Suppliers still sweating on CITHS successor
With possibly the public sector's largest IT procurement vehicle fast approaching its end, should suppliers and procurers start to worry?
With the mammoth Commoditised IT Hardware and Software (CITHS) framework set to come to an end in less than six months' time, suppliers may be beginning to get a little nervous at the lack of news of a successor. Their unease will doubtless not be helped by the fact that CITHS expires one month before the end of the government's fiscal year, just as public sector procurement professionals enter the busiest spending period of the year.
OJEU regulations stipulate that framework agreements last no longer than four years, at which point the deal must be re-tendered, unless an exceptional extension is granted. CITHS, which came into effect in March 2010, was slated for an initial 42-month term, with the option to renew for a final six months, which was taken up as of the start of this month.
Four years
maximum length of frameworks under OJEU regulations
21
number of suppliers on CITHS framework, across three lots
Although there are still more than five months before the framework expires, it is safe to say the Cabinet Office is cutting it a little fine. Finer, at least, than incumbent providers and prospective bidders would like.
The road to CITHS
If the length of the process is comparable to the equivalent bidding procedure that saw CITHS awarded in 2010, then the government would already be more than two months behind schedule - even if a contract notice went out today. And, on that occasion, there was at least the safety net of an outgoing agreement that overlapped its successor by two months.
The original contract notice for CITHS went out on 22 July 2009, with the start date of the contract set for the end of February the following year. Suppliers were formally unveiled more-or-less bang on time, on 3 March 2010, following various delays as bidders appealed their exclusion after both the pre-qualification phase and the intention-to-award decision.
A total of 21 suppliers were ultimately selected across three lots, with 12 providers picked to supply desktop hardware, 13 selected for the infrastructure hardware lot and 10 for the software lot. The framework CITHS replaced ran until 30 April 2010, meaning procurement chiefs could opt to buy through either framework for two months.
224 days
duration of CITHS tender process, from contract notice to formal award
154 days
time until CITHS expires
Suppliers had been expecting the tendering process for the successor to what may well be the government's largest IT frameworks to get underway this summer. But, with the weather turning colder and the leaves beginning to fall, potential providers are still awaiting news.
A prior information notice could go out as early as next week, but onlookers claim it will likely be about 10 days before we can expect to see such a document released.
Where next?
It is understood that the new framework will also be structured a little differently, with some lower-value commoditised items likely to be purchased through an online catalogue. The Government Procurement Service (GPS) could well elect to appoint a third-party portal provider to manage such a service, a move that will surely add complexity to an already tight schedule.
If a replacement framework - or an exceptional extension to CITHS - is not in place by the beginning of March 2014, central government IT and procurement professionals will head into the end-of-year budget flush with no apparent means of making the necessary technology investments for the year ahead.
Jamie Burke, public sector sales director at Softcat, which features on the infrastructure and software lots, claimed that he was "nervous, but not panicking" that the starting gun is yet to be fired on a successor for CITHS.
"We have been in dialogue with GPS and that has reassured us," he explained.
Robin Phillips, head of bid at Trustmarque, which is on the software lot, also expressed a degree of concern, but praised the inclusive approach being taken by the government.
"Clearly it's not ideal to be in this extension period with uncertainty remaining around the schedule and shape of a successor framework, but we're heartened that GPS is taking such a consultative approach to gain input from customers, suppliers and partners across government," he said.
"We're confident this approach will result in a framework that is fit for the shifting landscape of IT, and one that drives better value and supports greater innovation for the public sector."
£6bn
CITHS budget over four-year term
£6.9bn
total government IT spending in 2011/12
Paul Sweeney, managing director of ANS Group, which features on the infrastructure lot, conceded that the start of March "is not the best time to be ending a framework".
"But hopefully it will drive a bit of discipline and people will get their procurement done in a timely manner in February," he added.
The ANS man asserted that his firm would bid for a place on CITHS's successor, but stressed that other contracts may prove equally important.
"They are pushing people more towards G-Cloud and we have put our efforts into making sure that we are well positioned on that framework," he explained.
Alternative therapies? Guy Beaudin, public sector business development director at Insight, which features on all three lots, claimed that an accelerated procurement process could still see a replacement for CITHS in place in time for the 28 February expiry date.
He predicted that the impending end of the framework may cause "fear and uncertainty" among some customers and suppliers, but stressed that CITHS is not the be-all and end-all for big government customers. He pointed to the existence of a number of other contracts which public bodies could make use of, in particular the £4bn IT Hardware and Services deal, which was launched last summer.
"People may say these frameworks come around only every four years, but in reality there are 20 frameworks through which the government can buy a PC," he explained. "Insight has prepared paths for our customers; apart from CITHS, we are on 14 other national agreements and can still support our customers through their procurement needs from the end of February until whenever a new framework is launched."
Figures released earlier this month reveal the government spent £6.9bn on IT in 2011/12. If the £6bn budget for the CITHS framework was split evenly over its initial 42-month term, then about a quarter of the government's annual IT spend in FY12 will have been funnelled through the framework.
Although the future of one of the public sector's biggest IT procurement vehicles remains up in the air, one thing is for certain: suppliers and spending chiefs will be getting increasingly anxious as they wait for news of its successor.
The Cabinet Office was unavailable for comment as CRN went to press.
No novation for Equanet CITHS customers
All original suppliers rubber-stamped their extension for the final half-year period of CITHS, with the exception of Dixons Retail, which has sold since sold Equanet to Kelway. The formerly Dixons-owned firm previously held a spot on the desktop hardware and software lots, while Kelway features independently on the desktop and infrastructure hardware lots.
A statement on the Government Procurement Service website says: "As Equanet is a trading name and not a separate legal entity, we will not be novating the... framework agreement to Kelway. This decision is based upon legal advice and a previous legal precedent. In addition, we have agreed with [Dixons] that their framework will not be renewed beyond 28 August 2013."
The statement outlines that, for government customers with existing contracts with Equanet (which, under the terms of the framework, could be up to five years in length), Dixons "is required to honour its contractual obligations to your business". Any customers considering a novation of their existing deal to Equanet's new owner are advised that "it is best practice to re-tender the contract under the framework".