Press Releases

Government's New Standard Contract Terms Will Speed Up IT Buying Process

Ref: 13/04

The Government has today published new standardised contract terms, which will dramatically simplify the tendering process for IT suppliers.

The new terms, produced by the Office of Government Commerce (OGC), are in response to supplier requests to replace the existing myriad of separate public sector contract documentation with a choice of two, easy to administer 'standard' contract forms.

The new contract terms have also been produced in response to the Better Regulation Task Force and Small Business Council report titled Government: Supporter and Customer? This said that small and medium sized enterprises faced a number of barriers when trying to compete for government contracts. It also supports the move of public sector IT away from PFI as a method of financing such projects.

In addition, the OGC is offering new guidance to support the use of the standard set of terms and conditions. Both the IT Industry and Departments had specifically asked for guidance on contract usage.

Office of Government Commerce Chief Executive, John Oughton, welcomed the publication. He said:

"These new Contract Terms will simplify the IT tendering process and deliver significant time and money savings for suppliers and public sector buyers."

"The publication of these new terms shows that the Government continues to listen to the IT industry and is determined to simplify procedures and reduce duplication and bureaucracy in IT contracting."

The production of the new contract terms follows extensive consultation between the OGC, government departments and the IT industry, to establish a new standardised form of words acceptable to both sides.

About OGC

The Office of Government Commerce, an office of HM Treasury, exists to act as a catalyst in procurement issues and to work with central civil government and the wider public sector to achieve best value for money in their commercial activities. Against an initial target of £1 billion, OGC achieved Value for Money (VFM) gains of £1.6 billion up to March 2003.

Between 2003/04 and 2005/06 its target is to deliver £3 billion VFM gains from more effective government procurement and OGC has already achieved £2.0 billion in the first year. A new target was set for the Spending Review 2004 period to deliver a further £3 billion VFM saving by 2007/08 from public sector procurement through improvement in the success rate of programmes and projects and through other commercial initiatives.

Notes to Editors

Click on the link to view the publication: www.ogc.gov.uk/sdtkdev/new_content/decisionmap/tcintro.html

Following extensive consultation with Government Departments and the IT Industry, OGC is adding to its guidance on IT contract two standard sets of terms and Conditions. Both Industry and Departments have specifically asked for this guidance and the standard terms and conditions.

OGC will support government departments to standardise around the new contract model, so that bidding costs are cut considerably. For example suppliers will no longer need legal advice on different terms and conditions for every contract they bid for a government contract.

The existing guidance (published on the OGC website initially in December 2003 and recently updated and expanded) helps departments think through contracting strategy. It is publicly available, so departmental contracting strategies should become more predictable to supplying organisations over time.

OGC is running seminars to inform departments of the new contract terms and encourage them to use it. We are in discussion with Intellect about running joint seminars with them for the industry. Our consultants are also using this guidance in their work for departments and report encouraging feedback.