£45m in savings targeted by government SAP deal

The government's procurement arm has signed a bulk software buying framework with SAP that could deliver savings of £45m for the public sector.

The three-year memorandum of understanding with the Office of Government Commerce trading arm, OGCbuying.solutions, came into effect on 1 January 2007 and will give all government departments and public sector organisations preferential pricing on SAP software and services.

As part of the agreement additional discounts will be triggered when the collective government spend on SAP software passes certain levels, as well as the option for public-sector bodies to enter into an enterprise licence deal with further discounts.

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With increased use of shared services in mind the government has also secured an agreement with SAP allowing certain public-sector organisations to transfer licences between government departments.

Derek Rothwell, director of procurement at OGCbuying.solutions, said the savings will be re-invested into front-line public services.

He said in a statement: "It means that we can supply software licences to the public sector at prices which offer real value for money and in a manner that supports the government's 'Transformational Government' agenda."

Whitehall has similar bulk purchasing agreements with the other major software vendors including IBM, Microsoft, Oracle and Sun, which contributed to the £412m annual savings achieved by OGCbuying.solutions last year.