Shared services: Nine policy-focused departments seek £200m 10-year tech partners

The Matrix cluster – which includes the Cabinet Office, Treasury, and DHSC – is looking for software providers and systems integrators to jointly bid for contract potentially lasting more than a decade

Back-office software providers and systems integrators have been invited to team up to jointly bid for £200m-plus long-term contracts to support the adoption of shared services across nine of government’s most policy-focused departments.

The Matrix grouping of nine Whitehall agencies is one of five ‘clusters’ that, as part of government’s ongoing shared services rollout, will each adopt a unified system of core business software tools, such as finance, HR, and enterprise resource planning platforms.

Led by the Department for Science, Innovation and Technology, the cluster – which collectively employes almost 50,000 civil servants – has published a contract notice formally commencing a “bundled procurement” process. The procedure requires that proposals are jointly submitted by software publishers – who must offer an as-a-service model of provision – and SI partners that can oversee the implementation of the technology.

Suppliers can submit up to three separate bids in conjunction with different partners – and firms that believe they can fulfil both elements can also put forward solo proposals.

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Although they may bid in unison, if a joint bid wins two firms will be retained on separate contracts, with the software firm set to be appointed to a 10-year licensing agreement, while the SI will be awarded a five-year deal. Both these engagements, which are expected to come into effect in June 2024, can be extended for a further term of up to two years each.

Cumulative spending via the contracts is estimated to be £215.6m, plus VAT – which would take the value to almost £260m.

Bidding is open until 8 August.

Alongside DSIT, the eight other departments featured in the Matrix cluster are: the Cabinet Office; HM Treasury; the Department of Health and Social Care; the Department for Educationl; the Department for Energy, Security and Net Zero; the Department for Business and Trade; the Department for Culture, Media and Sport; and the Attorney General’s Office.

The Treasury, DfE, DHSC and Attorney General all already use cloud-based back-office systems, while the other departments are yet to do so.

Also included in the cluster are 20 arm’s-length bodies – including the Insolvency Service, UK Space Agency, and National Infrastructure Commission – and more could be added in due course, according to procurement documents.

Matrix has more the double the number of core departments of any other cluster and appears to have the most fragmented landscape of existing suppliers. According to the Shared Services Strategy for Government published in 2021, software from vendors including Oracle, MHR, Integra, Microsoft and Workday is currently in use across the nonet of departments.

The strategy outlines an expectation that the delivery partner across the policy-centric group would be UK Shared Business Services, which currently supports back-office software for DSIT, DESNZ, DBT and arm’s-length body UK Research and Innovation. The company is wholly owned by these government customers.

As of March 2022, ministers indicated that Matrix was considering retaining UK SBS, as well as looking options for in-sourcing or inviting bids on the open market – the option it is has ultimately chosen.

Matrix is the second cluster to launched a bundled procurement process for shared services, with the Synergy grouping of delivery-focused departments – including DWP, Home Office, Defra, and the MoJ – having last month gone to market seeking software firms and integrators to jointly bid for potential £1bn-plus opportunity.

Sam Trendall

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