As many deals come up for renewal, organizations are looking at ways to refocus these transactions, cut the procurement costs and use the re-negotiation process to re-align the transaction, both in terms of the services and in their strategic sourcing relationships.

This may involve overcoming the so-called “incumbent advantage” and persuading new bidders to tender for the work.  One needs to balance the requirement to “level the playing field” between incumbent and non-incumbents, while also ensuring on-going continuity of service even during the re-tender and re-negotiation periods.  Weighed against this, organizations have to decide whether the time and costs involved in a new procurement exercise will bring benefits in terms of a better deal or re-focused service.

Public sector organizations – and some regulated private sector companies – may be under an obligation to re-tender their sourcing contracts, and therefore face the difficulty of project managing all of the above issues.

Lawyers from our Global Sourcing Group have advised clients on several private and public sector deal realignments in recent years, including:

• Dun & Bradstreet in the consolidation and outsourcing to IBM of data centres and application development/maintenance functions.
• Fujitsu in the restructuring of its technology services joint venture with AMD.
• Her Majesty’s Revenue & Customs in the UK tax authority’s next-generation outsourcing of its general technology systems to Capgemini in one of Europe’s largest IT outsourcing projects.
• National Policing Improvement Agency in its re-procurement of biometric ID and automated fingerprinting technology for the UK police.
• UBS Warburg in the realignment of its technology transaction with Perot.

Case Study

Her Majesty's Revenue & Customs

Lawyers in our sourcing group advised on one of Europe’s most high profile technology and re-procurement projects.  We assisted the Inland Revenue in the entire procurement process, including preparing its existing deals with EDS and Accenture for the procurement process, making a market so that other bidders would tender, setting up data rooms to enable bidders to have access to all the relevant information, managing the public sector procurement rules, liaising with other government departments, negotiating the transaction, evaluating bids, negotiating with the preferred bidders and assisting in the transition to the new supplier Capgemini.

This transaction needed strong project management and an ability to work with many different parties simultaneously, including multiple suppliers and sub-contractors, consultants and other government departments.