The government’s handling of volume pricing discount deals with major technology suppliers like Microsoft and Amazon Web Services (AWS) is being called into question by the National Audit Office (NAO). According to the NAO, these deals do not fully leverage the collective buying power of the public sector, as outlined in a recent report on the UK government’s technology procurement practices.
The report highlights concerns about the lack of transparency and evaluation of the benefits derived from these arrangements. The Crown Commercial Service (CCS) oversees these agreements, known as memorandums of understanding (MoUs), which aim to secure preferential pricing and discounts for public sector IT buyers. However, the NAO points out that there is insufficient information available on the demand for digital services within government departments, hindering the government’s ability to negotiate effectively with tech suppliers.
Furthermore, the NAO raises broader issues regarding the recording of government spending with tech suppliers, citing knowledge gaps and inconsistencies in tracking spending data. This lack of clarity makes it challenging for the government to make informed decisions and maximize its buying power. The report also highlights a specific instance where CCS struggled to renew its agreement with Microsoft, requiring assistance from other government entities to negotiate terms.
In addition to the NAO’s findings, the State of digital government review published by the Department for Science, Innovation, and Technology echoes concerns about the public sector’s fragmented approach to tech purchases. The review notes the absence of a cohesive digital sourcing strategy and a collective buying drive, leading to suboptimal terms and vendor management practices.
Overall, the reports emphasize the need for a more coordinated and strategic approach to technology procurement within the public sector. By leveraging its collective buying power and implementing common frameworks, the government can ensure better value for money and more effective supplier relationships.
