MS & French Ministry of Defense : DIRISI Review

Please find bellow a summarized translation of the DIRISI Review.

State Commission on Public Procurement | ICT and Telecommunications
SERVICE : Inter army Direction of infrastructurenetworks and information systems of the Defense (DIRISI) | MARKET : Framework agreement with mono-contractor | DURATION : 4 years | SUBJECT : Operational maintenance of computers systems using Microsoft products with purchase option | May 6th 2008

Introduction

The DIRISI presents here a framework agreement draft regarding operational maintenance of computers systems using Microsoft products. It has been proposed to pass this agreement with Microsoft Corporation without advertising and without competing in accordance with article 35 II 8 of Public Procurement Code.

The framework agreement initially concerns the Ministry of Defence but other ministries might join later on. For this reason, specific aspects related to Defense issues will not be discussed.

BACKGROUND SITUATION

SUBJECT OF THE DRAFT AGREEMENT

Concerned supplies:

  • 4 years user rights on MS Office including Word, Excel, Power-point
  • Access to client part of MS servers
  • Additional products ; although computers shall be equipped with MICROSOFT WINDOWS, it appears the OS is not included into the products.
  • 'free use' of OFFICE for employees at home – a question might be, why would this be a need of the administration justifying derogation to Public Procurement Code. Appears to be offered for commercial reasons.
  • possibility to buy the softwares at the end of the 4 years – but not the users rights !

More delicate : article 1-2 allows to add new products not specified without amendment to the agreement. It is understood that the prices of the said products are not specified either.

If our interpretation is correct, we should wonders what is the real object of the contract, other than to accept the present and the future of the catalog MICROSOFT.
 
In addition, if we follow the service on the inevitability to provide to MICROSOFT new versions of software, that future will be unlimited and then makes inapplicable the contract period of 4 years.

The contract also includes various maintenance and assistance services – which could have been supplied by other companies but are here integrated into an exclusivity clause. This might be problematic as this means, MS could notably have access to offers from its concurrents and advise the administration on it.

ECONOMICAL ASPECTS AND SCOPE OF THE AGREEMENT

If we follow the reasoning, the cost to be considered should include also the markets that will be required to pass with Microsoft for future updates.

It is also clear that given the weight of MINDEF and the former MINEFI, this framework agreement will have impacts on other departments even if they do not join it.

Moreover, the debate between the use of proprietary software and the free software is somewhat obscured by the announcement of the so-called gratuity of some of the latter.

In fact, their main advantage lies in the cost of their ownership which only comes once. On the contrary, the costs of proprietary software are recurrent and result in particular from the "obligation" to acquire their successive versions as shown in this case and especially the considerable costs of interfacing applications they create.

So in reality it is a significant part of the overall software budget of the State which is involved in this case, even the materials budget.

Indeed, the administration is paying for its workstations the cost of WINDOWS, whose successive versions are linked by the successive versions of the software concerned by the present agreement.

This cost is certainly indirect and hidden today, but will appear one day when a a competition will be possible on non linked supplies on machines and systems.

DETERMINATION OF THE NEEDS AND CHOICE OF PROCEDURES

SALE BUNDLING AND INTEROPERABILITY

Although the concept of sale bundling does not exist in French public law, some provisions of Consummer law could be used in the process of abuse of dominant position taken by the European Court of Justice.

Sale bundling and interoperability shall be addressed together.

It is clear that the purchaser of Office 2007 will also acquire other softwares from the list, even if they have earlier versions of these programs as they are presumably incompatible with Office 2007. Interoperability between the various Microsoft products is thus also concerned - and especially here with OOXML.

The situation will evolve, and we can already expect that the acquisition of new versions will be presented as "indispensable" to consider without additional amendment, but at an unknown price.

THE PLACE OF THIS FRAMEWORK AGREEMENT
IN OPERATIONAL MAINTENANCE OF WORKSTATIONS

There might be inconsistency between the present agreement and the previous ongoing ones.

RIGHTS AND OBLIGATIONS OF THE ADMINISTRATION

In case of malfunction of a software, it is the administration's responsibility to proove it. Yet it can not actually do it as often sensitive information relating to software and necessary for the establishment of evidence are covered by patents and therfore not communicated.

Article 15-1 clearly states an abandonment of the idea that the supplies must meet with the needs of the public authority.

Regarding the statement of exclusivity, it refers to the substance and form to the "Microsoft group". Microsoft Ireland, which will be the beneficiary of Royalite corresponding licensing of this framework agreement and will carry some of its obligations is not even identified as sub-contractor.

CONCLUSIONS AND MAIN RECOMMANDATIONS

Workstations appears to be considered as the modern avatars of quills whereas they have actually become mandatory interface between administration officials and an increasing number applications from different origins and functions. In this context Interoperability issues have become crucial.

Beyond the strategic aspect of the issue, the consequences are difficult to apprehend as the object, price and duration of the contract are uncertain, and it is negotiated here without formal competition and especially without prior definition of the needs of the public body.

This file is just the tip of the iceberg of relations between the French government and Microsoft, that are now political and highly conflicting issues, marked by economic and financial power of MICROSOFT. It is then futile to try to resolve them by considerations of respect for the public procurement code.

There are clear doubts about the benefits that can be expected in the present draft framework agreement in consideration of the many abandoned principles relating to procurement it implies.

In this period of questioning of the usefulness of public expenses, the justification of proposed expenses appear weak and does not take into consideration the important and recurring costs incurred by this framework agreement, which is the opposite of central concerns of the RGPP.

In this context, the Rapporteur was struck by the asymmetry of expertise and information between the service and its supplier, on the eve of a difficult negotiation.

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