New guidance released by the Cabinet Office, following EU regulations to encourage SMEs in public procurement, states that no government IT contract should be worth more than £100m.
Cabinet Minister, Francis Maude, set out three other ‘red lines’ in rules published on Friday, which included an end to automatic contract extensions and a stipulation that hosting contracts, such as for government websites, should not last more than two years. Also, companies with a contract for service provision will not be allowed to provide system integration in the same part of government.
The new rules are hoped to encourage as many suppliers as possible to compete for public sector technology contracts.
Maude said: “Big IT and big failure have stalked government for too long; that is why this government is radically rethinking the way it does business. “We are creating a more competitive and open market for technology that opens up opportunity for big and small firms. These red lines will ensure the government gets the best technology at the best price and we will be unashamedly militant about enforcing them to provide value for hard-working taxpayers.”