A market study by the Office of Fair Trading (OFT) has claimed that competition could be better when it comes to purchasing and supplying ICT products to the public sector.
The research looked at competition between companies in the areas of commercial off-the-shelf software and outsourced IT as these account for around half of expenditure by UK public services.
According to OFT, there are a number of barriers that prevent firms from entering this particular market or expanding their share within it and these also deter buyers from switching between suppliers.
These obstacles are: overly complex procurement practices that make tender responses expensive and time consuming, costly processes for gaining security clearances and an “inherent advantage” held by incumbent suppliers that makes switching costs expensive.
“ICT is central to the efficient and cost-effective delivery of many public services,” claimed Rachel Merelie, OFT project lead.
“The market supplying ICT products and services to the public sector is worth around £14bn and is not working as well as it should.
“The public sector needs better information and expertise so it is able to judge whether ICT suppliers are delivering good value for money. Companies that supply ICT goods and services should also be more transparent and provide better information to public sector customers,” she continued.
OFT recommends that its concerns are addressed by public organisations improving their procurement process and the way they manage contracts, while providers must be more transparent with their customers.
It recognises that changes have already been made, but there is scope for further improvement.