OGP’s diligence and discipline set to cost taxpayers dearly
You know yourself what it’s like when the time comes around again for you to renew your car insurance, health insurance or fixed rate mortgage and you remember all those people on the radio, TV or social media telling you it always makes sense to “shop around” to get a better deal. In almost all cases, they argue, you should take your business elsewhere because companies always give better deals to new customers than their existing ones. Such is the price of loyalty.
It’s a hassle, of course, and many people just don’t have the time or inclination to make the switch. A lot of companies rely on the inertia of existing customers to prevent them from defecting to another supplier offering a better deal.
The good news for one company (Microsoft) is that one of its big customers (the Irish government) is firmly in the inertia camp. Back in September 2023, the Office of Government Procurement (OGP) established “a Multi Supplier Framework Agreement for the provision of Microsoft Solution Renewals and Associated Services”, awarding the contract, with a total value of €350 million (exVAT), to five suppliers, two from Ireland and three from the UK.
Last month, in the Dáil, Cian O’Callaghan, deputy leader of the Social Democrats, raised the progress of the proposed new framework, noting that the Minister had estimated it would be valued between €750 million and €1 billion. “Has his Department carried out a risk assessment in advance of publishing the tender for this new framework? I ask this at a time when other European countries are moving away from technological dependence on American companies,” he asked.
In his reply, Frankie Feighan, Minister for Public Expenditure, Infrastructure, Public Service Reform and Digitalisation, revealed that the framework for the renewal of Microsoft licences, solutions and associated services had been cancelled. “In relation to this tender, matters of concern were raised by an interested party,” he told O’Callaghan. “Having carefully considered those matters, the OGP determined it was prudent to cancel the competition and notify the market accordingly.”
Earlier in his reply, Feighan had claimed the OGP took “a diligent and disciplined approach to each and every framework”, insisting that in this instance it had “adhered to its standard, detailed and disciplined approach over an eight-month period, including engaging with the market through a structured, extensive and comprehensive pre-market consultation process, which seeks the market’s view with defining the scope, structure and content of the tender”.
He added that as part of the OGP’s governance process, “we are conducting a review of the relevant risks, issues, assumptions and dependencies before final approval to publish”. Interested parties were “entitled to query any element of the procurement competition and such queries can arise through a number of channels, including clarification requests, direct correspondence or through the tender advisory service”.
So let’s take a moment to think about this. According to Feighan, the OGP had adopted a diligent and disciplined approach over an eight-month period and yet, despite this, it was forced to cancel the competition and notify the market due to “matters of concern” raised by an interested party. This does raise the obvious question: just how diligent and disciplined was the OGP’s approach?
While it might be justifiable that “matters of concern” would be raised by external parties, is it really acceptable that those concerns should be significant enough to lead to the cancellation of the entire exercise?
Values
And here’s another thing: in reply to questions from Sinn Féin’s Mairéad Farrell, Public Expenditure Minister Jack Chambers recently confirmed that state bodies had spent €510 million through the framework so far. Am I the only one who wonders how the existing framework with a total procurement value of €350 million should have reached €510 million after less than three years? That doesn’t seem to reflect well on the OGP in terms of value for money.
Perhaps worst of all in terms of trying to gain better value for the country, the government refused to countenance alternatives to Microsoft as part of the process. As Feighan acknowledged: “The framework is only for the renewal of Microsoft licences. The prerequisite is that public service bodies using the framework must have already procured a Microsoft agreement appropriate to the licences being renewed.”
Hold on a minute. Just wait a second. Does that mean public service bodies are going to spend vastly more to renew their Microsoft licences than they did under the first framework? Sounds very odd to me. How many of us would be happy to spend two to three times more to renew our car or home insurance with our existing supplier?
O’Callaghan was keen for the government to explore alternatives, citing examples such as LibreOffice, Collabora Online, Open-Xchange, Nextcloud, Thunderbird and openDesk, which other European countries were adopting because they were better value for money and reduced their dependence on US technology.
“What I do not understand is why alternatives to Microsoft have not been at least explored as part of this process,” he commented, citing a number of examples, including the decision by the French police, the Gendarmerie nationale, to switch over 100,000 desktops to Linux, saving roughly €500 million over 15 years. O’Callaghan also cited the issue of digital sovereignty when he asked why alternatives were not being considered.
The issue of digital sovereignty has surged up the political agenda in Europe since President Trump began his second term. As The Register noted, concerns increased after the chief prosecutor of the International Criminal Court (ICC), Karim Khan was sanctioned by the US government and lost access to his work-based Microsoft services: “Microsoft claimed the ICC had removed his access to its services. The Dutch press later reported Microsoft had told the ICC it would have to end services to the whole organisation unless the court denied Khan access.”
Given O’Callaghan’s concerns, it’s probably worth remembering that the longer an organisation takes to consider migrating to alternative suppliers to Microsoft, the harder and more expensive it will be to make the switch. That’s just how it is. It’s just a pity that the rest of us could end up paying a high price for the government’s inertia and loyalty.
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