Treasury signs £20m software deal

Government’s finance department has picked frequent public sector partner Phoenix to fulfil both its need for Microsoft wares and other products, in a contract that could run for five years

HM Treasury has signed a £20m-plus contract to cover a comprehensive range of the department’s software licensing needs.

On 1 April, the organisation will enter into a three-year deal with reseller Phoenix Software. The contract will cover both core Microsoft technologies as well as “other software licensing and associated services”.

During the procurement process, these two respective areas were each treated as an individual “basket”. According to commercial documents newly published by the Treasury, Phoenix “ranked first in our evaluation for both” segments and was, thus, awarded “one combined contract to incorporate the services of both basket one and basket two”.

The contract-award notice added that the department was “seeking a supplier to deliver a value-added service… as opposed to a simple resale of software licences and associated services”. The chosen provider will be expected to “gain an understanding” of the Treasury’s software infrastructure.

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Over the course of its initial three-year term, the deal will be worth £18.6m to Phoenix – or about £21.7m, if VAT is included. The contract also offers the department two further optional extensions of one year each.

The engagement was awarded via the £12bn Technology Products & Associated Services 2 framework, which was put in place last year and runs until April 2026.

Phoenix is an supplier to HM Treasury, having held the non-Microsoft portion of the new software engagement since 2018. The company’s other recent major public-sector contract wins include deals worth £5.5m and £12m to respectively provide local authorities in Hull and Essex with Microsoft technology, and a £90m agreement with the Home Office to address its “tail spend” of one-off or infrequent software purchases.

The firm, which is based near York, is owned by Bytes – another specialist software licensing reseller, which posted annual revenues of £1.4bn in its 2023 fiscal year.

Sam Trendall

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