Mark Hall
By Mark Hall, public sector director at Redcentric; and Peter Nailer, senior bid manager at Redcentric
From vehicle hire to laundry services to enterprise technology – there are now countless purchasing frameworks for almost anything the public sector needs to buy. Take the Digital Marketplace, specifically covering technology. The several frameworks within it, such as G-Cloud, comprise numerous different lots with each of these offering a variety of technology choices. Add to this all of the other buying organisations and their frameworks and quickly the options for the public sector buyer become complex and downright confusing! As an IT services provider included on frameworks such as G-Cloud 7 and the NOECPC Hosting framework, at Redcentric we have had a front row view of how frameworks have evolved. Originally established to help simplify purchasing (particularly for smaller public sector buyers with limited buying power) and bring cohesion to public sector procurement, there have been many success stories. However, as the number of frameworks grows by the day, are frameworks still doing the job they set out to?
Considering that sales over G-Cloud recently hit £1 billion, it is clear to see that this framework has achieved its goal. With some 1,900 approved suppliers in place it has created a highly competitive marketplace centred on the government’s ground breaking ‘Cloud First’ strategy for both SMEs and large IT suppliers.
The conditions set by G-Cloud encourage fairness by ensuring a level of transparency. For example, suppliers have to publicly display pricing on the framework to give each other an accurate view of what they are charging, allowing competitors to set their rates accordingly. Also thanks to G-Cloud contracts not exceeding two years, buyers aren’t stuck with suppliers for an excessive length of time, and can rethink their options as they themselves evolve.
But the benefits and adoption of G-Cloud do not resonate across many other frameworks. Some place a cap on the number of suppliers able to win a place on the framework effectively creating monopolies dominated by big players who have the resources to apply. These caps fail to properly harness competitiveness amongst suppliers and do little to encourage them to innovate. Some framework contracts are set for as much as four years, tying organisations into long relationships that may go beyond their requirements.
The increase in volume of frameworks is also a problem. This rise is partly due to fact that any organisation operating in the public or not-for-profit sector has the authority to establish a framework and encourage other organisations to use it – provided they comply with EU law. Everything from schools and colleges to district councils and charities have done so, drawn to the commercial gains and incentives. For every sale made over a framework the founder receives a commission of between 1 and 5%.
Frameworks: a victim of their own success
So let’s consider, does the current framework landscape meet its goal: to make public sector buying easier and more cohesive? The answer is complex- in some cases, like G-Cloud, the answer is yes, in many cases the answer is no.
Speaking from a supplier perspective, the sheer volume of frameworks that exist, even just in relation to IT, create pressure to apply for a place on them all in order to avoid missing out on potential business. This can be a full time job, with smaller suppliers who lack resources pushed out. Once again this means that larger suppliers are likely to realise greater opportunities, reducing the ability of frameworks to deliver a level playing field. But more worryingly is the impact on innovation. As the choice of suppliers diminishes so too does the choice of innovative and cutting-edge solutions from start-ups that lack experience and funds to gain a place on the framework.
As technology frameworks have increased in public sector procurement, the IT community has responded with a rise in the level of subcontracting used to deliver the work required against them. However, this goes against the transparency that frameworks are meant to provide. Naturally for simplicity sake, IT managers tend to prefer a single supplier to meet all of the organisation’s needs, meaning that many IT suppliers have to outsource to deliver the full service. But this too favours the big suppliers, as they can afford to win a place on the framework, but then subcontract most of the work to smaller companies who can only be on a framework via their contractee. Larger suppliers retain a cut of the profit generated from the sale, passing small margins on to contractors who deliver much of the work.
Public sector buyers are already faced with complexities when using frameworks to procure resources. While the frameworks aim to support buyers by undertaking compliance checks of suppliers, there can still be a burden on the buyer as regulations change or are updated. Take the Public Contracts Regulations 2015, which is available in a 127 page document at www.legislation.gov.uk. While it’s down to suppliers to review and ensure they’re compliant, it’s often a non-procurement professional, such as an IT manager, who is the one making a technology purchasing decision with limited knowledge, understanding or time to review regulations.
So how can the situation be improved? Firstly a holistic review of all frameworks in operation across the public sector would help to show where effort is being duplicated and if there is an opportunity to pool the buying power of multiple framework operators and buying organisations. Frameworks need to start properly delivering on the goal of bringing the buying power of many public sector organisations together, to forge better deals and consistency, rather than just flooding the market with different options. There should be more regulation of framework provision, rather than an open book, ‘the more the merrier’, approach.
The popularity of a framework approach has certainly taken off, but in recent years we’ve seen the market grow in complexity rather than simplify purchasing. With large companies still dominating an increasing number of frameworks, and many lacking transparency with regards to sub-contracting, it’s possible the market may well end up counter-productive. Clearly this is where the success of G-Cloud should be heralded as a way forward for other service areas and lead others by example.
While the copious amount of frameworks may baffle public sector buyers, service providers can step in to help reduce the confusion. Redcentric offers a free consultation service in line with the ‘Cloud First’ goal. Our service establishes how Cloud and hybrid options can help specific public sector organisations achieve their objectives, and determines what digital services they will benefit from. The benefit of Cloud, including flexibility and remote working, are too plentiful not to adopt. And a successful implementation starts with a consultation to see how it can best suit the individual organisation.
To discover how Redcentric keeps it simple – providing efficient, secure and flexible Cloud solutions for the UK public sector contact us on:
Call: 0808 164 3515
Visit: www.redcentricplc.com/public-sector
Email: sayhello@redcentricplc.com
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