The Cabinet Office has squeezed savings of about £70m out of Microsoft and SAP and will put the screws on 22 further key suppliers of services and equipment later this week.
According to national news coverage, Microsoft has agreed to discounts amounting to £65m, while the government has also netted savings of £3m from SAP, rising to £5m by 2015.
On Thursday, Francis Maude, minister for the Cabinet Office, will meet with 22 key suppliers – among them IBM, BT and Capita – who between them hold government contracts worth £15bn.
"The government's message to business is clear: the landscape for government contracts has changed irrevocably," Maude (pictured) said.
"Tough negotiations are here to stay, and to work with government you have to be prepared to offer the best value for money."
According to The Telegraph, these suppliers will also face a new assessment process which will result in a performance rating that can be viewed across government departments.
"Suppliers with poor performance may therefore find it more difficult to secure new work for the government," the Cabinet Office said.
It claims it has already found savings of £800m since it came to power in 2010, by renegotiating government contracts.
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