The importance suppliers place on winning large contracts with EU institutions cannot be underestimated. They are often as lucrative as any in the private sector, and come with the opportunity for suppliers to display their latest products in an internationally recognised shop window.
Speaking at a presentation to suppliers of the European Commission's latest computer architecture in December, senior Commission informatics official Wolfgang Barosch outlined the bonuses of doing business with EU institutions.
"Our projects are large. Even if we often start with a small pilot scheme the potential is there. We are a leading edge public institution, and because of that we are a well known reference point for your product," he said.
The Dutch PC maker Tulip Computers has been a consistent winner in the keenly contested EU contract stakes. Earlier in 1997, Tulip won a major three-year deal to supply 4,000 PCs to the European Parliament.
Tulip's Belgian managing director, Hugo Ketels, said: "The EU contracts are major for us in two ways. In terms of size, but also in prestige, and they are equally important."
Tulip tendered a price of Ecu1,015 maximum per unit, which was the best price/performance ratio. It was hoped that this would be the springboard for a successful bid for the most lucrative of the EU institution contracts, at the Commission.
But the success at the Parliament was not repeated, and the Commission choose to buy 10,000 Olivetti PCs over the next two years.
"In the past the Commission choose three vendors and would allow them to bid for new contracts every three months. This year only one vendor (Olivetti) was chosen," Ketels said.
"The reason we did not win the contract was because our prices at that time were not as competitive as usual, but as everyone knows these prices can change from month to month," he said.
The decision to place such a large order over an extended period with one vendor did not pass without controversy within the Commission itself.
Ketels would not make any direct criticism of the decision, but said he feels the tendering process should be more streamlined and made faster so the Commission can react to market conditions. The price of PCs can be as changeable as the price of a barrel of oil.
The delay between tendering a bid and delivering the goods can be a nervous six months for a supplier. The unavailability of vital component parts and exchange rate fluctuations can eat into a contract winner's margins and leave nothing but the prestige left.
"They should speed the process up. The Council of Ministers is the best. It only took two months from tender to decision last time, but the Commission takes far too long," he said.
The relative speed of the decision making process at the council is almost certainly down more to its smaller IT needs than any other reason. But there are also considerable differences in what the respective institutions are actually buying.
The stated long term goal for all EU institutions is a seamless, and paperless, single network. This obviously has numerous implications on the choices the institutions make in terms of hardware, software and support systems.
Efforts are being made to adopt a more common approach to IT strategy across the institutions, which include important decisions on common standards. But progress is slow as the institutions have different IT priorities, not to mention different IT resources.
"All the institutions are in the process of migrating from older software systems to newer ones. Unfortunately, they are all at different stages," said Tulip's Ketels.
A council IT manager confirmed that, though the council was following the Commission's move to the popular Windows NT system, the council is still at a very early stage in that process.
"Like the other institutions, we are in the process of migrating away from our Siemans B2000 mainframe to Windows NT version 4.0. We have started a pilot project in DGI (the environment and consumer protection directorate), but these things take time," he said.
The council may well have followed the Commission's lead on Windows NT, but a decision on which PC software package to go with will not be taken until early 1998. The Commission opted for Microsoft's Office 97 in February last year, but the council is keeping its options open, while looking closely at Wordperfect 8.
The council's budget priorities for 1998 are focused on extending the internal messaging network it has been piloting for over a year, and upgrading the institution's PCs.
"Our budget is slightly higher this year (1997) because we are moving to an electronic transmission system for the foreign and security policy directorate, and that is extremely expensive with very high specifications," the manager said.
The European Parliament is at a more advanced stage than the Council in the migration to a Windows NT standard, but also has different priorities.
"Our number one objective this year (1997) was to supply every Euro MP with a new Pentium 166 chip (166 megahertz) PC. When the members moved into their offices in the new parliament building [the Leopold building in Brussels] they found the new computers on their desks," a Parliament official said.
The new computers give every MEP full access to the Parliament's extensive internal network, as well as access to the Internet, he said.
The next goal is to set up an Extranet-like framework that will give MEPs secure access to the internal network from their constituencies. The target date for this is April 1998. Continued "little by little" progress in the migration to Windows NT is another 1998 priority, the official said.
As the Commission's Barosch said to the audience of prospective suppliers, the EC does see itself at the cutting edge of European IT. There is a feeling that the body, which does much to represent and promote European IT and research to the world, must practice what it preaches.
As one industry source said: "There is a tendency to have the very best computers, with all the available software. There is an element of overkill about it. But they say it is because they want the computers to last three years."
A source at the Parliament also suggested the Commission has a slightly inflated opinion of its own IT needs.
"This is not meant as a criticism of the Commission, but at the Parliament our view is that we are a parliament, not IBM. We do not feel that we need to be at the cutting edge of computer technology. We also have to consider our human resources and budget," he said.
There is little doubt that the Commission is the most advanced of the EU institutions in terms of the implementing the latest IT. A Commission IT specialist said that migration to Windows NT would be completed by August 1998, and that two of the Commission's cabinets [Commissioner's private offices] are already fully networked.
The purchase of 10,000 Olivetti PCs and an undisclosed number of Siemens laptop computers were the primary expenditures of the 1997 budget, although the Olivetti contract is set to run into 1998 as well.
As public institutions funded by EU taxpayers there is a clear imperative for the institutions to find the best value for money available. The Council is very focused on value, and takes a pragmatic approach to buying IT kit. A wide and transparent tender process enables the institution to shop around for bargains.
"A big PC contract will be decided in January, and it could be for as many as 1,000 PCs. Tulip won last time but I am sure the usual seven or eight companies will be pushing hard for the best price," a Council IT manager said.
At the Parliament: "We try to strike a balance between cost and quality. Of course cost is important, we are dealing with public money. But we also have an administrative consideration. We cannot put MEPs in a position where they cannot function," a Parliament source said.
One interesting sideline to the value for money debate is the surprising lack of joint purchasing. There is widespread evidence that the smaller EU bodies shop around for the best deal but the large institutions do this far less.
As one leading supplier said: "The small institutions tend to buy their IT kit under the provisions of the joint purchasing rules. They look at the Commission and Parliament contracts and choose the cheapest at that time. That way they get a lot more kit for their money."
It appears if you are looking for real value for money the best approach is to let someone else go through the expensive and time-consuming process of awarding contracts for you.
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