UK competition watchdog to examine government IT contracts

Reuters

LONDON, Oct 15 (Reuters) - Britain's competition watchdog onTuesday said it will examine government information technologycontracts to see whether the biggest firms win too great a shareof the work.

The Office of Fair Trading had already raisedconcerns that some firms had a large share of contracts, thatthere were high barriers to entry and that public sectororganisations faced high switching costs.

The study of the market will focus on commercialoff-the-shelf software, such as that used for administeringbenefits, and outsourced IT, which between them accounted foraround half of the 13.8 billion pound ($22.1 billion) publicsector IT spend in Britain in 2011/12.

It could result in a referral to the Competition Commissionor a request for voluntary action from companies and statebodies. If the OFT finds firms have broken the law, it couldlaunch competition enforcement proceedings against them.

The top five IT suppliers to Britain's public sector are HP, Capita , CapGemini, Fujitsu and BT.

The news comes as government contracts with privateproviders are being examined more widely.

Serco and G4S, two of its largest providers are facing apossible Serious Fraud Office investigation for allegedovercharging on a tagging contract, while the National AuditOffice is studying government's largest relationships.

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