Gov extends Oracle deal for three more years, citing vague savings

The Crown Commercial Service (CCS) has extended the government's dealings with Oracle for another three years, claiming it will lead to unspecified public sector savings.

The CCS, the government arm responsible for Whitehall procurement policy, has signed a Memorandum of Understanding (MoU) to extend a 2012 deal with the technology giant that was meant to realise savings of 75 million over three years.

The new agreement expands the scope of the contract to encompass the NHS and other public bodies, and like the former contract, the MoU focuses on software licensing rather than hardware.

Sally Collier, chief executive ofCCSsaid: "The enhancedMoUwill deliver savings across government and allow easier and more effective procurement of Oracle products and services. It lays the foundation of a more collaborative relationship between government and Oracle."

The original contract with Oracle simplified the way government paid the database giant, by channelling the myriad department deals with Oracle through a Procurement Office (now, likely the CCS), enabling Whitehall to buy in bulk.

The deal also allowed software licenses to be re-used across departments, meaning IT teams wouldn't need to buy new licenses when spare, unused ones are available, and set pricing with Oracle until 2015.

Pricing has presumably been renegotiated with Oracle now (and IT Pro has approached both parties on this), but neither Oracle nor the CCS has shed any light on what the expected future savings will amount to or where they will come from.

Oracle's senior VP and UK country leader Dermot O'Kelly said: "We are delighted to demonstrate our commitment to the agenda of the new government in saving money and delivering leading-edge information technology to help transform public services. We look forward to continued productive and mutually beneficial relationships with our public sector customers."

The contract extension was signed a fortnight after outgoing GDS chief Mike Bracken announced his departure from Whitehall's coding arm, which is embarking on a new strategy to replace legacy IT contracts with common IT components, an initiative known as Government-as-a-Platform.

Rumours suggest chief executive of the civil service, John Manzoni, does not support the idea, and Bracken's departure led to a spate of GDS resignations.

The Oracle contract renewal is the latest Big IT deal government has announced, after the Ministry of Defence selected the underperforming Atlas Consortium, led by HP, to deliver its new IT infrastructure in two contracts collectively worth 1.5 billion.

Both deals are in contravention of GDS recommendations to source IT from smaller suppliers, and the MoD contracts do not comply with Cabinet Office red lines to limit IT contracts to 100 million.

IT Pro has approached both Oracle and the CCS for more details.