Is your IT purchasing route delivering the best available value?

For most public sector IT purchases, the hard question isn’t which product to buy. It’s how to buy it. There are more frameworks than any buyer can track, several ways to call off from each one, and the option of running your own procurement or joining a collaborative deal. Each route has different costs, timescales and levels of competition. Most teams pick the one they used last time.

That habit deserves a second look. In its July 2024 report, Efficiency in government procurement of common goods and services, the National Audit Office (NAO) described a public procurement system that is largely decentralised, with at least 8,000 frameworks and no definitive list of them. It found scope to improve competition within frameworks, to make better use of purchasing data and to aggregate more buying across the public sector.

For an IT or commercial lead, that raises a practical question: before you commit, how do you know the route you have chosen offers the strongest overall value?

What the NAO found

The report focuses on the Crown Commercial Service (CCS) and central purchasing, but several findings apply to any IT buyer choosing a route to market:

• The framework landscape is fragmented. The NAO estimates the public sector market for common goods and services at around £125 billion a year, with about £25 billion going through CCS frameworks in 2022-23. Third-party data providers have identified between 8,000 and more than 21,000 public sector frameworks, and government has no oversight of them all.
• Fees vary widely. Framework providers charge suppliers a levy or commission of between 0% and 11% of contract revenue. CCS’s average levy is 0.7%, but some privately operated frameworks charge as much as 5% to 6%. The NAO notes that these charges may, in some cases, encourage direct awards over competition at call-off.
• Competition within frameworks is often thin. Of 308 CCS framework lots with spend above £100,000 in 2022-23, 24 had only one supplier. In a further 25 lots, every contract went to a single supplier even though others were available.
• Price comparison is hard. There is no central portal or database for buyers to compare prices between framework providers. The NAO also reports that many buyers prioritise ease of use over price when choosing a framework.
• Mini-competitions help. Some commercial directors told the NAO they get the most out of CCS frameworks by running a mini-competition, and the report encourages buyers to use direct awards only where “clearly justifiable”.
• Aggregation is underused. The NAO says government has made progress on collective buying but has more to do. Departments cited practical difficulties in aligning purchase timing and a lack of data to decide whether to opt in.

None of this means frameworks are poor value. Used well, they save time and reduce procurement risk. The point is that the route itself is a commercial decision, and it deserves the same scrutiny as the price.

Why the route matters so much for IT

IT requirements are particularly sensitive to how they are bought:

• Similar services, very different terms. The same cloud, licensing or managed service may be available through several frameworks, each with its own pricing ceilings, fees and call-off terms.
• Direct award is tempting. When deadlines are tight, a direct award from a familiar supplier looks quick and safe. It also removes the pressure that competition puts on price and scope.
• Packages hide costs. Bundled services, premium support tiers and optional modules can end up in a package because they were in the supplier’s standard offer, not because you need them.
• Requirements are fragmented. Separate teams buying compatible services at different times lose the leverage they would have if they bought together.

Signs your route has not been properly tested

• You chose the framework because it was the one you used last time.
• The plan is a direct award, and nobody has recorded why a further competition would not give better value.
• You have not compared pricing on at least one alternative compliant route.
• Other parts of your organisation, or nearby bodies, are buying similar services on different timelines.
• The proposed package includes items nobody has challenged line by line.

Comparing the main routes

Every requirement is different, but most IT purchases come down to four broad options. Each has a place:

• Direct award through a framework. Fast and low effort where the framework allows it. The trade-off is that price and terms are not tested against other suppliers at the point of purchase.
• Further competition (mini-competition) through a framework. Keeps much of the speed of a framework, while giving suppliers a reason to sharpen price and tailor their offer to your requirement. It only works well if the lot has enough active suppliers.
• Your own competitive procurement. Takes longer and needs more capacity, but lets you shape the requirement and reach suppliers who are not on a suitable framework.
• Aggregated or collaborative buying. Combining compatible requirements across teams or organisations can improve pricing through volume, but it depends on aligned timing, shared specifications and good data.

Under the Procurement Act 2023, direct awards and contract changes come with greater transparency obligations. Whichever route you choose, you should be able to explain why it offered the best value.

A practical method for testing your options

1. Define the requirement first. Agree the outcomes, volumes and service levels you need before looking at routes, so the route fits the requirement rather than the other way round.
2. Map the compliant routes. List the frameworks and lots that genuinely cover the requirement, plus the option of your own procurement or a collaborative deal.
3. Check the competition behind each lot. Look at how many suppliers are active on the lot, not just how many are listed.
4. Benchmark the price. Compare unit rates and total cost with current market data and the ceiling prices on each framework.
5. Challenge the package. Strip out services, tiers and add-ons that don’t match your requirement, and look for compatible requirements that could be bought together.
6. Compare whole value, not just price. Weigh service quality, contractual flexibility, exit terms, framework charges and the full cost of delivery, including transition and internal effort.
7. Record the decision. Document why you chose the route. It protects the decision and makes the next purchase easier.

When to start

Route selection works best when there is still time to use the answer. For a significant IT purchase, start mapping routes and benchmarking at least six to nine months before you need the contract in place. Aggregation needs longer, because partners must align their timelines.

What could a better-tested route be worth?

Savings can come from stronger competition, from combining compatible requirements, or from removing unnecessary cost from the proposed package. As a simple illustration, a £40,000 annual reduction on a three-year agreement looks like this:

This is an illustration, not a forecast. Figures are gross savings before transition and advisory costs, and actual results depend on the requirement, the market and the route taken.

The right comparison is never price alone. A route that saves £40,000 a year but brings weaker service, rigid terms or a costly transition may not be the better choice.

Frequently asked questions

Is a direct award through a framework always poor value?
No. Where a framework allows it and the price has been properly tested, a direct award can be the right choice. The NAO’s point is that direct awards should be used only where clearly justified, and that justification should be based on evidence.

What is the difference between a direct award and a further competition?
A direct award goes to one framework supplier based on the framework’s own terms. A further competition, or mini-competition, invites suppliers on the framework to bid against your specific requirement, usually on price and quality.

How do we know which framework is best for our IT requirement?
There is no central tool for comparing prices across framework providers. The practical answer is to map the frameworks that genuinely cover your requirement, check how competitive each lot is and benchmark the pricing against market data.