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By | Kat Hall 9th July 2015 08:01

Stay Misty for Me: G-Cloud’s transparency called into question

Process ‘not suitable for procuring major bespoke IT systems’

Comment The cash flowing through the G-Cloud is rising exponentially, increasing by £400m last year alone to total a very nice £600m. But while the cloudy framework's flexibility and choice is proving increasingly popular with buyers and sellers, it's worth examining what that money is – and isn't – being spent on.

In fact, only a fraction of that spend counts toward cloud commodity IT, the reason it was created.

There also appears to be a small but growing number of deals being pushed through that seemingly constitute a breach of the rules, leading to serious questions around contract transparency.

The vast bulk of sales to date remains under Lot 4, with "Specialist Cloud Services" now totalling £506m. That figure suggests the government has fallen far short of its now-forgotten target to procure 50 per cent of new IT spend via the G-Cloud this year.

A quick glance through some of the largest deals, such as bespoke software development and agile coaching, suggests real "cloud transformation" is a long way off in government.

Putting it facetiously: there ought be a lot more commodity cloud IT to support such a booming industry of commodity cloud IT consultants.

It's worth noting, though, that the popularity of the G-Cloud framework for not-strictly cloud specialist services is also a reflection of just how plain awful other government frameworks are.

One hilarious example was the revelation that despite its prime spot on a widely hated framework, Capita preferred to tout its IT services through the G-Cloud.

In an unsolicited email sent to buyers, the controversial outsourcer admitted its £2.5bn mega Contingent Labour ONE framework is not "always best for niche skills". No mention of cloud IT skills under Capita's G-Cloud listing for recruitment services.

The "wrong" procurement process

While it's true that the types of cloud consultancy services available remains a grey area, with some more legitimate than others, of much greater concern are the big IT deals that patently do not belong on the G-Cloud.

Kevin Calder, partner in the technology and commerce team of law firm Mill & Reeve said he is aware of some "significant breaches" of the framework for complex deals – a trend that he notes has increased. "The G-Cloud is not suitable for procuring major bespoke IT systems," he claimed.

"However, I am told that the government has been recommending G-Cloud for a wide range of procurements including projects to implement complex bespoke solutions, which should not be procured under the G-Cloud," he said.

"When you're talking about major national roll-outs, two years isn't going to be long enough as a contract term, and the G-Cloud is the wrong procurement process to use," he added.

One recent questionable G-Cloud deal was the procurement of a £4m case management system for the Royal Courts of Justice, a project that itself has a long and troubled history. This deal was awarded at the beginning of last year and the roll-out will be complete at the end of this year.

In this instance, there is quite obviously an expectation that it will be renewed after the two year period, not least because it will only be fully working by then.

When asked by El Reg, earlier this year, Her Majesty's Courts and Tribunal Service said the Cabinet Office "advised us to go through G-Cloud, having already considered existing contracts" under its guidelines.

A spokesman said there had been more than 20 responses to the initial request for information, with "standard guidelines followed in evaluating the suppliers", resulting in Thomson Reuters being awarded the contract.

Another example was the Ministry of Defence's co-location data centre deal with Ark in December last year. This was originally described as a "major consolidation and centralisation project" which will "generate significant savings to the public purse in energy costs over the next 10 years." It later backtracked to say the deal was just for two.

One supplier, who asked to remain anonymous, got in touch to complain that a number of co-location suppliers had their services removed from the G-Cloud on the grounds that such services have now been banned. "It feels there are definitely grounds for appeal as suppliers have been disadvantaged in this procurement exercise," he said.

"Conspiracy of non-compliance"

Calder said the instances of complex deals done via the G-Cloud raise serious concerns around transparency and whether it's fair to those suppliers who miss an opportunity to bid for projects that should be put out to competitive tender. He cites a "conspiracy of non-compliance".

Essentially, if a complex deal is pushed through the G-Cloud it could be less transparent than putting out a tender through the Official Journal of the European Union. At least under this route there is a more clearly defined invitation-to-tender process and a clear limit on how long the deal is supposed to last.

Mark Craddock, one of the original G-Cloud team, agreed that the use of the framework for complex IT deals is a clear breach of its original intention.

"The G-Cloud is about providing greater transparency through open pricing. What's needed is better education of suppliers and government department as to what's allowed," he said.

There's no doubt that the current government framework process is broken and works against the interests of SMEs; the controversy around the Digital Services framework is a case in point.

And in many ways the G-Cloud is the most transparent framework in government, in the sense that monthly spend data are published and prices are provided up front.

But as it continues to grow in size, it is worth asking how honest buyers - and suppliers - are being about what it's actually used for. Not to mention how much of a problem the instances of perceived market abuse are becoming. ®

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