Strategic Suppliers 2018 in Review Want to receive more market updates on the most important suppliers to government? Tussell clients receive bespoke research on companies of interest - sign up for a free trial to find out more: Data as at: 05 February 2019 Strategic Suppliers are defined by the Cabinet O!ce as: "Those suppliers with contracts across a number of Departments whose revenue from Government according to Government data exceeds 100m per annum and/or who are deemed significant suppliers to Government in their sector." For more information, see this information from the Crown Commerical and the Cabinet O!ce: https://www.gov.uk/government/publications/strategic-suppliers This analysis includes any subsidiaries, a!lliates and joint ventures of the companies mentioned. A list of these entitites is available on request. This data is derived from public sector information (a) licensed for use by the UK Government under the Open Government Licence v3.0 and/or (b) from the EU Tenders Electronic Daily website licenced for re-use by the European Commission. This information remains the copyright of the UK Government and European Commission respectively.
Strategic Suppliers - Overview The Cabinet O!ce designates 30 companies as 'Strategic Suppliers' to Government. These firms are deemed so important to the delivery of essential public services that the Government's relationship with them is managed centrally by 'Crown Representatives'. 2018 was a turbulent year for some Strategic Suppliers. Starting with the collapse of Carillion in the beginning of the year and continuing with mounting stock market pressure on several others. This culminated with the re-capitalisation of on February 5th 2019. Despite this, these 30 firms won over 1,000 contracts with a total lifetime value of 4.2bn from the wider public sector in 2018. As the chart below shows, they won substantially more in the first half of the year than the second. Award Value 1.2B 1.4B 0.8B 0.8B Est. Framework Value 1.4B 1.8B 6.0B 1.3B Award Volume 328 250 235 221 Q1 Q2 Q3 Q4 alone won 164 public sector contracts in 2018, more than any other Strategic Supplier and equivalent to 17% of the total number of contracts awarded to this peer group., first listed as a Strategic Supplier in October 2018, won 76 contract awards last year, and, added in January 2019, won 69. EY is the only 'Big Four' firm not to be listed as a Strategic Supplier despite winning 45 contracts last year. Breakdown by Volume/Categories Consulting Defence IT Outsourcing & Construction Telecoms Engineering 164 ISS A/S 39 45 32 57 53 Engie 25 15 14 13 20 Fujitsu ATOS 13 12 20 DXC CGI Vodafone Group PLC Virgin Media 29 15 76 69 65 73 KBR is unmarked on this chart but recieved 0 awards; Motorola - 3 awards; Sopra Steria - 6; G4S - 15; Serco - 10 Page 2
Strategic Suppliers 2018 - Historical Comparison The value of public sector contracts won by the Strategic Suppliers* declined significantly in 2018 - a decrease of 2.4bn (36%) on 2017. The volume of contracts awarded declined by a lower rate of 16% on 2017. The proportion of total contract value awarded to the Strategic Suppliers in 2018 almost halved on 2017, from 10.3% to 5.8%. Value and volume of contract awards to Strategic Suppliers since 2017 2017 2018 6.6B 4.2B 1,0 1,209 0B 1B 2B 3B 4B 5B 6B 7B Award Value 0 500 1,000 Award Volume Proportion of total contract value awarded to the Strategic Suppliers since 2017 2017 10.3% 6.6B 2018 5.8% 4.2B Strategic Suppliers In 2018, two thirds of the Strategic Suppliers won a lower value of new contracts than in 2017. was the biggest winner, winning awards worth 616m more than in 2017. The biggest loser was, which saw a drop of 1.2bn in the value of new contracts won. Strategic Suppliers - change in 2018 2018 616M 67M ATOS 59M 58M 36M 16M Virgin Media 10M ISS A/S 8M 3M Sopra Steria - 4M - 5M - 6M CGI Group Vodafone Group PLC - 15M - 18M DXC Technology - 27M - 60M Serco - 61M - 62M - 61M - 95M Fujitsu Engie G4S - 1,209M - 4M - 600M - 241M - 360M - 121M - 1,500M - 1,000M - 500M 0M 500M 1,000M 1,500M Di#erence in Award Value * This comparison is of contract awards to the current set of Strategic Suppliers. This list has changed over the years, with some firms (e.g. Carillion) exiting the list, and some (e.g. ) only being added in 2018. This analysis excludes contracts awarded to joint ventures between multiple firms, and unless explicitly stated otherwise, includes only analysis of contract awards, not frameworks. Page 3
Awards & Frameworks 2018 By award value, was the top Strategic Supplier in 2018, winning 715m in awards, including a 514m Home O!ce contract for immigration enforcement services. 's revenue mix has changed so significantly in the last few years that today it could as easily be designated an IT supplier as an outsourcer in the classic sense. If it were, it would be the largest IT sector Strategic Supplier by a considerable margin. Award Awards and Frameworks Overview 2018 Framework Outsourcing & Construction 715M 656M 572M 296M 42 14 53 489M 912M 94 164 260M 1,235M 71 233M 880M 31 190M 1,4M 177 13 Serco 105M 266M Engie 75M 937M 33 25 ISS A/S 63M 513M 187 39 G4S 63M 271M IT ATOS 189M 172M 27 DXC Technology 153M 4M 12 130M 20 121M 2,587M 28 32 Fujitsu 92M 13 51M 13M 20 40M 0M 45 CGI Group 25M 19M Sopra Steria 4M 6 Telecoms 169M 57 Virgin Media 32M 3M 29 Vodafone Group PLC Motorola 2M 91M Defence 143M 47 Consulting 96M 49M 43 69 49M 145M 48 65 48M 47M 37 76 Engineering 23M 97M 82 73 KBR 5 0M 900M 1,800M 2,700M Award Value 0M 900M 1,800M 2,700M Est. Framework Value 0 100 200 Award & Framework Volume Page 4
Buyers In 2018 by far the highest proportion of contract value awarded to the Strategic Suppliers came from Central Government. This was driven less by number of awards than by the average size of individual contracts, which was twice as high in Central Government than in. Breakdown of Strategic Supplier 2018 Contract Award Value by Buyer Type Central Government 2,669M (62.9%) 499 733M (17.3%) 265 226M (5.3%) 82 618M (14.5%) 188 Central Government Of the overall decline of 2.4bn in the value of contracts awarded to the Strategic Suppliers in 2018, two thirds was driven by the 1.4bn drop in the contribution from. Central Government's award value was flat year on year at 2.7bn. Strategic Supplier Award Value by Contracting Authority Category since 2015 2017 Central Government 2.7B (31%) 2.1B (-14%) 0.2B (214%) 1.5B (59%) 2018 Central Government 2.7B (-2%) 0.7B (-66%) 0.2B (-4%) 0.6B (-60%) 0M 500M 1,000M 1,500M 2,000M 2,500M 3,000M Award Value Page 5
Top 10 Central Government Bodies by Value - 2018 Top Central Government Buyers (Award) - 2018 The Home O!ce was the Central Government department that purchased most from the Strategic Suppliers in 2018, largely driven by a 514m contract awarded to for immigration transport services. DWP awarded contracts to the largest number of Strategic Suppliers - 11 in total. Home O!ce Highways England DEFRA Department for Education Scottish Prison Ministry of Defence Cabinet O!ce/CCS Department for Work & Pensions Student Loans Company Ltd Ministry of Justice Her Majesty's Land Regist.. National Audit O!ce Northern Ireland Audit O!ce Ofsted Health & Safety Executive 375.9M 2.0M 514.2M 225.3M 10.1M 0.6M ATOS 135.0M 1.3M 37.4M DXC Technology 125.9M 18.0M 5.3M 5.0M 79.6M 10.3M 0.5M 13.2M 16.0M 21.1M 0.7M 66.7M 30.8M 11.2M 40.5M 0.9M Fujitsu 28.0M 51.0M 0.9M 1.5M 43.4M 18.1M 10.2M 4.4M 2.3M 0.5M 0.4M 30.2M 6.2M 3.8M 16.9M 1.6M 22.8M 23.0M G4S 21.0M CGI Group 18.7M Serco 0.6M 16.0M Virgin Media 14.3M 2.0M 15.6M 9.6M 1.0M 1.6M Vodafone Group PLC 0.4M Sopra Steria 2.5M 0.6M Grand Total 596.1M 402.9M 271.6M 239.3M 2.0M 184.9M 160.4M 97.5M 85.7M 72.6M 16.0M 2.0M Page 6
Highest Value Awards & Frameworks in 2018 Top 5 Highest Value Awards 2018 Contract Title Provision of In-Country and Overseas Escorting, operation and management of Short Term Holding Facilities and Holding Rooms and related services Contracting Authority Date Awarded Parent Home O!ce 30/04/2018 514M Area 10 Maintenance and Response Contract Highways England 05/10/2018 326M 01500 Scottish Court Custody and Prisoner Escort (SCCPES) Scottish Prison 28/03/2018 2M Test Operations s (TOpS) Department for Education 11/07/2018 225M Defra UnITy Programme Hosting and Application Support Department for Environment, Food & Rural A#airs 19/06/2018 ATOS 135M Top 5 Highest Value Frameworks 2018 Contract Title Contracting Authority Date Awarded Max. Supplier Award Count Distinct Strategic Suppliers Facilities Management Marketplace Crown Commercial 09/07/2018 47 11 12B Payment Solutions Crown Commercial 30/10/2018 9 1 10B YPO - 000833 Apprenticeships and Associated Training Yorkshire Purchasing Organisation 13/07/2018 75 2 8B Public Sector Travel and Venue Solutions Crown Commercial 27/02/2018 7 1 5B DWP Estates Contractor Framework Department for Work & Pensions 17/04/2018 17 3 4B Page 7