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Francis Maude, the Cabinet Office minister, has warned ICT suppliers that spending controls will be a "permanent way of life" and that poorly performing companies will find it difficult to win new government contracts.
Maude said the Treasury had saved £3.75bn in the year to 31 March 2011 by putting temporary controls on spending in areas such as advertising and marketing, ICT, property and recruitment.
Last week, the Cabinet Office estimated it will deduct £65m off its annual bill from Microsoft and £3m from SAP, however it spent £350m with those companies last fiscal year.
Maude will also reveal to suppliers that the Cabinet Office will monitor their output across the Crown as a whole, with formal information on individual firms used at the start and during the procurement process.
He admitted however that the Cabinet Office has some way to go yet before it can match the buying habits of the private sector.
"I want Whitehall procurement to become as sharp as the best businesses. I will tell companies that we won't tolerate poor performance and that to work with us you will have to offer the best value for money," said Maude.
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