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By | Kat Hall 20th October 2015 09:32

Hated Capita Contingent Labour One contract will be overhauled

SMEs cheer as outsourcer gets boot – details of 'Temporary Workers' contract to follow

The government's £2.5bn Capita-run Contingent Labour One framework – hated by suppliers and buyers alike – is to be overhauled by a "more equitable" Temporary Workers contract next year.

Under CLOne, Capita is responsible for the provision of "interim managers and specialist contractors" across a range of services including IT. The Cabinet Office has said it has saved £75m by centralising services under the deal.

In response to a Freedom of Information request sent to The Register, the Cabinet Office said two formal complaints have been made concerning the framework since it began in June 2013.

One SME welcomed the overhaul, commenting that the terms of the contract amounted to a “monopoly supply arrangement, with no balance in the terms between suppliers and sub-contractors.”

"It specifically and deliberately penalised the major incumbent suppliers, all of whom have not signed up to CL1," said the supplier, who spoke to The Register on the condition of anonymity. He claimed: "The only people it worked for was Capita."

He said it would be incredibly surprising if Capita was given the contract again. "Capita are perhaps the least trusted organisation by other suppliers in government, and they have lots of form in anti-competitive behaviour."

Amusingly, even Capita doesn't apparently like its own framework for "niche" IT skills, preferring to tout itself on the G-Cloud instead.

The terms of the deal provide Capita with a 20 per cent cut of the value of all the contracts, and have proved unpopular with some SMEs who have complained they are being squeezed under the terms of the contract.

The Temporary Workers commercial arrangement will replace the Contingent Labour ONE framework agreement when it expires in June 2016. The contract notice and tender document has not yet been published. No tender documents have yet been published about the deal.

However, the terms of the contract state the Cabinet Office is considering a more “dynamic” G-Cloud like model. Presumably that would mean regular re-letting of the contract and a less onerous tendering process.

The Crown Commercial Service said it is currently looking at the terms of the Contingent Labour ONE arrangement "and assessing how we can make them more equitable in terms of ease of doing business with government.” It said feedback on the framework is being evaluated and "will be addressed in the Temporary Workers commercial arrangement."

A Capita spokeswoman said: “More than 60 per cent of the work under Contingent Labour 1 is awarded to SMEs. Of the 348 suppliers on the framework, 322 are SMEs. The framework has been designed, and is run, in the manner required by government.” ®

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