The UK's National Audit Office (NAO) has released a critical report into the way the government has worked with technology suppliers, saying it has wasted taxpayers’ money and missed opportunities to modernize government.
Government departments have treated tech suppliers in the same way as any other, according to the NAO, with procurement guidance failing to address all the complexities of digital commercial issues.
It must learn from its past procurement approaches to large-scale digital transformation projects, which have experienced decades of poor progress and billions of pounds in cost increases.
The government’s central digital function, which leads on digital and data policy, isn't formally responsible for - and lacks the resources for - more extensive engagement in digital procurement.
Meanwhile, the report warned there aren't enough people with digital commercial skills in government - and departments aren't making full use of the digital expertise they do have when procuring for technology-enabled business change.
Similarly, commercial teams often fail to engage their internal digital experts at the right time.
Digital contracts are awarded without enough preparation, with teams often rushing to award contracts because of pressure to deliver, without always fully understanding what is actually needed from a contract.
Notably, approaches to contract design can have a negative impact on successful digital delivery, with the government sometimes opting for mechanisms which limit the flexibility for suppliers to use their expertise to help the government deliver the desired outcomes.
"A lack of digital and procurement capability within government has led to wasted expenditure and lack of progress on major digital transformation programmes," said Gareth Davies, head of the NAO.
"Government needs to rethink how it procures digitally, including how to deal with 'big tech' and global cloud providers that are bigger than governments themselves. The creation of the new digital centre of government provides an opportunity to make the systemic changes that are needed."
The NAO said that it's the central government that should decide who takes ownership for addressing the problems it's identified, producing a sourcing strategy to include improvements in how it deals with ‘big tech’ and strategic suppliers.
It should also create a digital skills plan to plug recruitment shortfalls and to improve the way decision makers responsible for digital commercial activities and ensure teams are equipped and trained.
For individual departments, the NAO wants to see them strengthening their ‘intelligent client function’. They need to identify and develop key requirements before tenders and bid processes commence, and improve how policymakers and technical specialists work together with procurement specialists.
They should also improve their capability to collect and use data to inform a pipeline of supply and demand, which would help the center of government build a more strategic approach to suppliers.
