Channel buzz builds for Technology Products successor

Replacement set to go live in September

Anticipation is building in the channel for the replacement of the public sector's outgoing commodity IT framework, Technology Products, which is set to expire in November.

Technology Products had an estimated purse of £4bn to £6bn and consisted of 36 suppliers across four Lots. After being delayed by two legal challenges, it went live in November 2014 and is due to expire on 16 November 2016. The procurement vehicle can then be extended for one year after this date, and another year after that.

However, the CCS looks set to re-tender the framework in 2016, as a document on pre-market engagement shows the CCS intends to place a contract notice for suppliers in mid-May this year with the deadline for suppliers to bid being the start of July. The framework agreements are slated for award in September.

According to one source, the reason for the decision not to extend the framework could have been due to a lack of business done through it, particularly on the software side.

"I had a look at some of the agenda points they had for their customer discussions and one of them was response rates on tenders that are on the framework," he said. "That euphemistically means they are getting feedback from customers that they don't get many bids. In particular, if you are in the software space, the artificial restrictions on mark-ups mean it's not very worthwhile to bid for stuff, unless you have an advantage - for example with deal registration."

The source said that when the CCS devised Technology Products, Microsoft was giving out standard back-end rebates of four per cent, and the procurement body then "implied" that resellers would have to go in at cost to get on the framework, to reflect the Microsoft rebates. But Microsoft and others then began reducing these rebates, which meant resellers often couldn't find the margin to make it worth bidding for a lot of business.

"Essentially, unless there was a wider opportunity for back-end fees or with deal registration, then the restrictive transactional business for commodity licence renewal agreements just became difficult to sustain," they added.

According to a document published by CCS in December, Technology Products had annual sales of £750m.

Another supplier, who did not wish to be named, felt on the whole the framework has been a success, but said that Lot four, End-User Computing Devices, was generally under-used.

He said this Lot worked as a catalogue where customers would choose the products they wanted and there was a fixed price list.

"I guess a starting point for most organisations would be 'what are you trying to achieve?'", he said. "And I don't think that lends itself well to the catalogue route, particularly with services."

When approached, CCS declined to comment but did direct CRN to information on a series of supplier workshops it held this month on Technology Products' successor.