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Public sector digital contracts’ value fell in 2017



Figures from Tussell Market Monitor point to 26% fall from previous year to £6.9 billion – with Cabinet Office frameworks the largest source of business

The value of UK public sector contracts on digital goods and services fell back sharply from the previous year’s peak in calendar year 2017, according to research by Tussell Market Monitor.

The provider of data on UK government contracts sets the total for the year at £6.9 billion, split between £3.0 billion for contract awards and £3.9 billion for business done on procurement frameworks.

This compares with a total of £9.3 billion for 2016, when just above half was accounted for by awards, and £6.3 billion for 2015.

The volume of procurements slipped back to 4,395 last year from 4,778 in 2016, but was higher than the 4,229 deals in 2015.

The estimates come from procurement notices published on the TED supplement of the Official Journal of the EU and GOV.UK Contracts Finder, and it is understood that the reduction is accounted for partly by the delay that often occurs in publication. 

But it is also related to the size of some major contracts agreed in 2016; notably the London Borough of Harrow’s £1.2 billion Project Infinity partnership with IBM, and a handful of frameworks worth hundreds of millions each in the higher education sector and the NHS.

Largest buyer

Tussell’s breakdown for 2017 makes the Cabinet Office the largest buyer in volume and value with 327 deals at just over £1.0 billion. More than 90% of this come from frameworks, reflecting the activities of the Crown Commercial Service within the department.

Glasgow City Council comes up second with £800 million worth of business, reflecting its agreement on a long term outsourcing contract with CGI Group – rated by Tussell as the largest single deal of the year.

Next comes the Metropolitan Police with £580 million, the Home Office with £506 million, Highways England with £490 million and the London Universities Purchasing Consortium with £480 million.

CGI emerges as the largest value supplier, accounting for £843 million, followed by tech and network services provider Telent with £476 million and Moss Consultants with £230 million – all through its digital forensics managed service deal with the Met Police.

Going into the new year, two open tenders stand out with values in excess of £100 million each: the Scottish Government’s procurement of the Next Generation Access broadband infrastructure at an indicated £600 million, and the Foreign & Commonwealth Office’s contract for Global Voice and Data Connectivity Services at £350 million.

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