4.16 Senior managers in government and ICT suppliers said that procurement reform is critical if the full benefits of the Strategy are to be achieved. In particular, government ICT procurement needs to move from running competitions to outsource large ICT services to one that supports a more mixed market of suppliers.
4.17 Government Procurement is developing a new quicker and less bureaucratic process for sourcing suppliers, likely to be available in January 2012. However, ICT professionals and suppliers of ICT and legal services told us the success of the Strategy will depend on new commercial models, simpler contract terms and conditions, culture change and different approaches to risk. For example:
• Current procurement approaches are not suitable for procuring 'agile' delivery projects.
• Procurement officials will need to understand the technology, such as open source, or services they are purchasing to mitigate the risk that they focus purely on cost.
• Risk requirements will change with the move to government integrating ICT systems and services together, rather than relying on a single supplier. The BBC's digital media initiative is a good example of this in practice, where it manages 47 separate suppliers.21
4.18 Government wants to open up the ICT market to small- and medium-sized enterprises (SMEs). The Committee of Public Accounts recommended that the Cabinet Office should set out how it would involve SMEs more, and how it would measure success.
4.19 SMEs suggested to us that early knowledge of upcoming government tenders and opportunities to form partnerships with potential bidders would increase their chances of bidding for government business. In February 2011, the Contracts Finder database was launched, and the online pages about government tenders and contracts received over one million hits in the first three months.
4.20 Although it is early, the Cabinet Office is making progress in involving SMEs across all areas of government procurement, not just in the ICT sector. It has established a baseline of current procurement spending with SMEs (6.5 per cent of total government spend)22 against which it can measure progress. Its overall aspiration is for the amount of work awarded to SMEs to increase to 25 per cent. Government has started talking directly to SMEs and in August the Crown Representative (paragraph 3.6) held an event for SMEs to present their services to senior government commercial and procurement staff in the Department for Education.
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21 Report by the Comptroller and Auditor General presented to the BBC Trust's Finance and Compliance Committee, The BBC's management of its Digital Media Initiative, 13 January 2011.
22 Direct spend based on 2009-10 data. Cabinet Office, Making Government business more accessible to SMEs, July 2011.