there before, which was several hundred...and that'll be good for SMEs," he added.

Letters went out this week telling the directors of 29 IT suppliers they were made men: they were on the rejigged "Catalist" framework list that allows public sector managers to buy goods and services without having to French-skip through red tape in accordance with European procurement regulations (subject to a cooling off period that ends February 26).

That's three more suppliers than last year, split into various specialist categories. The top table, which hosts those lucky suppliers authorised to make quick sales of virtually any sort in the IT goods and services super-category, was also a little more crowded.

Fujitsu and Insight UK were surprise new additions to the top list, while Computacenter, PC World Business and SCC retained their positions.

With so much business at stake, the framework agreements are highly prized. Yet while tenders for the business are listed in official publications, the secrecy that has surrounded their revision, and the subsequently protracted negotiations over their faults, has been disreputable.

The level of mistrust is evident in the refusal of other industry sources close to the negotiations to count their chickens until the other £1bn of revised framework agreements have been awarded; though it may just as well indicate the mutual benefit industry and government get out of doing deals behind doors.

Government has used threats to keep suppliers schtum about its bruising procurement rules in the past, but suppliers have learned to appreciate government's habitual use of "commercial in confidence" to hide the arrangements for the spending of billions of pounds of public money.

Nevertheless, says one significant Catalist supplier: "I'd like to see as open and transparent a process as possible. Like most things in life, if you don't know what's happening it creates a lot of paranoia."

The situation must be even worse for those smaller companies on whose behalf the likes of industry association Intellect have been negotiating in secret with the OGC for the last few years. Few know the nature of the bargains Intellect is striking.

Intellect is privileged to have influence over matters that affect many more companies than are represented in its membership of 1,000 - not forgetting the fate of billions of public money. Those secret talks amount to an advantage over the rest of the industry because it knows what's coming, for good or for worse.

In addition to this moral obligation on Intellect for transparency, shouldn't the 1 per cent commission taken by OGC Buying solutions*, the business end of the OGC, on the trade done through its frameworks, also oblige more openness about its work? Not either, says the OGC.

Yet a lack of transparency encourages mistakes with public money, cover-ups, sly dealings of whatever kind, as was highlighted in the ID cards debate by MPs concerned with the lack of scrutiny over expensive IT projects granted by government.

It also encourages bad planning, which might be as indicative of this latest turnaround as it was the OGC's U-turn in the summer over its punitive new model contracts. The new terms were supposed to lessen the chance of embarrassing failure in large IT projects. Their introduction was railroaded by the OGC in 2004. Their withdrawal came after a year of haranguing, not just by suppliers, but lawyers, insurers and academics. The Catalist frameworks have been delayed similarly.®

* Whose full accounts can be seen here.

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