The G-Cloud reached its second birthday in February but not everyone was celebrating. Critics of the platform point to figures which show that almost 90% of local authorities haven’t completed a procurement process using the G-Cloud, with some citing complexity and lack of understanding of products listed as barriers to purchase. Perhaps even more damaging is the statistic that some 80% of vendors on the platform have yet to make a sale.
But criticisms of the G-Cloud only tell one side of the story and the platform has unlocked some valuable improvements in the two years of its operation to date. In technology, as with many other industries, smaller players tend to be at a disadvantage when it comes to bidding, winning and retaining public sector contracts due to the public sector procurement process.
The UK has one of the most expensive and lengthy public sector procurement processes in Europe. Research by CEBR, carried out on Gatewit’s behalf, has found that the UK has the fourth highest costs in Europe for both submitting and attracting bids – typically 90% higher than the EU average. The cost of bidding for contracts is a disincentive for SMEs, effectively excluding some from the process.
The Cabinet Office-controlled G-Cloud platform was launched to make it easier for the government to buy IT from SMEs, and break the mega vendors’ stranglehold. Overall the G-Cloud has been a winner for SMEs. According to civil service figures, 55.3% of total sales by value and 63.4% by number have been awarded to smaller enterprises since the scheme’s inception.
One of the key benefits of the G-Cloud framework for Government is the simplification of the bidding process. This means a reduction in hours spent in applications for each project (once a business is accepted as an approved vendor, there is no need to prove credentials again) which means smaller companies can save time and resources on each bid. In effect, the cost per bid decreases.
Whereas massive technology companies have whole teams dedicated to this process, it is much more burdensome for SMEs and smaller companies are less able to absorb these time-consuming administrative tasks. A properly organised and structured e-procurement platform such as the G-Cloud will ensure that competition is on the merits of the product offering, not the resources available for bidding. This also increases choice for public sector buyers, therefore increasing the chance that best value will be achieved for the taxpayer.
We must not forget that the G-Cloud has had its successes. As of December 2013, 56% of the £92m total spend made via the CloudStore had found its way into the pockets of small or medium sized enterprises. As the Government tries to end the era of monolithic IT contracts being awarded to one of an oligopoly of multinationals, this is undeniable progress.
No one is suggesting that this is 'mission accomplished' for the G-Cloud, and awareness must be raised if progress is to be made. Figures have shown that up to 76% of local councils have no idea what the platform is or how to use it. With round five of vendor admissions to the G-Cloud now underway, raising awareness of the platform and the benefits it brings, not just for individual suppliers but for the public sector as a whole, is the cornerstone of its future success.
Pedro Paulo is CEO at Gatewit.
