Digital Services Framework 2: will Whitehall buy into it second time around?

Profile picture for user ddpreez By Derek du Preez December 16, 2014
The first iteration of the framework wasn't as successful as some would have hoped, but the launch of a Digital Services Framework 2 tender raises questions for the year ahead.

The British government's Crown Commercial Service – a body that works closely with the Government Digital service to help government buyers be more commercially savvy – has this week announced the launch of the second iteration of the Digital Services Framework and has invited suppliers to tender.

Those of you following digital goings on in government may recall that the first Digital Services Framework is the somewhat less successful counterpart to the G-Cloud. Whilst the G-Cloud was launched to great fanfare and is held up as a new and innovative way for departments to buy cloud products, for one reason or another the Digital Services Framework struggled to catch on.

And although both frameworks are both aimed at helping government fulfil its Digital Agenda, the two have very different aims. The G-Cloud was set up as a tool to help departments buy commodity off-the-shelf hardware and software in the cloud, whilst the Digital Services Framework was launched to provide departments with a list of suppliers that could help them build customised digital products, in-house, in an agile way.

The G-Cloud was launched in February 2012 and has had almost £400 million of spend go through it, whilst the Digital Services Framework was launched in November 2013 and has had just £13.6 million go through it. Sales figures aren't the only indicator of success of course – many agree (both in Whitehall and on the supplier front) that the Digital Services Framework has struggled.

Diginomica investigated the problems behind the framework back in May and found that buyers were finding it too difficult, too complex and too lengthy a process to buy from the Digital Services Framework and as a result were looking elsewhere. This was because of additional requirements placed on the framework by the Crown Commercial Service, which had been deliberately left off of the G-Cloud in order to make it a simpler buying process.

Following freedom of information requests made by diginomica, head of the G-Cloud, Tony Singleton, wrote a blog outlining some of the main aims of the Digital Services Framework and admitted that there was room for improvement. He said:

Creating a large pool of quality suppliers with the right capabilities is part of the solution. We want to make sure there is a level playing field to select from that encourages both larger and smaller businesses to be involved and have a fair chance at winning work.

We also need to help buyers really understand what they are delivering and what they need to do differently to achieve this. It’s not just about educating them on new technologies, working methods and a process that is driven by their user needs, but about helping them to be able to go out and easily find suppliers as and when they need. This could either be for complete delivery teams or individual roles to join existing teams.

Hopefully most of the buying concerns have been eliminated given that the Digital Services Framework will now be rolled into the recently launched Digital Marketplace – which includes the G-Cloud and is essentially a one-stop-shop for all government buyers looking for cloud and digital services. The second iteration of the Digital Services Framework was reportedly delayed so that the Crown Commercial Service could ensure that it fitted the requirements of the Digital Marketplace.

But what other concerns are there and what else is required to make the Digital Services Framework a success second time around?

One of the other main concerns that I heard a number of times when asking questions about the Digital Services Framework was that it was hindered from the start because of the way that suppliers were selected and enlisted to the framework. Look at this comment at the bottom of one of my previous stories on the subject (which is a comment I've had repeated to me in one form or another from a number of sources):

Broadly speaking, the nature of how suppliers were selected for the framework has worked against GDS, and the government authorities it aimed to serve. The final decision for who is listed on the framework came down to little more than a reverse auction based on day rates by job role, with the cheapest 50 suppliers per role selected for the framework. It seemed that very little effort was made to understand any degree of delivery quality before selecting suppliers.

This has meant that the day rates that DSF-listed suppliers can charge for the services offered are substantially lower than those that are available on G-Cloud. The types of projects available through DSF have also been for very small teams or single roles to augment existing government in-house teams. Whilst on the surface it may seem that succeeding in lowering day rate costs represents a win for government procurement, in reality it means that the majority of the opportunities being contracted for through the framework have been commercially unattractive to suppliers, particularly SMEs.

Despite CCS and GDS purporting to be pushing the SME agenda, the DSF risks turning specialist technical services into nothing more than body-shopping, commodity outsourcing of people for the lowest price possible, a trend which will only continue to dissuade smaller suppliers from bidding for DSF projects. Furthermore, in speaking to government authorities being pushed towards using the DSF where before they were using G-Cloud, we have detected a large degree of uncertainty about the effectiveness of the framework, as they are very aware that trusted suppliers are not bidding for work for the reasons stated above.

A lengthy quote – but one that nicely sums up the concerns. Some suppliers believe that by going for the lowest bids, this turns the Digital Services Framework into a commodity list of services that won't in their nature ever be able to tackle the complexities of overturning legacy government services into agile digital ones. Some argue that instead of basing selection on cost, it should be based on what outcomes could be delivered versus price. Selection based on a quality ratio.

A contract notice for the second iteration of the framework outlines that a reverse auction will again be carried out for the selection of suppliers. I've got mixed feelings about this. On the one hand I think it's good that the Crown Commercial Service is driving down costs for buyers - and I've spoken to people inside the Government Digital Service that I trust who ensure me that this isn't the problem - but on the other hand, is it right to purely focus on costs? I'm not sure.

However, at a THINK Cloud Vendors conference in London this month, the government's commercial director of technology for the Crown Commercial Service, Sarah Hurrell, hinted that the lack of spending via the Digital Services Framework may be as a result of buyers using the 'Specialist Services (Lot 4)' in the G-Cloud framework to get the development, agile and consultancy services that they needed.

Over three quarters of G-Cloud spend is via Lot 4, which in itself has concerned many spectators, given that spending via Lot 4 will not be on cloud

British Government's Commercial Director, Sarah Hurrell
British Government's Commercial Director, Sarah Hurrell

products at all. However, Hurrell noted that abuse of Lot 4 may be on the decline and that CCS will be coming down on those using it inappropriately – but also that buyers will want to buy from Digital Services 2 because purchasing will be based on outcomes, not people needed per day, for example. Hurrell said:

When we look at spend, most of the spend that is declining is in Lot 4. Part of the agile approach is to spot trends and to see if there's been any abuse and there may have been some bending of the rules a little bit in terms of what that consultancy (Lot 4) was used for. That's something that we have worked very hard with GDS to fix.

I think you will see Lot 4 as a proportion going down, so that it is actually being used appropriately. We will have a new Digital Services Framework 2 out – I think that will be the preferred route for a lot of digital services transformation because that will be an outcome based buying of stuff. Most of our government users will either use G-Cloud (Lot 4) if they are specifically going to the cloud and will use it if they are buying other lots from that vendor, or they will use the Digital Services Framework.

As Hurrell sees it going forward – Lot 4 on G-Cloud will be used when a buyer needs help getting to the cloud and is purchasing cloud products from other Lots on the framework, whilst the Digital Services Framework will be used for outcome-based digital products.

My take

I really do have my fingers crossed for Digital Services 2 – I think it's a necessary tool for government and I think it's a good idea. However, it needs to be blended with the G-Cloud products via the Digital Marketplace and purchasing needs to be almost as easy as on the G-Cloud. By the very nature of outcome-based purchasing, things like costing won't be as simple, but if CCS and GDS don't make it easy, buyers will just continue to use Lot 4 on the G-Cloud.

As GDS has done with the G-Cloud, the Digital Services Framework needs a proper messaging and PR campaign behind it so that buyers know it exists. Workshops, case-studies, success stories, pain points – all of these things need to be publicly discussed so that everyone out there knows that Digital Services 2 exists and how best to approach it.