The OFT finds a significant imbalance of power between ICT suppliers and public sector buyers which prevents effective competition.
What's the issue?
Around £14 billion was spent by the public sector on information and communication technology (ICT) in 2011/12, accounting for around a quarter of the overall spend on such products and services in the UK. The procurement of ICT represents around 6% of the UK's overall public sector spend on third party suppliers. The Office of Fair Trading (OFT) conducted a market study in order to better understand the nature of the market for the supply of ICT to the public sector and the degree of competition that exists between suppliers, focusing its inquiry on Commercial of-the-shelf Software (COTS) and Business Process Outsourcing (BPO), which constitute around half of this figure.
What's the development?
The OFT has published its final report on its market study into the supply of ICT to the public sector (Report). The Report found that these markets possess a number of features which prevent competition from working as effectively as it should and that purchaser behaviour was, to a considerable extent, responsible for this.
What does this mean for you?
If you supply ICT to the public sector or are a public sector buyer of ICT, this Report is very useful. In particular, it makes a number of recommendations based on its findings, the majority of which focus on what purchasers can do to help derive better value from their ICT spend.