The UK has taken delivery of 14 F-35B Lightning II aircraft between 2012 and 2017. The total unit flyaway cost for these aircraft is $1920 million.

The Department for International Trade’s (DIT) core IT is provided by the Department for Business, Energy and Industrial Strategy (BEIS) under a Memorandum of Understanding (MOU).

BEIS is currently transforming their service which will continue to be provided to DIT.

DIT do not hold any IT contracts over £20m, however DIT seeks to apply the principles contained within the guidance proportionately to any IT contracts wherever possible.

The Department does not have any major IT contracts as defined in the guidance published in November 2017.

Officials in my Department follow best practise guidance and principles published by Cabinet Office where applicable to the Department to ensure consistent commercial activity and delivery of continually improved services.

The Ministry of Justice is aligned with the Government Commercial Function paper "Exiting Major IT Contracts: Guidance for Departments" having started a programme of disaggregation of its major IT supplier contracts with the award of it “FITS” Contracts between 2013 and 2015 - these contracts have already delivered substantial cost savings. The MoJ is reviewing its IT strategy and commercial approach with support from colleagues in the Cabinet Office, and is and planning for further disaggregation as the FITS Contracts expire.

The MoJ is also planning a programme of market engagement to gather market insight to guide its disaggregation approach - towards a vision of market-aligned, cloud-first services. The size and skill mix of our in-house management team is being reviewed to ensure it has the skills and resources ready to manage supplier and service transition effectively.

The Plan for Public Procurement through the Balanced Scorecard helps contracting parties to balance a range of criteria including provenance, seasonality, production standards, and cost. The Plan does not mandate any specific diets, but has the flexibility to allow contracting parties to cater for any type of diet.

The Foreign & Commonwealth Office (FCO) IT strategy and procurement approach is aligned with the Government Commercial Function paper "Exiting Major IT Contracts: Guidance for Departments". The FCO believes that disaggregating major IT supplier contracts can give better visibility and control, as well as deliver substantial cost savings. We are planning the disaggregation of our major expiring IT contracts and maintain regular contact with colleagues in the Cabinet Office to ensure our IT strategy is in step with wider Government policy.

The FCO has also carried out significant market insight activity to guide its disaggregation approach towards a vision of market-aligned, cloud-first services. The size and skill mix of our in-house management team is being reviewed to ensure it has the skills and resources ready to manage supplier and service transition effectively.

IT services are primarily delivered by our internal digital, data and technology division (DDAT), and the Department for Education (DfE) has not entered into any large outsourcing contracts with a single vendor arrangement that has spend of over £20 million per year. The DfE has used a multi-vendor approach combined with our in-house delivered IT services; as well as using a cloud-first principle for new procurements.

The Government Commercial Function published Exiting Major IT Contracts: Guidance for Departments in November 2017. The Department welcomes this guidance and has begun activities to ensure it is implemented.

The guidance recommends activities that complement existing policies and process for procurement and contract management in the following areas:

- Using market engagement: The Department regularly uses Market Engagement for strategically important contracts and this is embedded in the procurement process and procurement strategy template;

- Setting up disaggregation work: Departmental procurement policy requires procurement leads to consider dividing services into smaller contracts that could be awarded to different suppliers;

- Risk assessment: The Department has developed a contract management toolkit, including tools to assess and manage risk within its contracts. This includes the application of contingency strategies to mitigate the impact of such risks, if they occur;

- Developing a programme plan through the transition: A Contract Management toolkit has been developed to provide contract managers with tools to provide commercial assurance. The toolkit provides specific guidance on how to develop plans to ensure a smooth transition into Business as Usual service delivery (“steady state”);

- Identifying the skills and capabilities that will be needed in the future: The Department is developing a capability program and a range of learning tools to ensure that contract managers have the appropriate skills and knowledge to manage contracts effectively; and

- Any other work related to that guidance: The contents have been communicated to all commercial colleagues. The Department publishes a ‘Procurement News’ newsletter is for public sector colleagues within the Department and its arm’s length bodies (ALBs) who have an interest in procurement and commercial activities. The contents of the guidance were communicated to ALBs in the November Edition.

The Department continuously reviews and improves processes and guidance relating to procurement and contract management and will refer to this guidance in review activities planned for 2018.

The use of the Balanced Scorecard approach becomes mandatory for all central government departments and their agencies as existing contracts are renewed. This has now been enshrined in the updated Crown Commercial Service Facilities Management (FM) Framework which becomes effective early in 2018. The FM Framework is updated every 4 years.

The Government has a manifesto commitment to ensure that a third of goods and services procured by departments are supplied by Small and Medium Enterprises (SME). We are delivering this in respect of food and catering services through the Plan for Public Procurement: Food and Catering Services, published in 2014.

The Plan simplifies the public procurement process and opens up the market to more SMEs and local producers by providing a level playing field on which UK producers can compete. It provides tools, including the Balanced Scorecard (BSC), to help contracting parties to balance a range of criteria beneficial to the consumer, the environment, and to producers. These include embedding UK production standards, encouraging seasonality of fresh produce and calling for menus which celebrate the provenance of the food.

One of the BSC tools, the online market place, was launched on 11 October 2017 and will be used by businesses to showcase their products and services to procurers and to the rest of the supply chain.

The use of the Balanced Scorecard approach becomes mandatory for central government departments and their agencies as existing contracts are renewed.

Its use is also highly recommended for other public sector bodies, but cannot be mandated because responsibility for procurement decisions is delegated to local level.

I refer the hon. Member to the answer I gave on 24 November 2017 to Question 113627 to the hon. Member for West Dumbartonshire (Mr Docherty-Hughes).

For advertising purposes, HM Revenue and Customs has used the following agencies at various points over the last four years.

Adam & Eve DDB

Engine Group

Manning Gottlieb OMD

PHD Media

GfK

Carat

M4C

Havas

TMP Worldwide

All agencies were procured using the Crown Commercial Services frameworks applying fair and open competition procedures.

DWP is delivering a number of major IT contract exit programmes, and has followed the guidance detailed in the paper titles Large Expiring Contracts, Exit and Disaggregation: guidance for departments which precedes the paper entitled Exiting Major IT Contracts: Guidance for Departments, published in November 2017, which is currently being reviewed by DWP, prior to implementation.

DWP engages with Cabinet Office Complex Transactions Team from the outset, when exiting major IT contracts to utilise their knowledge and experience in defining, and implementing commercial strategies.

These commercial strategies include all the points in a) to f) above and some recent examples are as follows;

a) DWP utilises Crown Commercial Service Frameworks when sourcing disaggregated IT services. The market is engaged to establish supplier capacity, capability and alignment to DWPs key business objectives.

b) DWP has disaggregated a number of IT supply contracts in recent years, is currently in the process of disaggregating the complex services of the DWP Hosting contract and will exit and disaggregate its remaining Application Deployment & Desktop contracts at an appropriate time.

c) Risk Assessment forms part of DWPs Contract Management Framework toolset and is assessed for all major contracts on a regular basis.

d) Detailed plans are produced and managed by Programme Leads for the exiting of all major IT contracts.

e) In conjunction with the work DWP is completing to disaggregate its historic contracts, DWP is further developing its supplier and contract management capabilities to equip the Department for the future; enhancing its major IT project delivery and contract exit commercial skills.

f) DWP utilises multi-disciplinary teams including Digital Group, Finance, HR, Legal and Commercial. Good programme governance is also followed both within DWP and through close working with HM Treasury and Cabinet Office.

DWP will continue to follow the guiding principles and critical tasks set out in this latest publication.

Exit arrangements from Major IT Contracts is limited across the Department as IT services are predominantly delivered through in-house IT teams and supplemented by a small number of services through commercial partners. The DVLA exit from the PACT contract is well documented within the guidance and is an example of best practice for exiting large IT contracts. The experience gained from PACT exit is being shared across the Department and the recently implemented IT Category approach provides forum network for IT commercial professionals to share best.

Further work is being undertaken to collaborate across HMG with representation at the Digital Commercial forum and numerous CCS led initiatives.

The exception within the Department is DVSA, as there are current programmes of work to disaggregate the two existing large IT contracts. The work being carried out is covered explicitly below;

(a) using market engagement,

DVSA is well acquainted with the guiding principles within the GCF paper ‘Exiting Major IT Contracts: Guidance for Departments’ and routinely proactively engages with GDS and CO Commercial on exit from current major IT contracts which are with Atos and Capita. Exit from these contracts formed a core objective of 2015 DVSA Digital Services & Technology strategy. Individual projects and procurements have already been launched for replacement services with market sounding as a routine step in the procurement process e.g. the new End User Computing contract. Digital Partners have been selected through the G Cloud framework for development of replacement services with significant market interest shown when the procurement exercise was launched 12 months ago. DVSA ensures it understands User Needs through a Discovery phase e.g. in developing new digital MOT service which fully replaced the old MOT PFI contract. In addition, DVSA makes use of technology analysists to understand developments in the market.

(b) setting up disaggregation work,

Projects for replacement services to exit from the two existing major IT contracts are launched and have governance processes that requires scrutiny and approval of full business cases and have a SRO identified.

Agile methodology is used within these projects with MVP and service backlogs identified and routinely tracked through burn down charts for each sprint. Project benefits are tracked through internal governance and include enabling benefits the exit of existing contracts. E.g., the Commercial Vehicle Services (CVS) project will enable the exit of a majority of the DVSA IS2003 contract with Atos during its remaining term. All other activities to enable contract exit are managed on a Common Technology Service backlog.

(c) risk assessment,

DVSA has identified non exit within the remaining term of their two major IT contracts as a corporate risk and this is monitored by the DVSA Directing Board. Each project that facilitates contract exit is subject to normal project governance including monthly risk assessments. All contract end dates are routinely monitored through the DVSA Investment and Change Committee (ICC).

(d) developing a programme plan through the transition,

Planning for contract exit and introduction of replacement services are managed through project plans and transition is part of the deliverable for the projects. For exit of the two major IT contracts, an internal DVSA Oversight Board has been established to monitor risks to exit timescales. This updates the DVSA Investment and Change Committee which is chaired by a Director.

(e) identifying the skills and capabilities that will be needed in the future and

The need for futures skills and capabilities was recognised in the 2015 DVSA Digital Services & Technology strategy. DVSA has already successfully run an apprentice programme and a graduate programme for developing digital capability. In addition, recruitment campaigns are being run to fill permanent posts in the organisation consistent with the Digital, Data and Technology (DDAT) professional requirements. DVSA Digital Services and Technology Directorate has measured itself against Government Commercial Function operating standards.

(f) any other work related to that guidance.

Incumbent suppliers are being proactively managed by DVSA to secure their cooperation for exit and transition. Formal partnership meetings are held with senior executives and a collaborative approach has been established. This is reinforced through DVSA engagement with the relevant Crown Representatives and Strategic Relationship Mangers at Cabinet Office.

The Department for Business, Energy and Industrial Strategy is embarked upon an ambitious transformation programme (Cirrus) for its technology. Cirrus covers the transition of up to 5,500 users from a variety of former departmental (Department for Business, Innovation and Skills, and Department of Energy and Climate Change) systems to a common technology structure. Cirrus will see the design of a new operating model and the procurement and commissioning of replacement services. This involves exit from approximately 50 contracts and move to new arrangements with approximately 100 smaller contracts and some in-house provision by 31 May 2018.

The Government Commercial Function guidance paper arrived subsequent to the commencement of Cirrus planning, some of the principles contains within it are already well established in the Department.

a) Market engagement – supplier days are held routinely pre-procurement to help shape requirements, ensure they are attractive to the market and are deliverable;

b) Setting up disaggregation of work – lotting strategies are applied to disaggregate larger contracts and to open up opportunities to small businesses;

c) Risk assessment – the department continues to develop its understanding and management of commercial risks as measured against the Government Commercial Operating Standards. In the case of Cirrus these risks are mitigated through the early involvement of the GDS and Cabinet Office complex transactions team in the programme together with the formation of a commercial strategy working group;

d) Developing a programme plan through transition – The Cabinet Office complex transactions team has produced a plan for Cirrus which mapped the current contract landscape to the future state to support transition planning;

e) Identifying the skills and capabilities that will be needed in the future - The Cabinet Office complex transactions team also made recommendations on the contract management resources required to manage Cirrus contacts. Recruitment of this resource will commence in January;

f) Any other work related to that guidance – A new contract management strategy is currently being implemented in the department. The GCF guidance will be incorporated into this strategy for major IT contracts.

HM Treasury currently has no IT contracts that fall within the threshold(s) set out in the “Exiting Major IT Contracts: Guidance for Departments” paper.

HMRC has already implemented much of the guidance set out in the recent publication through the successful conclusion of the Columbus programme (which will reduce IT run costs by c£200m pa by 2020-21), which saw the disaggregation of legacy IT contracts by breaking them into a series of smaller, more flexible contracts with new and existing suppliers. HMRC has already started detailed work on the next phase which covers current IT contracts ending in June 2020.

The Home Office is in the process of disaggregating its major IT contracts, and its work in this area provided a major contribution to the Government Commercial Function paper cited. Through disaggregation, we will be able to break up large, costly and cumbersome contracts and move to a more dynamic environment in which we procure standardised service components from the market while focusing on building strategic internal capabilities, such as around strategy, and architecture, and system design and integration. This will allow us to better manage our risk and control costs, also allows us to better use the pre-existing commercial frameworks and hence shorten our time to market and subsequent mobilisation, and allows us to more easily access the SME market.

The contract for the delivery of Work Capability Assessments expires in February 2020. As part of the two year extension agreement, we have agreed higher standards of service and improved Key Performance Indicators.

During the remaining term of our current contract both the Department and our supplier will continue its drive for continuous contractual performance improvement and even higher standards. We will review our future requirements as part of our preparations for re-contracting.

The Crown Commercial Service emails all registered suppliers with details of enhancements to Contracts Finder in advance and when they are released. Contracts Finder is also featured in our programme of presentations to SMEs and industry bodies.

As Crown Marketplace progresses past the test phase a supplier engagement strategy (which includes communications and guidance) is being developed. Crown Marketplace continues to engage closely with the supplier market including SMEs.