Government must not ‘put the cart before the horse’ with new AI tender

The UK government’s £18 billion IT services tender, led by the Crown Commercial Service comes as part of a huge drive to adopt AI across the public sector – even as the technology is still to prove its organisational value. Mark Roberts, former director of commercial services at the Metropolitan Police and now UK public sector director at JAGGAER, offers insights into what could go wrong and how to ensure that government gets the fundamentals right before writing cheques for AI.

The UK government has announced an ambitious £18 billion IT services tender, led by the Crown Commercial Service (CCS). With the objective of providing IT services to public sector organisations, the tender, with a maximum projected value of £12 billion, was delayed due to the introduction of the UK Procurement Act, which came into force this February. The tender is part of a broader strategy to modernize public sector IT infrastructure, enhance digital services, and foster innovation.

The new tender could not have come at a more complex time with departments coming to terms with the demands of new regulations and emerging technologies pushing the boundaries of what is possible with innovative- and daunting- implications. In addition to these new challenges, UK government IT tendering has again been thrust into the spotlight with the publication of reports from the National Audit Office (NAO) and Public Accounts Committee which both highlight critical shortcomings in skills and preparedness. 

The NAO report highlights a number of issues starting with unrealistic expectations of suppliers: “Government’s expectations of what suppliers can contribute for what cost can be unrealistic from the outset... creating tensions between commercial guidelines and the requirements of digital transformation.”

In fact, as traditional procurement models were designed for commodities, they adapt with difficulty to complex digital transformation programmes. The report also suggests that tenders are issued before requirements are properly scoped, leading to these unrealistic timelines and to frequent programme resets. These in turn tend to rack up costs and delays for internal users and the taxpayer.

Supplier management

In addition to this, the report highlights a lack of strategic approach to supplier management, especially when it comes to dealing with the large suppliers that now dominate technology markets such as Meta and Google, for example. Cross department coordination opportunities that create scale and leverage are often missed, lowering overall negotiating power. By designating cross-departmental bodies and improving communication internally it may be possible to significantly cut costs, cross-pollinate and improve government bargaining power.

There is also a critical issue concerning adequate training of resources. In addition to a lack of alignment of responsibilities, skills, and resources, modern technologies require regular upskilling and training to ensure that investments are maximised. This lack of preparation extends end-to-end from managing contract design through to monitoring post-contract deliverables.

The report states that: “Commercial directors [say] the focus of government is mainly on procurement processes, and very limited resource or priority is given to managing suppliers post-contract award.”

This is of particular focus in the Public Accounts Committee report which highlights a significant gap in the availability of experienced employees in managing IT procurement contracts. These criticisms must be frustrating for all involved in the Contract Management Capability Programme, launched in 2018, which aims to provide training, development support and accreditation for contract managers and other contract staff.

The successful programme reports over ‘15,000 Foundation accreditations from central government and the wider public sector’ and ‘1,000 accreditations at Practitioner & Expert level’.

Despite this extensive training initiative, reports indicate a persistent shortage of skilled contract managers within government departments. These gaps must create the need for a comprehensive review of the government's approach to contract management to address areas such as:

• Retention Strategies: Developing clear career progression pathways and offering competitive compensation packages to retain skilled professionals.
• Attraction Initiatives: Implementing targeted recruitment campaigns to attract contract management professionals to the public sector.
• Resource Allocation: Ensuring that departments allocate sufficient resources to contract management functions, recognizing their critical role in project delivery.

Addressing these areas is essential to bridge the gap between training and staffing, ensuring that the government's procurement reforms translate into effective contract management and successful project outcomes.

Cart before horse

While the report calls for early engagement of digital specialists and technical users, it also highlights that better integration of departments, skills and roles is key to ensuring that IT tenders are conducted successfully. The shift from Cabinet Office oversight to the newly formed Department for Science, Innovation and Technology (DSIT), which now bears responsibility for delivering this high-stakes procurement in addition to cybersecurity marks an initial move towards more technical involvement in digital procurement tenders. 

Established in February 2023 as part of a government reorganisation to consolidate and elevate the UK’s focus on science, tech, and innovation, the DSIT’s core mission is to position the UK as a global science and technology superpower by 2030. In July 2024, DSIT also absorbed the Central Digital and Data Office (CDDO), Government Digital Service (GDS), and Incubator for AI (i.AI), giving DSIT a centralising role in digital transformation across public services.

At the same time, however, the transition to a new Procurement Act has altered the regulatory landscape for public sector procurement, introducing new obligations and processes that many stakeholders are still grappling to interpret and operationalise. With a new focus on social value, the regulation, which became effective on 24 February 2025, aims to make public sector procurement more flexible, transparent, and accessible. A critical change is the replacement of the "Most Economically Advantageous Tender" (MEAT) with the "Most Advantageous Tender" (MAT) principle, so that contracts may be awarded based on broader criteria such as quality, innovation, and social value rather than solely on cost.

The Act also introduces new transparency measures, requiring the publication of key performance indicators (KPIs) for contracts over £5 million and possible disbarment of underperforming suppliers. Whilst these reforms are designed to streamline procurement processes, open up public sector tendering to SMEs improving innovation and competition, and ensure better value for public spending, the sector is still adjusting to the new regulations with buyers and suppliers nervously navigating their way through these new requirements It will be interesting to review in 12 months’ time on how these ambitions are being met.  

All this change comes at a time when technology is developing at breakneck pace. Particularly, investment in AI and Agentic AI is top of mind for both the private and the public sector. The pressure to embrace AI and leverage its potential in a pioneering role is high but the rush to be “the first,” needs to be carefully balanced with real technical skills and awareness of the risks that implementing innovative solutions of this type can bring. 

With so many indicators suggesting that IT procurement processes need to be fine-tuned and modernized, while also adapting to the new regulation, rushing to write cheques for AI may turn out to be a classic case of putting the cart before the horse.