Channel awaits cost of OGC contracts

Government claims model contracts will save time and money

VARs are bracing themselves for the financial repercussions of the latest government contracts aimed at local authority procurement.

The Office of Government Commerce (OGC) last week released two draft model contracts - one for the provision of goods and the other for services – designed to make local authority contracts more consistent and help reduce procurement time.
Both draft contracts, which are not exclusively IT-related, will be reviewed at the end of the month.

The contracts cover projects ranging from £140,000 to £1,000,000 and have been jointly produced with organisations including the North West Centre of Excellence.

An OGC representative told CRN: "The contracts will help local authorities to achieve their efficiency targets, e.g. save money. It will be up to each public sector body if they require each private supplier to comply to the draft contracts though."

However, Johnathan Tunstall, Microsoft solutions director at VAR Mantix, said they could have a negative affect on the channel.
"This could force small organisations to bow out of contracts because they can't carry the contract risks. This has the potential to stop the government from achieving its aims of working with a broader range of suppliers, such as the small suppliers on the Catalist list."

Back in 2004 the OGC created similar central government contracts that many industry figures and IT trade body Intellect, believed could have led to a greater burden of risk being placed upon suppliers and an increase in the cost of government IT (CRN 25 October 2004).

Nick Kalisperas, director of markets at Intellect, said: "The basic principal [of the local authority contracts] is sound and welcome, but we would like to review the contracts to help ensure a balanced procurement environment."

Steve Derbyshire, managing director of VAR Telamon, said: "If you sign the contracts you are asking for whatever you get, but if you see something in it you don't like then try and negotiate around it or don't sign it."

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