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Simon Phipps

With a focus on open source and digital rights, Simon is a director of the UK's Open Rights Group and president of the Open Source Initiative. He is also managing director of UK consulting firm Meshed Insights Ltd.

Report Shows EU Procurement Lock-In Unabated

Despite fine words from politicians, vendor-biased procurement continues unabated across Europe, most likely because of long-term proprietary lock-in.

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A recently produced research report from OpenForum Europe discloses that 17% of all procurement tenders for ITC products by EU member states continue to reference specific vendors by name. Doing this is usually illegal under EU laws and is always discriminatory against alternative vendors.

These tenders represent very large expenditures of taxpayers money, amounting to around ‚¬425 billion in total. The potential savings that the report suggests could be made simply through greater transparency (and thereby increased competition) are incredible, amounting to as much as ‚¬30 billion. The laws and procedures to produce that transparency are already in place, so what’s the hold up?

The public authorities creating the tender documents are aware of the law, and wrap any vendor references in language intended to justify the discrimination, but the identities of the companies at the top of the list of most-named vendors -- led by Microsoft by a wide margin, but also including Oracle and IBM -- suggest the root cause is in fact proprietary lock-in.

This happens where earlier procurement decisions make the purchase of products and services from alternative vendors costly, either because interoperable products are hard to produce, or because the exit costs from existing solutions are too expensive, or because a vendor has been incumbent for so long that the staff dealing with them can no longer make informed independent decisions..

Lock-in is the key problem here. Once a government or department is locked into the use of a specific vendor’s products, they become hostage to the uncompetitive pricing strategies. Vendors whose software doesn’t create lock-in don’t tend to get mentioned by name in procurement notices, so we can take it as a general rule that where companies are named in procurement documentation, this is a sign of lock-in.

The report goes on to show that it’s findings are merely the tip of a potential iceberg of discriminatory procurement practices. It’s hard to see how the positive words of leading politicians about using open source solutions and open standards can be reconcled by this continued abuse of the procurement system. Surely it’s time for the European Commission to take the matter seriously?


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