As the government’s 2015 SME (direct and indirect) spending target of 25 per cent fast approaches, reports suggest that it’s on track. However, to really help drive the innovation economy, the government still needs to boost direct spend to SMEs. Yes, direct SME spend may have increased from just 6.5 percent in 2009/10 to 10.5 percent in 2012/2013, but it’s still a drop in the ocean overall. For years, the complex bidding process has proved prohibitively expensive for SMEs, and many government departments have been tied into decade-long IT contracts.

So what is being done to level the playing field? Well, there’s a light at the end of the government contract tunnel. At the beginning of the year, the government published a set of rules that sought to reduce the iron grip that the big integrators and tech goliaths have on public sector IT contracts and create real competition in the market. These included the fact that existing contracts would no longer be automatically renewed. In addition, the Cabinet Office stated that “no IT contract will be allowed over £100 million in value” unless there was an “exceptional reason”. Consequently, 2015 will see a series of large ICT contracts come up for grabs. Contracts with a number of the tech goliaths are being broken down into bite-size chunks that are far more palatable for SMEs, thus opening up the procurement process. For example, the Department of Energy & Climate Change’s contract with Fujitsu expired in April 2014 and the Cabinet Office’s Fujitsu Flex contract, which was signed in 2007 and expires in January 2015, is not due to be renewed.

Alastair Mitchell

Co-founder


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