Around 80% of government departments are locked into outsourcing contracts, according to analysis of government contracts from price measurement firm ProBenchmark.

This means the government's push for savings in many cases is unrealistic, said ProBenchmark sales director Simon Scarrott. "These are 3rd and 4th generation contracts where professional procurement have run expensive multi-tender processes, which has taken the majority of the 'fat' out of the charges," he said.

The total cost of re-tendering in the current round of public sector cuts could be over £200 million, said the analysis.

In many cases the cost of this process to the government and to the vendors involved were collectively higher than the short to midterm savings, said Scarrott.

"If a deal is close to market price and fit for purpose then informed re-negotiations could bring a fresh, invigorated and effective deal in far less time (approximately 80% faster) and for a fraction of the cost (to all parties)", he said.

Source: http://www.computerweekly.com/Articles/2011/01/24/245058/Government-departments-locked-into-outsourcing-contracts.htm