UK competition watchdog to examine government IT contracts

Reuters

LONDON (Reuters) - Britain's competition watchdog on Tuesday said it will examine government information technology contracts to see whether the biggest firms win too great a share of the work.

The Office of Fair Trading had already raised concerns that some firms had a large share of contracts, that there were high barriers to entry and that public sector organisations faced high switching costs.

The study of the market will focus on commercial off-the-shelf software, such as that used for administering benefits, and outsourced IT, which between them accounted for around half of the 13.8 billion pound public sector IT spend in Britain in 2011/12.

It could result in a referral to the Competition Commission or a request for voluntary action from companies and state bodies. If the OFT finds firms have broken the law, it could launch 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 private providers are being examined more widely.

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

(Reporting By Christine Murray; Editing by Paul Sandle)

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