Home Office signs £90m deal to cover ‘software tail spend’

Department appoints reseller Phoenix to manage acquisition of tens of millions of pounds of high volume but low value software products over the course of a contract lasting five years

The Home Office has signed a long-term contract for a single supplier to manage its “tail spend” for software products over the next half-decade.

Tail spend refers to the masses of one-off or infrequent software purchases made by large organisations. These acquisitions are typically high in volume and low in value, and are made to serve an immediate need, rather than a longer-term or strategic objective.

To help oversee all such transactions, the Home Office entered into a five-year deal with specialist tech reseller Phoenix Software. The deal is valued at £15m a year, plus VAT – equating to a total expected spend of £90m during the lifetime of the engagement.

The text of the contract reveals that the IT supplier will meet with the department once a week to go over open procurement processes, current licence entitlements, planned deliveries – and any “ad hoc requests” for new products.

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These weekly catch-ups will be supplemented by monthly service-review exercises, and quarterly planning meetings.

“In addition to [these] governance meetings, the supplier will be expected to be proactive and will meet on a needs basis driven by market changes and [the department’s] transformation needs to offer their expertise and market-related guidance on software providers, related services, innovations and potential alternatives that would be a benefit to the [department].”

Headquartered near York, Phoenix is a major supplier of software products and services to the public sector. The firm’s recent wins include a pair of £12m deals with Essex County Council and the Department for Levelling Up Housing and Communities, a £9m engagement with Hampshire County Council – and another contract with the Home Office, worth £30m and covering the provision of Microsoft Azure public cloud hosting services.

Sam Trendall

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