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By | Paul Kunert 8th May 2014 16:44

HM Treasury: Look at our SME-friendly contracts ... that we just gave to a multinational

Japanese enormo-corp to swallow 98% of latest tender

Her Majesty's Treasury appears to be using smoke and mirror tactics to promote the government's wider SME agenda, after splitting up a major contract into multiple towers but handing the beefiest deal to a huge corporate.

The coalition has made great strides to break the oligopoly of tech suppliers that hoovered up business during the last regime, with half of the top twenty suppliers last year failing to grow public sector sales.

But all is not what it seems in the Treasury's Core IT Services agreement, for which a tender was issued in the Official Journal of the European Union in December. 100 suppliers placed bids for the contract.

Core IT Services replaces the existing single supplier framework signed in 2009 with Fujitsu that is being carved into discrete “towers”, as is de rigeur in procurement circles (as with the Ministry of Justice and the BBC, for example) with a new deal kicking off from January 2015.

This agreement is to "align with government strategy, increase the ability of SMEs to respond to the Invitation to Tender and increase value for money", the original OJEU advertisement stated.

Fine sentiments, but Lot One, which was split into service integration services, core applications services and core application platform services, was estimated in the tender to be worth £250m (or 98 per cent) of the overall framework's value in the OJEU.

The Treasury today confirmed NTT DATA UK, the local subsidiary of giant Japanese telco NTT that employs 660,000 people worldwide, had beaten down other suppliers to win the lot.

The NTT deal is a three year contract, but after that period each of the services' components can be separated. According to the original tender the contact can be extended to 84 months.

"This is the first major services contract for central government in the UK," said Anna Price, NTT DATA UK head of public sector and financial services in a canned statement.

A second contract covering printing services, that the original OJEU estimated to be worth £2.5m over four years - with the option to extend - was handed to Centerprise International. This covers the refresh of the entire "printing solution", ongoing support, maintenance and consumables.

Jeremy Nash, business manager at the Basingstoke-based firm, said in a prepared statement his firm's inclusion was "further evidence that SMEs are able to compete successfully for business within the public sector."

At the same time, Centerprise has also part-won Lot 3, the Media and Wireless Services tower, along with Level 3 Communications, which won the WAN component. Both these lots were valued at £2.5m over three years with an option to extend to a total of 84 months, or seven years.

But a spokeswoman at the Treasury told us the four towers - Core IT services, printing, wireless and media services, and WAN/PSN services are now estimated to be worth "less than £50m".

Despite the government's transparency drive, and repeated calls to the PR hand, the Treasury did not break down whether the lion's share of the spend remains in Lot One, in line with the OJEU, or not.

The department said say it still has a requirement for line of business applications with a "different set of users or specialist requirements where replacement services are needed. These include a building services intranet, room booking and management system and econometric and modelling applications."

These tenders will be run through G-Cloud or other appropriate frameworks to "complete the new HM Treasury supply and contracting arrangement".

We asked Centerprise and NTT Data UK for additional comment but have yet to hear back. ®

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