The Office of Fair Trading (OFT) has announced an investigation into the way the public sector awards its IT and related services contracts.
Nisha Arora, senior director of services around infrastructure and public markets at the OFT, said IT contracts are critical to the efficiency and efficacy of public services and public-sector reform.
"When competition works well, it can help drive down costs, encourage innovation and ultimately ensure that the taxpayer gets the best value for money," Arora said. "We want to look further into this market to understand whether it is really serving its customers' interests."
However, concerns about competition have been and continue to be raised despite initiatives like G-Cloud.
Arora said the study will focus on the degree of competition between IT suppliers to the public sector. IT goods and services accounted for an estimated £13.8bn of public sector spend in 2011-12. About half of that is split between outsourced IT and off-the-shelf software supply.
This latest investigation follows an OFT Call for Information (CFI) in July that raised further concerns about public sector procurement.
"Certain businesses appear to have a large share of contracts in some areas of the sector, there are high barriers to entry and expansion (especially for smaller scale IT businesses) and public sector organisations face difficulties and high costs in switching suppliers," an OFT statement said.
There were also questions around procurement practices and how they affect supplier behaviour. Various existing reports and ongoing initiatives will be taken into account by the OFT study – without duplicating analysis that has already been done – it said.
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