11/24/2010 11:15:00 AM
Government to scrap £800m mobile contract
The Government is to terminate an £800m mobile and data services contract with Vodafone, O2, Everything Everywhere and BT 11 months early in a bid to slash costs.
In its place, the Government wants to set up either an MVNO deal for mobile and data connections or bulk buy its connections through regular bidding competitions.
Currently, the Government procures its mobile and data connections under a four-year £800m framework contract, known as Mobile Solutions II, using 10 telecoms suppliers including Vodafone, O2 and Everything Everywhere.
Mobile Solutions II was up for a two-year extension this month. However, the Government’s Efficiency and Reform Group (ERG), which is investigating all Government contracts, has ruled that the contract will only be extended for another 13 months.
A source at Buying Solutions, a division of the Cabinet Office that oversees Government procurement, said: ‘The ERG has approved a 13 month extension only on the proviso that at the end of that period a more efficient and less costly way of providing mobile and data services is found. The view is there are further savings to be found.’
The source added: ‘We will look at whether there should be another framework agreement or something completely different. Some of the alternatives being considered are an MVNO purchasing wholesale connections or going to the market with regular one-off competitions for committed, aggregated volumes.’
The 13 month extension to the Mobile Solutions II contract was confirmed earlier this month. The deal is worth £200m. The framework contract is divided into three lots with four framework suppliers in each lot.